IMPRESSIONS from a Cross-section

There is no doubt that the world and more specifically the Indian economic and political situation are far from being conducive to growth. The American, the Eurozone recessions adding to the domestic woes make our Indian export of garments very difficult to manage. Foreign buyers are very tough in price negotiations, and even more demanding in terms of high quality and timely deliveries which if not adhered to very strictly (which unfortunately seems to be genetically impossible to stick to by Indian manufacturer/exporters) will give them an even stronger chance to claim further unreasonable discounts for a product which once in their warehouse will cost them almost “peanuts”!!!

Also, the Eurozone crisis bringing along its heavy trimming of social expenditure to all those countries and the difficulties which each brand has to face in borrowing from Banks along with closing of factories resulted in many brands closing down or looking for greener pastures outside Europe. It has also resulted in higher unemployment especially in the Southern European countries where, now, jobs are scarce. However, this brought down people to adjust their salary demands. Now, in Southern Europe more and more employees are ready to work for a much smaller salary to the point where, in the Garment Industry of those countries it becomes profitable to manufacture garments again, hence re-starting, reviving their bankrupt Garment Industry. It means for India or any other low cost manufacturing countries a loss in production/export.

However, the development of the Indian domestic sector is an area where the manufacturers can lean on and even develop their business despite the multidirectional financial turmoil we are all facing. Also, because of the emergence of a stronger, bigger and growing middle class in India, there is a great potential for further development of the Indian domestic retail fashion market.

(Contd.)

The growth pattern for the sector in India is very volatile and I feel it will be directly linked to the  following three aspects:

1 -Availability of cheap money: If the interest rates are lower and loans easier to get, it will enhance the chances for the Indian Garment Sector to compete effectively with its nearby neighbors (Bangladesh, SriLanka, and surely soon from Burma) and from more eastern countries.

2 – Availability of labor: Labor availability in Southern India has become a headache for all exporters. This is due to the fact that people working in garment factories leave their jobs for better paid and lesser hard ones in the IT industry, Automobile industry, Electronic industry. This penury of employees around important cities of South India pushes the manufacturers and exporters to far away town where cheap labor is still easily available. Taxing imported garments from neighboring countries will help to boost the local Indian industry.

3 – Availability of a strong Indian internal consumption: This is possible only if the G.D.P. regains the healthy one it had 3-4 years ago. The Indian Government's assumption of what it is likely to be in the next few months is more of guesswork than certitude or maybe a political eye-wash while other financial institutions put the bar at a much lower level! Hence, unless the Indian Economy shows a well-meaning activity, then only can we predict a “strong internal consumption”.

(Contd.)

Making a brand a success in Indian atmosphere, to my personal opinion, is a combination of the factors. Prime most is Sufficient Capital, More Capital, much more Capital and so on. It may seem an exaggeration. May be yes, May be no!

Coupled with the above, a Streetwear Brand requires a very strong sense of the pulse of the young Indian Consumer (18 to 30) and the designers should be well tuned to this. Also, one must be very much aware of what is happening in the “Streets” of India or rather where the targeted customers gather, watch the Social Medias, listen and analyze the music trend, the Bollywood, Kolliwood or what ever “Wood” is attracting the customers one want to sell Streetwear to.

However, over and above all this one has to be daring; daring to the point where you will want to invest in a section of sharper fashion products line of your Streetwear/Casualwear collections and keep your other lines more “commercial”. Surely, your sharper fashion products line will also reflect on your more “commercial” collection.

India is a large country not only in geographical size, but also in population. It is very diverse in climate, culture, and income availability. These are the conditions that shape the buying and psyche for all Indians. For example: young men from Andhra like bright colors. However, those of big cities such as Bangalore or Chennai will like more subdued ones. Consumers of Delhi will go for more garments sharp fashion. Mumbai is more of a mix of all due to its size and origins of its very large population.