Consumer Discretionary

<p>Indian consumers and their apparel preferences are gradually changing, which in turn is altering the shape and size of the apparel business. Indian apparel which was deeply rooted to the immensity and richness of Indian culture is now aligning itself to more refined and globally on-trend fashion. Contemporary Indian apparel has more variations and segments today than ever before. From a limited wardrobe a decade back, it is now classified into formal, semi-formal, casual, active, sports, ethnic, seasonal, leisure, party wears, and more. This shift is due to the changing demographic and psychographic profile of the Indian consumers and is supported by the apparel market which is increasingly shifting away from tailor-made to readymade clothing and growing in size catalyzed by the entry of global retailers and brands.</p><p>The Indian consumer which comprises of the largest Gen Y population of the world with a median age of 27 years is also evolving in its shopping habits and buying behavior. The new Indian consumer prefers branded apparel over unbranded due to his/her inclination towards a better lifestyle and willingness to try out new on-trend fashion.</p><p>With India&rsquo;s economy expected to grow at almost 8% CAGR, over the next decade, the per capita income will also increase. Increasing wallet sizes will result in consumers with more money to spend and greater enthusiasm for fashion. The per capita expenditure on apparel is expected to reach INR 8,000 by 2025, rising from INR 3,100 in 2015. Therefore, the total Indian apparel consumption expenditure is expected to grow to INR 11.7 Lakh Crores (USD 180 Billion) by 2025 making India the most attractive apparel market in the world after China and the USA.</p><p>Further, not just the size of the market, but its construction will also change and women and kids markets will grow at an accelerated pace. These changes in the Indian economy are explicit and so is the impact of these changes on the apparel industry. For new as well as existing Textile and Apparel business establishments, this means a great deal. The aforementioned macroeconomic changes will drive apparel consumption trends, giving rise to significant business opportunities. We have identified seven key consumptions trends in India that will shape the future of the apparel industry and present significant opportunities for new as well as existing businesses.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-21+164944.png" /></p><p>&nbsp;</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-21+165108.png" /></p><p>&nbsp;</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-21+165142.png" /></p><p>NSSO rural consumption surveys have been showing a continued trend towards a more urban consumption pattern. Spending on clothing, durables, education, and consumer services (entertainment, transport, etc.) has grown faster than the average in the past decade. Apparel consumption in rural areas was predominantly need-based and skewed towards lower price points is hence changing and becoming aspiration-driven.</p><p>Together Urbanisation and Rurbanisation are adding new consumers many of whom are first time users of Ready-to-Wear clothing. Currently, very few retailers and brands serve this segment, but given the potential this will be one of the largest opportunities that will present itself for businesses that can dare to think &ldquo;LARGE SCALE&rdquo;. New business structres and supply chains will develop over time to address this market in more effective and commercially viable ways.</p><p><strong>Trend 1: Urbanisation and Rurbanisation Adding New Ready To Wear Consumers</strong></p><p>In India, people are shifting from rural to urban areas in search of jobs and better education at a continually increasing rate. In 2015, 33% of Indian population was living in urban areas, rising from 31% in 2010. By 2025, 37.5% of the Indian population is expected to be living in urban areas. Along with urbanization, cities are also expanding by immersing the villages near them, as 32% of urban population growth between 2001 and 2011 was because of the re-classification of towns and the expansion of urban areas. Due to urbanization, the size of the working population is increasing and the type of occupations they indulge in is changing. The working population has increased income with an attitudinal change to look better.</p><p>Furthermore, urban lifestyles and services are also spilling over to rural areas. A decade ago agriculture contributed to about half of rural GDP, but it is now only about one-fourth and decreasing further each year. The rural economy, which was dominated by agriculture has already diversified to manufacturing and service-based jobs over the last decade. Additionally, the government&rsquo;s rural employment schemes and expansion of agriculture to higher value-added farm activities are also helping rural population in transitioning up across different income levels. NSSO rural consumption surveys have been showing a continued trend towards a more urban consumption pattern. Spending on clothing, durables, education, and consumer services (entertainment, transport, etc.) has grown faster than the average in the past decade. Apparel consumption in rural areas was predominantly need-based and skewed towards lower price points is hence changing and becoming more aspiration-driven.</p><p>Together Urbanisation and Rurbanisation are adding new consumers many of whom are first-time users of Ready-to-Wear clothing. Currently, very few retailers and brands serve this segment, but given the potential, this will be one of the largest opportunities that will present itself for businesses that can dare to think &ldquo;LARGE SCALE&rdquo;. New business structure and supply chains will develop over time to address this market in more effective and commercially viable ways. for businesses that can dare to think &ldquo;LARGE SCALE&rdquo;. New business structures and supply chains will develop over time to address this market in more effective and commercially viable ways.</p><p><strong>Trend 2: New Middle Class and Its Soaring Aspirations</strong></p><p>Middle-class consumers spend relatively higher amounts than aspirers on discretionary apparel consumption. However, there are only very few apparel retailers and brands in India who have rightly understood middle-class consumers. The Indian middle-class consumers are value-conscious and at the same time want fashionable clothes too. They seek quality and design at the best price. Therefore, the Indian middle-class consumers are creating an opportunity that needs to be captured with &ldquo;value fashion&rdquo;. The consumers living in small district towns and their nearby rural areas are also currently untapped by apparel retailers and brands and present a potential that is yet to be realized. Though a major share of these consumers is &ldquo;Aspirers&rdquo;, more and more of them are becoming users of ready-made clothing and hence present a big opportunity for building brands offering affordable clothing. With the value-for-money proposition and first-mover advantage, such brands will stand a fair chance to convert nonbrand consumers to brand buying consumers. The consumers living in small district towns and their nearby rural areas are also currently untapped by apparel retailers and brands and present a potential that is yet to be realized.</p><p>Though a major share of these consumers are &ldquo;Aspirers&rdquo;, more and more of them are becoming users of ready-made clothing and hence present a big opportunity for building brands offering affordable clothing. With the value-for-money proposition and first-mover advantage, such brands will stand a fair chance to convert nonbrand consumers to brand buying consumers.</p><p>Urbanization and the overall increasing income of the middle class and their soaring aspirations are changing the dynamics of the apparel market. By 2025, the middle-class consumers, which will form 48.5%of total targetable customer base, will contribute to about 55-60% share of the total apparel market size. The top-tier cities will continue to remain dominant locations in terms of the apparel market because of the presence of both middle class and affluent consumers. However, two-third of this middle class will dwell in the middle tiers and smaller cities as well as large district towns which are and will continue emerging as increasingly attractive apparel markets.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-21+170532.png" /></p><p><strong>Trend 3: Smart Women Smart Kids Ready To Wear Consumers</strong></p><p>India is one of the few countries where menswear has traditionally been a bigger market than women&rsquo;s wear, but this is going to change very soon. The women&rsquo;s wear market in urban areas is undergoing throes of change. India is one of the few countries where menswear has traditionally been a bigger market than women's wear, but this is going to change very soon. The women&rsquo;s wear market in urban areas is undergoing throes of change.</p><p>The role of women in Indian families is changing and with women contributing more to household income, their influence in family decision making is also increasing. Even women who do not work are also stepping beyond their homes like working women and taking up male roles and responsibilities, as family work gets redefined, driven by pressures of urban living. Further, while this may be more visible in metros and larger towns, the change is also happening across smaller towns and rural areas, where the girl child is slowly being encouraged to do more and achieve higher. This whole transition in the lives of the new age women has increased their awareness about themselves and how they look, which in turn is driving growth in the women&rsquo;s apparel market.</p><p>On the semi-urban and small-town side, this means more spending on apparel, increasing adoption of ready-to-wear rather than home-stitched apparel, increasing acceptance of western casuals (denim, T-Shirts/ Tops, etc.).</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-21+170952.png" /></p><p>&nbsp;</p><p>On the urban side, with the rapid expansion of professional sectors in India where working conditions are more women-friendly and hiring policy is inclined towards greater gender diversity, the number of working women is constantly increasing. The need of dressing smart and willingness to look better is driving urban women to increasingly accept western wear, leading to the women's western wear market showing more traction and wider acceptance in urban areas.</p><p>Recognizing this changing scenario in urban areas, women's western wear is also evolving beyond denim and western casuals with innovative fabrics and stylized silhouettes. To capture the growing transition towards western wear, an increasing number of retailers and brands are introducing fashionably smart clothes for women, including office wear and party wear. Even the Indian ethnic wear is getting a twist with silhouettes becoming more westernized and moving towards &ldquo;contemporary clothing.&rdquo; This growth of domestic brands like W, Global Desi, AND and international brands like Zara is witness to this trend.</p><p>Furthermore, the way urban women perceive innerwear has also transformed. They no longer shop innerwear as a need-based product or functional purchase. For urban women, contemporary innerwear is more associated with their aspirations and desires rather than functionality or need. Therefore, women's innerwear presents another big opportunity for investment and growth.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-22+124458.png" /></p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-22+124527.png" /></p><p>&nbsp;</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-22+124601.png" /></p><p>&nbsp;</p><p>&nbsp;</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-22+124615.png" /></p><p>In the past, urban consumers never considered &ldquo;brand name&rdquo; as a substantial parameter for buying kids' apparel and were highly price sensitive. This has however changed and urban consumers&rsquo; willingness to pay for kids&rsquo; apparel has increased with their higher purchasing power. Urban women are more status-conscious and carefully contemplate on what their kids should be wearing. Also, smarter mothers are grooming smarter kids who have a lot of say in purchase decisions. Kids are more aware of brands as they are exposed to media and surroundings more than ever. As a result, though quality remains paramount and price sensitivity high, the acceptability of brands for kids wear is increasing among urban consumers.</p><p>The absence of large number of established brands in the kids wear market in comparison to men&rsquo;s wear and women&rsquo;s wear market is a big opportunity. The kid's wear market in urban India is expected to reach INR 1,57,000 Crores by 2025. However, this opportunity created by the urban consumer only demands to be catered with the sustained combination of good quality, latest fashion, and affordability.</p><p><strong>Trend 4: Functionality and Fashion Expanding Wardrobes</strong></p><p>The Indian urban consumer&rsquo;s way of living has dramatically changed. With this, the occasions and reasons prompting apparel consumption have also increased. Today, urban consumers are buying apparel that serves a specific occasion/usage e.g. they prefer plain shirts for meetings, checked or striped shirts for casual interactions, and shirts with funky patterns for night parties. Similarly, specific reasons can also trigger apparel consumption. There exist urban consumers who buy apparel because of functional/performance benefits and hence brands introduced clothing lines on the concept of shape retention, anti-stain, anti-odor, anti-perspiration, quick-dry, etc.</p><p>Another set of consumers has moved beyond functional to higher needs and prefers sustainable clothing that is good for the skin, clothing made under fair trade certifications, etc. This prompted many apparel retailers and brands to launch the organic clothing line made of organic cotton, bamboo fabrics, and natural dyes, etc.</p><p>All the aforementioned developments are driving apparel retailers and brands to look beyond the predictable needs of urban consumers. For driving the sales growth, brands and retailers are on one side, creating and serving the new occasions in the lives of consumers, and on the other are innovating performance features that will prompt apparel consumption. Some examples of traditional apparel advancing to the next level are as follows:</p><p>&nbsp;</p><ul><li><em> Biker Denim</em>: Denim, specially crafted for bikers, offer excellent full-length abrasion resistance and feature integrated armor pockets at both the knees and hips, unlike normal commuter denim. Further, they have differential stretch and sweat absorption features across various zones, to offer unmatched comfort to the biker.</li><li><em> Ably Apparel</em>: An eco-friendly brand that introduced apparel made up of 100% cotton activated with Filium&trade;, a technology that makes natural fabrics repel liquids, stains and odors. This means if water is poured or coffee is spilled on an Ably shirt, it just beads up and rolls off like it&rsquo;s on glass. Ably clothing also does not absorb sweat. The perspiration just evaporates from breathable fabric, keeping the garment fresh for a much longer time.</li><li><em>BioCouture Garments</em>: A London-based design consultancy, BioCouture created a range of jackets made from bio-materials produced by bacteria in a vat of liquid to produce bacterial cellulose - a material that has similar properties to leather. These materials are not just biodegradable but compostable. Presently, living organisms are used to make the materials but then the organism is killed and material just exists like any other. In the future, such clothing materials could be living organisms that could work symbiotically with the human body to nourish it and even monitor it for signs of disease.</li></ul><p>While functionality continues to increase consumption, the urban consumers' desire to be more fashionable overrides all other factors boosting sales for apparel retailers and brands. While considering apparel as a functional purchase, urban consumers also see apparel as a form of self-expression. They consider it as a reflection of their personality and status. In an attempt to remain up to date with the latest fashion trends, urban consumers get influenced by their social circles, Instagram feeds, and Facebook updates. Therefore, more and more urban consumers are buying apparel based on the latest fashion trends and styles and aspiration-based purchases rule. Consumers are allured by brands and retailers that rapidly translate catwalk fashion trends to their stores.</p><p>In 2015, Zara became the fastest apparel brand in India to cross the USD 100 million sales mark within five years since its launch in 2010. Zara created this benchmark by leveraging the insatiable appetite of urban consumers for brands selling fashion. In order to tap the potential that the Indian market possesses, prominent international brands like H&amp;M, Gap, and Aeropostale also entered India in 2015. While the Swedish brand H&amp;M attracted a record 98,000 people to its store on its opening day, the American brand Aeropostale witnessed the footfall of 35,000 people within 10 days of opening its first store. Moreover, the American brand Gap has opened 3 more stores in India since opening its first store in May 2015. All this, consolidates the idea of fashion clothing as a form of self-expression among urban consumers.</p><p>Despite having phenomenal sales growth, the overall market sales of all these international fashion brands hardly accounts for even 1-2% of total market sales. The Indian apparel market offers a much bigger opportunity for the emergence of new as well as existing Indian fashion brands that stand a fair chance to benefit from their better understanding of local fashion preferences and market dynamics. Hence, it is in this space that Indian brands and retailers are launching new brands like &ldquo;Cover Story&rdquo;.</p><p>&nbsp;</p><p>Trend 5: Delinking Price, Range, and Fashion Quotient</p><p>As fashion consciousness and adoption becomes higher and more penetrated across socio-economic strata as well as different types of cities, fashion is being democratized and does not remain the prerogative of a select few, like in the more developed markets. The trend is beginning to surface as catalyst retailers and brands like MAX Fashions, H&amp;M etc. to name a few, obfuscates the difference between price segments without compromising on trendiness and fashion quotient while maintaining quality. Even in terms of range and options, these retailers are creating new benchmarks. An average H&amp;M or a Max Store merchandises far more SKUs in a given period than similar-sized stores a few years back. Such brands are well-positioned in the Indian market as their pricing and merchandising strategy have successfully plugged the relative gap between the aspirations and incomes of Indian consumers and their remarkable success is proof enough.</p><p>Furthermore, with time, there will be an emergence of a new range of brands in the Indian market like it has been in international markets. Such brands will integrate fashion with aspects like convenience, disability, affordability, innovation, sustainability, etc. across many different facets to improve perceived value and usability at the same time.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Screenshot+2021-12-22+132214.png" /></p><p><strong>Trend 6: Return of Custom-Fit Clothing Quotient</strong></p><p>The Menswear market in India transitioned from tailor-made to ready-made clothing due to the popularity of ready-made clothing among young and working Indian men. But now, the trend of custom-fit clothing in India is reviving as more and more men who have been buying premium or luxury readymade clothing brands want to wear a shirt or a trouser that fits them perfectly.</p><p>Custom-fit clothing is a term that is used to represent any garment that has been transformed to fit a customer on the basis of his/her measurements and styles. Custom-Fit Clothing is of two types - Made-to-Measure and Bespoke Tailoring. In case of made-to-measure, standard patterns of clothing are fitted to the measurements of the customers. Although, made to measure clothing fits better than readymade clothing but it is still not made 100% according to the customer&rsquo;s measurements. On the other hand, bespoke tailoring in terms of fit is incomparable. In this, customers have to choose from different options of body types, fabrics, cuffs, collars, pockets, and buttons along with usual size measurements. After the finalization of all the details, a pattern is made for the garment on the basis of which it is designed and constructed. Therefore, bespoke tailoring offers higher exclusivity than made to measure.</p><p>In India, the premium brands like Raymond and Louis Philippe as well as luxury brands like Armani, Versace, Zegna, Cadini and Canali are offering made-to-measure services. Moreover, the premium brands like Van Heusen&rsquo;s MY FIT and Creyate by Arvind Group have also introduced bespoke tailoring in an attempt to capture the growing trend of custom-fit clothing among Indian men.</p><p>The menswear ready-to-stitch market in India is expected to grow to INR 46,500 Crores by 2020. Although, the share of ready-to-stitch in men&rsquo;s wear market is decreasing because more and more customers of local tailors who largely exist in small towns and villages are shifting towards readymade clothing. But there is high growth potential for premium and luxury brands offering custom fit clothing as this gives Indian men personalised clothes with perfect fit combine with a new experience, freshness and exclusivity that contributes positively to sales and consumer acceptance of brands.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/bakar+12.png" /></p><p><em>&nbsp;</em></p><p><strong>Trend 7: Integration of Fashion and Technology</strong></p><p>The increasing access to digital devices and the internet is enabling the masses to have an online shopping experience irrespective of whether they are living in urban or rural areas. Online shopping gives access to wider range of brands, the convenience of shopping in indoor comforts and options to compare prices, products and read reviews. Moreover, enhanced customer services, social media engagements and concepts such as sales on weekends, holidays and festivals are helping online retailers attract a lot of new customers and also build loyalty among existing customers. Online shopping today gives rich, immersive and personalised shopping experience to a customer and is a major reason driving growth.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p><p>&nbsp;</p><p>While the online apparel sales are growing, the opportunity to build digitally driven fashion brands is also emerging. The success of digitally-driven fashion brands will be driven by vast young population with access to technology and desire to be fashionable. These brands will have to master the &ldquo;content&rdquo; as it is the only thing that runs the internet. These brands will utilise the power of curated content to build their brand identity. They will present new fashion ideas and inspirations to people and effectively leverage proliferating social media as a marketing and distribution channel. Through collaboration with existing e-commerce websites, a digitally-driven&nbsp;fashion brand will be able to access a large customer base at very low costs.</p><p>&nbsp;</p><p>&nbsp;Moreover, the interaction of customers with the database of the brand&rsquo;s product range will reveal which products have the highest potential of selling. This customer interaction data will be used to address all the inventory-related issues. Therefore, profitable business strategies developed through the smart use of data mining techniques and sharp strategic analysis of data gathered through these techniques will effectively fuel the success of digitally-driven fashion brands.</p><p>This success can be further utilized for sales channel integration as well as expansion. We believe that business entities looking at entry into the domestic apparel market, or growth, could leverage one or more of the above trends to start and scale up their business. The market growth and continuous shift towards brands will support new ventures, given the strength of the product and a clear growth strategy based on real consumer insights.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/bakar+13+.png" /></p>