Apparel Online India Magazine February 1st Issue 2019 | Page 20

AO SURVEY TO EXHIBIT TO VISIT Ila Saxena +91 9810238467 [email protected] Shruti Arora +91 88000 10134 [email protected] AO SME EXPORTERS’ SURVEY GROUND REALITIES OF SME EXPORTERS STILL REMAINS THE SAME… EFFORT FOR S U R V I VA L C O N T I N U E S The apparel industry is perhaps going through one of its most difficult phases and while some openly admit that they are struggling, many others prefer to downplay the challenges. Last year, the currency devaluation advantage was one of the biggest factors that supported business, but such temporary boosts are not solutions for long-term sustainable growth. So, what are the ground realities today and how do companies propose to survive in a highly competitive environment, where every cent counts? The Apparel Online team conducted a survey in this regard to understand what even facts and figures cannot unveil. I t is often heard that in the long run, either top players or very small players will survive as multidirectional challenges are growing day by day, and the big guys have the resources and staying power to overcome the same, while very small ones are flexible and have less overheads to maintain. Difficulties are comparatively more for the SMEs who we generally club as the middle-level exporters, to grow or even to survive. Though recently Government has come up with few schemes which are specific to SME exporters, they are not enough and there are still some tough days ahead for such players. Out of the total apparel exporters that participated in AO survey, 26 per cent of the respondents had a turnover of below Rs. 10 crore, while the majority, 58 per cent were in the bracket of Rs. 10 crore to Rs. 30 crore and 16 per cent had an annual business between Rs. 30 to Rs. 60 crore. Significantly, 90 per cent of responses were shared by the owners while only 10 per cent were the views of senior professionals. The survey was limited mainly to the North India-based exporters covering Delhi-NCR, Jaipur and few other hubs of the region. Some of the findings of the survey conducted on the SME exporters were on expected lines. Business has definitely stagnated for most and ‘uncertainty and disappointment’ is clearly reflected in the responses with regard to the expectations in the next 12 months. Few of the major findings are highlighted below, with AO analysis. The percentage of exporters hoping for 10 to 15 per cent growth is 16 per cent and the same number of exporters believe that it looks hard to maintain even last year’s (2018) level of performance. Last year was not good for the majority Wish from the Government It is no surprise that a majority of the exporters were not happy with last year’s performance. 42 per cent (maximum) exporters informed that in the last year (2018), they had the same level of business as before while business for 16 per cent dipped even below the level of 2017. However, 21 per cent did notice growth of more than 15 per cent and 11 per cent exporters grew between 10-15 per cent. Out of the total respondents, 10 per cent players achieved growth below 10 per cent. Expectations for next 12 months similar to those in 2018 Predictions or expectations for the next 12 months are almost similar to the performance registered last year as 42 per cent exporters are expecting the same level growth. 26 per cent are quite positive as they have expectations of more than 15 per cent growth. 20 Apparel Online India | FEBRUARY 1-15, 2019 | www.apparelresources.com Though over the last two years, all kinds of support/subsidies from Government seem to have been wiped out, but still the majority of the SME exporters are hoping and wishing for an increase in duty drawback rates or introduction of any other incentive. Apparel Online asked four options to the respondent to prioritise as their wish from the Government. These options were labour law reforms, increase in duty drawback or any incentives like FTA with US/EU and ensuring stable yarn/ fabric price. The response on prioritising is again on the expected lines. 11 per cent of the exporters were in the favour of FTA with US/EU as top priority, while for 5 per cent, the first wish was to ensure stable yarn/fabric price. 10 per cent gave equal importance to both these points. 26 per cent insisted that the Government should increase duty drawback or introduce any incentives. 48 per cent respondents stated that all these need to be done for the survival of apparel trade as more or less these are equally important.