Apparel Online India Magazine March 1st Issue 2019 | Page 34

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Exhibit 6: Apparel Market Size in India (in US $ billion)
Growth of apparel & accessories in retail
USD 36.7 Bn
(79.2%) USD 62.6 Bn
(74.7%) USD 83.3 Bn
(67.2%)
20.8% 27.1% 35.1%
2013
The apparel
and accessories
segment size
in FY 2018 is
estimated to be
US $ 63 billion
and is expected
to grow at a
CAGR of 10
per cent to
reach US $ 83
billion by FY
2021.
In the coming
decade,
growth of
apparel retail
will continue
to rest on the
disproportionate
growth of
value fashion
segment in
India.
Allowing
foreign capital
investment in
Indian retail has
always been
a debatable
topic. The FDI
muddle in
Indian retailing
needs to be
viewed in three
groups.
2018 (E)
2021 (P)
Share of Apparel in Organized Retail
Apparel & Accessories
1 US $= Rs. 65
Source: Industry sources, Technopak Body of Knowledge
While the CAGR of total Apparel and Accessories
category between 2018 and 2021 is expected to be ~10
per cent, CAGR of organised apparel retail is expected
to grow at ~20 per cent during the same period. The
share of e-tail in apparel and lifestyle retail was 6.5 per
cent in FY 2018. Apparel and lifestyle includes apparel,
footwear, accessories of all types that were sold through
e-commerce channel. It is expected that by FY 2021,
e-tail’s share in Apparel & Lifestyle’s overall retailing
share will reach ~12-18 per cent. Organised retail is
poised to address these demand drivers through enhanced
offering in value segment, retail led brands expanding
both offline and online footprints and growth of ethnic
fashion for dailywear.
total apparel is a unique feature of apparel market in
India. In any other major apparel market (China, Japan,
South East Asia etc.), nearly all the market is made up
of westernwear categories. Indian fashion here should
be interpreted as the influence of Indian and Ethnic
ethos on apparel’s cut, shape, silhouette and nature of
raw material used (not restricted to powerloom but also
extending to handlooms fabrics).
PRESENCE OF KEY FORMATS IN MODERN
RETAIL LANDSCAPE FOR APPAREL &
ACCESSORIES
The key formats marking apparel and accessories’
organised play:
Exhibit 8: Key formats in organised apparel & accessories play
Format Exclusive
Brand
Outlets Private Label
Led LFS Multi-Brand
led LFS E-Tailing
Average Store
Size 1,500-2,500
sq. ft. 10,000-15,000
sq. ft. 20,000-30,000
sq. ft. -
Key
Differentiating
Factors One-stop
destination
for latest and
unique fashion
trends Emphasis
on smart
efficiencies
with shopping
experience Focus on
fast moving
product
categories Focus on
fast moving
product
categories
Newest
assortment
of products
within any
product
category Wide selection
of private label
offerings at
affordable
price Stocks only
popular styles
from branded
play Emphasis
on smart
efficiencies
Exhibit 7: Share of branded apparel and organised apparel retail as a
percentage of apparel market
Size of Total Apparel in USD Bn
36.7
62.6
20.8%
83.3
48.0%
37.0%
25.0%
Emphasis
on customer
experience
35.1%
27.1%
Key Players
2013
2018 (E)
2021 (P)
Note: Branded apparel signify registered trademarks that are regularly patronised by
customers and that are sold through both organised retail and trade channels. Organised
retail signifies formal retail channels of Exclusive Brand Outlets (EBOs), Large Format Stores
(LFS), e-commerce etc. Apparel retailed through these organised retail point of sales are
necessarily branded. Therefore, organised share is less than the share of branded apparel
in total share.
Source: Secondary Research, Technopak Analysis; 1 US $ = Rs. 65
In the last ten years, organised retail has not only
captured the new incremental demand but has also
succeeded in shifting the demand away from unorganised
retail in its favour. Apart from the demographics and
urbanisation as reasons that aided the growth of
organised retail, the rapid evolution of organised retailing
models for apparel is a key reason that has enabled
this growth.
In the overall apparel market, men’s apparel constituted
more than 41 per cent and women’s apparel share was
~38 per cent of this market (the balance is contributed
by Kids Apparel). Out of the total apparel market,
Indianwear accounts for approximately 32 per cent
and the balance 68 per cent of the market is made up
of westernwear. The high share of Indianwear in the
34 Apparel Online India | MARCH 1-15, 2019 | www.apparelresources.com
Biba, W,
Global Desi,
Fabindia,
Hidesign etc.
Stocks only
the popular
styles
FBB, Max
Fashion,
Westside,
Reliance
Trends etc.
Emphasis
on upselling
private label
Central,
Lifestyle,
Shoppers
Stop etc.
Discounted
offerings
Wide range
of branded
apparel and
private labels
Myntra+,
Amazon etc.
Source: Technopak Analysis
INITIATIVES AND TRENDS THAT WILL IMPACT
GROWTH FOR ORGANISED RETAIL IN APPAREL
AND ACCESSORIES SEGMENT
1. Goods and Services Tax (GST)
The launch of GST in 2017 has been able to remove the
indirect tax regime, replacing a large number of indirect
taxes and duties levied by centre and state with three
types of GST (Central, State and integrated GST) as
well as basic customs duty for imports. Implementation
of GST not only streamlines the tax structure in India,
but also reduces chances of non-compliance and tax
evasion. These advantages of GST regime will benefit the
formalisation of retail and aid in the growth of organised
retail for interstate movement, creating a level playing
field for pricing with respect to unorganised retailing
and sourcing. For instance, decisions on warehouses will
be taken on commercial perspective rather than on tax
impact, resulting the retailers to be in a position to better