LEAD STORY
Delhi-NCR still relying on value addition for business
• The region is the most expensive among the apparel manufacturing hubs in India.
• Embroidery, prints, sequin work and other value-added techniques are the specialisation.
• The export industry is now exploring the domestic market to tide over the lean period.
• Athleisurewear is a new category that many companies are looking at; most are testing the waters in the domestic market.
• Expansion plans, if any, are mostly in other states.
Among the oldest garmenting hubs in India, the Delhi-NCR region has been known for its strength in womenswear, mostly because of the wide value addition options available and the small run factories that make fashion garments. International buyers understand this edge and place orders accordingly. However, of late, many other hubs have also upped their game and are offering techniques and quantities that previously were only possible in Delhi- NCR. The competition has increased significantly and factories in the region are searching for new ways to stay relevant. From going deeper into the niche category to consolidating the operations and exploring new markets, the region is in the process of revaluating its growth avenues and potentials.
Delhi-NCR, home to thousands of small exporters …
There is a segment of exporters and industry watchers who believe that nothing has changed in this region … The big exporters are still growing; the middle ones are stable and investing in ways to stay relevant, while the small ones are struggling for survival. But, there is also a segment that believes that this slow phase has actually been good for the industry as a whole and for Delhi-NCR, in particular, as the region is home to a large number of small and medium companies who are thriving with importers / wholesalers and small boutique stores, which have withered the slowdown that has affected the bigger brands and retailers, in a much better way, though prices have been hit.
These small- to medium-level players are the backbone of the garment export industry and a majority of them are predominant in the Delhi-NCR region. Many of these players, particularly the smaller ones, have either closed shops or have reworked their strengths as global economies continue to put great pressure on prices along with several policy changes, in particular GST, which has really hit these small players hard.“ The bigger exporters have the resources to follow-up on the GST procedures and documentation, as also the power to pressurise the Ministry for refunds. If you check, none of the small exporters have got the refund yet, while the bigger companies have received their refunds,” says Anil Varma, President, Delhi Exporters Association. He further points out that overall GST refund is about 7-8 % of total turnover and from a small exporters’( Rs. 1-5 crore) perspective, that is actually his margin.
Value continues to pull in the buyer …
It is no secret that this region has the highest wage and cost of production, yet buyers still come searching for uniqueness.“ The NCR is very important to garment trade and even today, when other centres are coming up strongly, the region accounts for nearly 40 % of total garment exports from this country,” shares HKL Magu, Chairman, AEPC and MD of Jyoti Apparels, one of the stalwarts of the industry and the Delhi-NCR region. He adds that the industry as a whole has seen some difficult times, but singling the NCR as having the biggest impact is not fair. In fact, exporters in the region are the most flexible in design and quantities, thanks again to the small- and medium-level players that buyers find very creative to work with.
Players in the region understand that just giving value addition is not enough and they are giving buyers compelling reasons to come back season after season.“ Buyers come to us because our product is more of niche than mass. If price is a concern, we can change fabric depending on target prices set by buyers. We start with at least US $ 8 / 9 and it goes up to US $ 20 per piece. Majorly our business comes from the product that varies from US $ 12 to 16. Buyers come seeing the product. We have everything in our product right from embroidery, print to other value addition,” shares Arjun Sehgal, Director, Mariko Plus. To be even more niche, the company has developed skills related to embroidery
18 Apparel Online India | OCTOBER 1-15, 2018 | www. apparelresources. com