INNERWEAR: A POTENTIAL SEGMENT FOR INDIA
For over a decade now, we have been hearing that innerwear is coming out of the closet…, but finally it is truly out in the open and prominently visible in stores and online shopping sites with more and more people comfortable in buying not only basic innerwear but high-end fashion inners. This fast-moving category is being driven globally by increasing awareness regarding personal hygiene, rising disposable income, on-the-go lifestyle, improved living standards and changing preferences of consumers. It is further fuelled by the spread of modern retail formats both off and online and increasing product visibility.
Under the larger umbrella of innerwear, the market is segmented between the men’s market and the more fancy-driven women’s wear market.
And both the markets are significantly growing. While the global men’s innerwear segment is estimated to be growing at a CAGR of 5.8% to reach US $ 13.6 billion by the end of 2024, the global market for womenswear is projected to be growing at a CAGR of 6.4% to reach US $ 55.83 billion by the end of 2024. Organized retail penetration and growth of monobrand and multibrand outlets worldwide are driving sales further.
Yet, sadly, Indian manufacturers of innerwear, both in menswear and womenswear segment are concentrating more on the domestic market, choosing to ignore the huge potential that exists abroad. Even those who are working in the export market are mostly focusing on men’s segment, where margins are relatively less. India has but a few top-end lingerie manufacturers attempting global market. But then can we really blame them considering that the Indian market is ripe for the best brands with a market size that is growing at an estimated
CAGR of 12.2%.
Currently, the domestic underwear market is estimated at nearly Rs. 24,000 crore (US $ 4000 million) according to a 2016 report by Intimate Apparel Association of India and Wazir Advisors. It is expected to become a
Rs. 47,000 crore (US $ 7833 million) market, which is nearly 8% of the total estimated apparel market, by 2020. The men’s underwear market is currently valued at around Rs. 8,500 crore (US $ 1417 million). With increasing disposable income and changing consumer attitudes towards the category, the segment is expected to maintain growth to reach Rs.16,500 crore (US $ 2750 million) by 2020, added the report.
No wonder, domestic players are expanding. We have several prominent names who have carved a distinct niche for themselves in the Indian innerwear domain such as Rupa and
Co. Ltd. (MacroMan, Frontline and
Euro), Lux Industries Ltd. (Lux Cozi), Dollar Industries Ltd. (Bigboss, Club) and Maxwell Industries (VIP, Frenchie). Recently, Advent International, a leading US-based private equity investor, has acquired Dixcy Textiles, Tirupur, a prominent player in domestic undergarment industry. Dixcy with a strength of nearly 3,500 people, plans to raise money from private equity funds at a valuation of Rs. 3,000-3,400 crore
(US $ 500 to 567 million). Talking to any company of this segment, one can find out that despite all variety of challenges, they are confident about the growth of the entire innerwear industry be it men’s undergarments, lingerie, shapewear etc. Sanjay K Jain, MD, TT Ltd, Delhi; Chairman of NITRA and Vice Chairman CITI, feels that undergarments export is increasing but at a very small pace. He even states that “Our exports have grown multifold because we were working on a very small base earlier.” He further added that innerwear market will grow consistently, and the biggest opportunity is going to come from the unorganized market shifting to the branded players like him. “Hence, I see growth coming from market expansion and market shift. TT limited, one of the most famous brand
in India, is offering the complete range of innerwear for gents, ladies and kids. It currently produces 3 million pieces per month. In the last fiscal, the company had a turnover of Rs. 678 crore (US $ 113 million)” shared a proud Sanjay.
Yusuf Dohadwala, CEO, Intimate Apparel Association of India
(IAAI), claims that overall Indian intimatewear industry is witnessing the fastest Y-o-Y growth which is estimated at 18-20 per cent and this growth is the highest in the world. IAAI is one of the prominent bodies of Indian intimate apparel industry. One of the strong reasons for this growing innerwear industry is its large basic necessity. This makes it almost recession proof with minimal effect from negative market trends. Although according to Sanjay, due to psychological impact and pipeline inventory, the Indian innerwear industry faces short-term recession impact as seen in demonetization and GST period.
In the words of Yusuf, “Things are fast changing in India with consumers getting more evolved. Fashionable intimatewear is rapidly growing and taking large space in the wardrobes especially for women’s category.”
Why not export…
Brandix, Quantum Clothing, Seeds Intimate Apparel, Pratibha Syntex, Eastman Exports Global Clothing, Best Corporation, SGM Garments, Clifton Export, KPR Mills… these are few of the selected companies in India that are into export of these product segments; while in domestic market, there is a long list of strong and public limited companies who are achieving tremendous growth in almost all product categories of innerwear segment. So what is stopping them from exploring the overseas market? “Overall competitiveness in India is an issue due to unfavourable FTAs and bilateral agreements vis-à-vis our competitors like Bangladesh, Vietnam, Cambodia etc. Hence, exports are mainly limited to Middle East and African nations – further domestic brands need to get more organized and integrated to cater to USA and Europe in a bigger way,” said Sanjay thoughtfully. He also feels that both domestic and exports have enough scope but export growth would somehow depend on Government policy and support. Yusuf informed, “We already have over 1,000 labels in innerwear segment who cater to the Indian market. Exports from India for innerwear are apparently very less but growing. However, our industry has to work on poor skills in manufacturing of value-added products or fashionable products. Therefore, at present, we can export only basics. For valueadded products, India is unable to meet the efficiencies found in China, Bangladesh, Sri Lanka, Vietnam, Cambodia, Indonesia. To be competitive in exports, it is very important to have raw material base in India, especially for lingerie segment which is very low. Hence, to
“Things are fast changing in India
with consumers getting more evolved. Fashionable intimatewear is rapidly growing and taking large space in the wardrobes especially
for women’s category.” do export, we would have to depend on China for raw materials, hence increasing the lead time and which is why buyers don’t aim at coming to India.”
According to Yusuf, few lingerie companies who are really doing well do not have capacities for exports. Their market in India itself is large and growing which doesn’t allow them to look at exports. Being a highly-skilled driven industry, somehow it hasn’t been able to implement skill development programmes effectively to support intimatewear manufacturing. He adds, “Unfortunately very few, including our Government, fail to understand how potential employment-generator this industry can be. Smaller countries like Vietnam, Bangladesh, Cambodia have understood this and excelled.”
Experts do feel that India’s innerwear industry is at a nascent stage and has lot of potholes like lack of skills for producing technical and quality products, poor availability of technicians and lingerie designers, dearth of quality raw materials for which India has to depend on China. This makes the import duties on raw materials high and the products expensive. To overcome such challenges, Yusuf briefed that IAAI organizes events like Galleria Intima which address the raw material challenges in India and gradually increase exports from India. IAAI is also creating awareness through seminars to help the Indian manufacturers and brands to upgrade their knowledge and be competitive.
With regard to lingerie manufacturing, it was being said that there are suppliers who can’t offer all accessories together (in proper shade) for bra and more or less things have not improved much even currently. Small components like rings, sliders, hooks and eye tapes are not available in
India which can pass the quality standards for top brands. Additionally, India lacks enough technical training institutes, arrangements for lingerie/
“Our existing business of ceramic is passing through recession, so we are planning to enter into textile industry. Initially, we will
be investing Rs. 3 crore into knitting and stitching machines, and will start with undergarment
manufacturing. Due to less dyeing, value addition and PD issues, undergarment seems to be the best product category to start
with. Hopefully production will start in one year. Export is also on
our radar but at a later stage.”
Sanjay K Jain, MD, TT Ltd., Delhi; Chairman of NITRA and Vice Chairman CITI
Nikhil Kotak, CEO, Kotak Overseas
IA Badi, Neon Industries, Rajkot
Yusuf Dohadwala, CEO, Intimate Apparel Association of India (IAAI)