THE IN­DIAN

DENIM WEAR MAR­KET 2016-2026

Business of Fashion - - Cover Story -

With gov­ern­ment’s ef­forts to boost cash­less trans­ac­tions and re­form in­di­rect tax­a­tion with

the na­tion­aw­ide uni­fied tax struc­ture GST, cor­po­ra­tized re­tail is all set to ac­cel­er­ate at a phe­nom­e­nal rate. The youth driven denim mar­ket prom­ises un­matched value as well as vol­ume growth in the over­all In­dian ap­parel mar­ket. Amit Gug­nani, Se­nior Vice Pres­i­dent- Fash­ion and Saima Ni­gar, As­so­ci­ate Con­sul­tant- Fash­ion and Tex­tile Divi­sion, Technopak, size the mar­ket

and delve into its dy­nam­ics as a whole.

The In­dian fash­ion re­tail mar­ket is con­tin­u­ously evolv­ing and is ex­pected to per­form at a high Com­pound An­nual Growth

Rate (CAGR) of 9.7 per­cent to reach USD 115.14 bil­lion by 2026, up from the cur­rent mar­ket size of USD 45.71 bil­lion. Do­mes­tic fash­ion re­tail has been demon­strat­ing high re­cep­tiv­ity to­wards cor­po­rati­sa­tion. The Gov­ern­ment’s ef­forts to boost cash­less trans­ac­tions and re­form in­di­rect tax­a­tion with a na­tion­wide uni­fied tax struc­ture, Goods and Ser­vices Tax (GST) are also ex­pected to ac­cel­er­ate cor­po­ra­tized re­tail. At the same time, the In­dian ap­parel mar­ket is also wit­ness­ing a grow­ing in­cli­na­tion to­wards western and ca­sual wear. Denim is amongst the high­est growth cat­e­gories in the In­dian ap­parel mar­ket.

DENIM MAR­KET SIZE & GROWTH

The mar­ket size of In­dian Denim Wear was es­ti­mated to be `20,205 crores in 2016. The mar­ket is now pro­jected to grow at a CAGR of 14.5 per­cent and reach `39,651 crores by 2021, and `77,999 crores mar­ket by 2026. The men’s denim seg­ment com­prises ~84 per­cent of the mar­ket while the women’s denim seg­ment and kids’ denim seg­ment com­prise 10 per­cent and 6 per­cent re­spec­tively.

Men’s Denim Seg­ment: Men’s denim en­joy the largest share and are poised to grow at a high CAGR of 14 per­cent over the next decade. Un­til a few years ago, denim was pop­u­lar with men in the ur­ban cities only, how­ever, it has now grad­u­ally be­come pop­u­lar in the semi-ur­ban and ru­ral mar­kets also. Grow­ing aware­ness and an in­creas­ing affin­ity for global fash­ion have led to this de­vel­op­ment. Denim is con­sid­ered the most ver­sa­tile fab­ric for men with mul­ti­ple ap­pli­ca­tions over ca­sual wear, work wear and ev­ery­day wear.

Women’s Denim Seg­ment: Among In­dian women, jeans or denim trousers are the most pop­u­lar ar­ti­cles. Women across dif­fer­ent age brack­ets and span­ning all shapes and sizes like to wear denim as it is com­fort­able, func­tional and durable. Denim is also gain­ing pop­u­lar­ity in ath­leisure form among women ow­ing to the com­fort pro­vided by stretch den­ims. Women who are not at ease with western wear have taken up wear­ing jeans by pair­ing them with In­dian eth­nic wear like kur­tis. This mix and match style is grad­u­ally pick­ing up, par­tic­u­larly among women in small towns and those who come from a tra­di­tional back­ground and is likely to fur­ther fuel the growth of the seg­ment.

The fash­ion and fit el­e­ment which is an in­her­ently ne­ces­sity in women’s ap­parel has been taken care of through the in­tro­duc­tion of flex­i­ble/ stretch fab­ric for dif­fer­ent ap­pli­ca­tions.

This seg­ment is ex­pected to grow the fastest at the CAGR of 17.5 per­cent.

Kids’ Denim Seg­ment: This is the small­est seg­ment in the do­mes­tic mar­ket, but is ex­pected to grow at a high rate pri­mar­ily due to the avail­abil­ity of the prod­ucts led by the in­no­va­tions in the in­dus­try for nat­u­ral, hy­gienic and flex­i­ble fab­rics.

IN­CREAS­ING DENIM AFFIN­ITY

The denim seg­ment has al­ways been one of the lead­ing seg­ments in the ap­parel in­dus­try. The blue denim has re­mained a wardrobe es­sen­tial for decades. Due to its in­creas­ing pop­u­lar­ity in In­dia, denim wear is now also wit­ness­ing huge de­mand among masses. There are cer­tain key at­tributes which are mak­ing the fu­ture of denim wear in­dus­try promis­ing:

Dura­bil­ity: This is one of the ma­jor rea­sons which make it pop­u­lar among masses. Denim wear is con­sid­ered durable as it is made up of a sturdy cot­ton twill tex­tile. It is wo­ven in a man­ner that it can be ef­fort­lessly worn in any con­di­tion.

Com­fort: Con­ven­tion­ally, denim was made from 100 per­cent cot­ton, but mod­ern in­ter­ven­tions have made va­ri­eties of denim avail­able in the mar­ket. To­day, denim blended with polyester is also pop­u­lar as it man­ages shrink­age and crease. Stretch­able jeans are also pop­u­lar among masses as they pro­vide com­fort and a bet­ter fit.

Ver­sa­til­ity and Con­ve­nience:

Denim ap­parel are con­sid­ered low main­te­nance, ready to wear clothes, which is an­other rea­son for their in­creas­ing ac­cep­tance. In ad­di­tion, denim wear is avail­able in dif­fer­ent de­signs, stretch and colours which make it a prefer­able choice among con­sumers. Denim is find­ing ways into other com­po­nents of the wardrobe in the form of dresses, jog­gers’ pants, jeg­gings, light weight denim shirts, denim shorts, ac­ces­sories out of denim fab­rics etc.

Avail­abil­ity: Denim wear is now much more eas­ily avail­able in the mar­ket, deeper across the coun­try and across dif­fer­ent mar­ket seg­ments and var­ied price points as well.

Thus, bring­ing it within the reach of dif­fer­ent in­come groups.

PRICE SEG­MEN­TA­TION

The denim mar­ket can also be seg­mented based on its ‘pre­mi­um­ness’. There are there­fore sev­eral clus­ters that cater to dif­fer­ent tar­geted price points. The su­per-pre­mium, pre­mium, and mid-mar­ket seg­ments to­gether made up only 8 per­cent of the to­tal In­dian denim mar­ket in the year 2016. The over­all growth dur­ing the year mainly came from an in­crease in the ‘value’ of sales, which in turn was driven by con­sumers hav­ing higher dis­pos­able in­comes. On the other side how­ever, brands in the mass mar­ket and un­branded seg­ments made up for a stag­ger­ing 92 per­cent of the to­tal denim mar­ket in 2016. The key fac­tors re­spon­si­ble for the growth for this part of the mar­ket was the huge ‘vol­ume’ of sales com­ing from the in­creas­ing pen­e­tra­tion of these

brands into tier -II and -III cities and the ris­ing as­pi­ra­tions of con­sumers from smaller cities to fol­low the lat­est trends like their peers from met­ros.

KEY TRENDS AND GROWTH DRIV­ERS

The In­dian Denim wear mar­ket is cur­rently dom­i­nated by un­or­gan­ised play­ers. How­ever, with many pri­vate la­bels and in­ter­na­tional brands en­ter­ing In­dian ap­parel mar­ket, the in­cli­na­tion to­wards branded den­ims is in­creas­ing among con­sumers.

The fu­ture value growth within the denim cat­e­gory shall be be­cause of the in­creased de­mand for en­hanced prod­uct at­tributes: fash­ion, quotient, stretch and light weight fab­ric, vary­ing colours, styling and de­tail­ing. This trend is emerg­ing across both men’s and women’s seg­ments. The above fac­tors shall com­bine to drive rel­a­tively higher lev­els of growth of the mid-pre­mium and pre­mium/ lux­ury seg­ments as well.

Re­cent trends have in­di­cated in­creased pen­e­tra­tion of denim cat­e­gory across semi-ur­ban and ru­ral cen­tres which shall drive vol­ume growth across mass mar­ket and un­branded seg­ments.

Cer­tain fac­tors which are con­tribut­ing as key growth driv­ers of denim wear in the coun­try are enu­mer­ated be­low:

Youth as a growth driver:

Youth (15 to 29 years old) who com­prise 26 per­cent of the con­sum­ing pop­u­la­tion, are a key growth driver of denim wear in the coun­try. In­creas­ing dis­pos­able in­come, com­fort, qual­ity and brand con­scious­ness are ma­jor rea­sons be­hind in­creas­ing ac­cep­tance of den­ims among this young pop­u­la­tion.

Growth of the or­gan­ised re­tail sec­tor:

The denim wear mar­ket is dom­i­nated by un­branded denim prod­ucts who con­sti­tute ~60 per­cent of the mar­ket and thus tend to give in­tense com­pe­ti­tion to branded denim play­ers. How­ever, with many pri­vate la­bels and in­ter­na­tional brands en­ter­ing the In­dian ap­parel mar­ket, the in­cli­na­tion to­wards branded denim wear is in­creas­ing in con­sumers.

Online pen­e­tra­tion of denim:

In­creased pen­e­tra­tion of internet cou­pled with bur­geon­ing smart phone mar­ket has re­sulted in the growth of e-tail­ing in In­dia. Due to ease of or­der­ing online, paucity of time, flex­i­ble re­turn poli­cies and the cash on de­liv­ery, the youth of In­dia is more likely to pur­chase den­ims online.

In­creased ru­ral spend­ing:

Ru­ral ar­eas are de­vel­op­ing at a rapid pace and so is their pur­chas­ing power. With the per­co­la­tion of mass me­dia, peo­ple in ru­ral ar­eas are also aware of fash­ion trends. Their in­cli­na­tion to­wards western wear is an­other rea­son for the grow­ing de­mand of den­ims in ru­ral ar­eas. The mid-value seg­ment of denim wear, char­ac­terised by qual­ity, value-for-money, and in­creas­ing styling quotient, is the pre­ferred choice of peo­ple from ru­ral ar­eas.

Grow­ing pop­u­lar­ity of en­gi­neered/ dis­tressed denim:

The emer­gence of tat­tered denim has pro­vided a per­fect op­tion for fash­ion con­scious youth. The ap­pli­ca­tions of dis­tressed/ripped/tat­tered/patched denim are not re­stricted to bot­tom wear jeans but can be seen in jack­ets, shorts, skirts etc. These are emerg­ing as one of the most stylish must haves for both men and women. This trend has been re-emerg­ing in many new avatars ev­ery sea­son.

New denim fab­ric washes:

In den­ims, ‘wash’ refers to shade of the denim fab­ric. Jeans man­u­fac­tur­ers are fo­cused in achiev­ing dif­fer­ent hues of blue by wash­ing the fab­ric in cer­tain dyes, bleaches or other agents that af­fect the denim colour. Dark in­digo, faded blue/vin­tage/aged, stone wash and dis­tressed jeans are new denim fab­ric washes in trend these days.

Chang­ing clas­si­fi­ca­tion of con­sumer’s wardrobe:

The change in clas­si­fi­ca­tion of con­sumer’s wardrobe has acted as a growth driver for the ca­sual wear and denim wear in In­dia. Ear­lier, fash­ion was con­sid­ered as a ba­sic need to be pur­chased on the ba­sis of the re­quire­ments. Con­se­quently, the typ­i­cal con­sumer wardrobe was lim­ited to ba­sic cat­e­gories like shirts, trousers, win­ter jack­ets and sweaters, sa­rees and sal­war kameez. The ba­sic pur­chase pa­ram­e­ters were lim­ited to the ba­sic func­tions of the cloth, com­fort and price. How­ever, with the chang­ing so­cio-cul­tural val­ues, in­creased per capita con­sump­tion, in­creas­ing ex­po­sure to in­ter­na­tional fash­ion trends and grow­ing dis­pos­able in­come ap­parel mar­ket is slowly be­com­ing more oc­ca­sions spe­cific. Con­se­quently, fash­ion bas­ket has ex­panded to in­clude cloth­ing like sports/gym wear, oc­ca­sion spe­cific eth­nic wear, jeans etc.

CON­CLU­SION

The In­dian denim wear mar­ket is ex­pected to wit­ness huge growth in the com­ing years. With the coun­try’s ever-ex­pand­ing econ­omy, boom­ing con­sump­tion, ur­ban­i­sa­tion, and grow­ing mid­dle class pur­chas­ing power; denim wear has a huge op­por­tu­nity to grow. The in­creas­ing shift of the ru­ral fash­ion mar­ket from eth­nic wear to western wear is one of the key growth driv­ers of denim in­dus­try. The large youth pop­u­la­tion with ris­ing dis­pos­able in­come and aware­ness to­wards fash­ion will act as a cat­a­lyst in the growth of denim wear in the coun­try.

The denim mar­ket in­deed holds much po­ten­tial for brands and re­tail­ers, how­ever to cap­i­talise on this growth po­ten­tial, re­tail­ers need to fo­cus on fac­tors such as pric­ing, qual­ity, con­sumer pref­er­ences, key trends, in­no­va­tions, etc. Re­tail­ers can also lever­age the avail­able growth op­por­tu­ni­ties in den­ims by ex­pand­ing into online chan­nels and omni-chan­nels of re­tail­ing.

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