Ethnicwear Market Understanding india's - Technopak
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Understanding India’s Ethnicwear Market Indian ethnicwear market was estimated to be of `82,220 crore in 2014 and is expected to grow at a CAGR of 9 percent to reach `1,26,210 crore in 2019. The market is dominated by women’s ethnicwear which contributes 83 percent to the total ethnic market followed by kids’ ethnicwear and men’s ethnicwear with shares of 9 percent and 8 percent contribution respectively, shares Amit Gugnani, Senior Vice President - Fashion and Kanti Prakash Brahma, Principal Consultant - Fashion at Technopak. IMAGES Business of Fashion
FASHION BUSINESS
Ethnicwear is one of the most
dynamic fashion categories
Within women’s ethnicwear,
India’s fashion retail market is going salwar kameez category has
through a dynamic phase marked high growth potential
by the transition from unbranded to
branded apparel, from physical stores
to omni-channel retailing, from utility Sarees, salwar kameez and blouse/
based apparel purchase to occasion petticoat constitute the women’s
specific apparel purchase. Among ethnicwear market. Saree is the biggest
various fashion categories, ethnicwear category by size with a share of 50 percent
category has emerged as one of the in 2014, followed by salwar kameez and
most exciting categories owing to the blouse/petticoat at shares of 41 percent
revival of demand of ethnicwear across and 9 percent respectively (Exhibit 2). It is
age groups, especially, among the expected that the salwar kameez category
youths of both the genders. Though the will grow at a CAGR of 13 percent over
demand of westernwear categories has the next 5 years while the corresponding
gained momentum in the recent years, growth rates for saree will be 5.5 percent
ethnicwear has managed to reposition and that of blouse/petticoat be 4 percent.
itself as a preferred attire for specific In addition to the traditional use of salwar
occasions. Combination of a numerous kameez, increasing acceptance of the
factors like product innovation, innovative category as a formal attire by working
marketing, amalgamation of ethnicwear women is expected to contribute to the
with westernwear, relative under- higher growth of the category. Owing to
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penetration of brands in this category etc. the higher growth rate of salwar kameez
have contributed to the exciting growth category, it is expected to become the most
trajectory of ethnicwear. dominant women’s ethnicwear category
in 2019.
Ethnicwear market of India is
expected to increase at a CAGR of Key ethnicwear-specific
9 percent over the next 5 years consumer trends that are acting
as growth catalysts
Indian ethnicwear market was estimated
to be of `82,220 crore in 2014 and is Indian fashion consumers have become
expected to grow at a compound annual more experimentative and image
growth rate of 9 percent to reach `1,26,210 conscious. A strong and growing economy
crore in 2019 (Exhibit 1). The market is coupled with better job prospects, higher
dominated by women’s ethnicwear which disposable income and profound impact of
contribute 83 percent to the total apparel media and technology is revolutionising
market followed by kids’ ethnicwear and buying behaviour of Indian consumers.
COVER STORY // November ISSUE | 2015
men’s ethnicwear with shares of 9 percent Consequently, the entire fashion landscape
and 8 percent contribution respectively. of the country is evolving at a rapid pace.
The Indian fashion market has also
witnessed certain category-specific
consumer trends that have impacted
market dynamics of ethnicwear. The key
consumer trends related to ethnicwear
are: 1. Increasing occasion specificity of
fashion, 2. Growing demand of branded
Exhibit 1: Ethnicwear market in india Exhibit 2: Category-wise Break-up of Women’s Ethnicwear
CAGR 9%
2019 (P)
9%
7%
2014
43%
12,170
50%
10,610
7,430
Total - 1,26,210
Total - 82,220
6,740
1,03,430
41%
68.050
50%
Saree Salwar Kameez Blouse/Petti Coat
Womens Mens Kids
Source: Technopak Analysis
Indian consumers no longer stick
to formal or casual attire for family apparel, 3. Increasing value consciousness fit. Growing disposable income, increasing
functions and marriage ceremonies, and 4. Rising acceptance of alternative aspiration levels among youths are driving
they rather prefer ethnicwear that retail channels (Exhibit 3). factors for branded ethnicwear market
reflects uniqueness of the Indian in India. Consequently, the ethnicwear
cultural ethos. Trend #1: Growing preference of occasion- market, in recent years, has witnessed
specific clothing is making ethnicwear the high growth trajectory of existing brands
most preferred choice for social functions. as well as entrance of many new brands.
While the Indian brands compete with
Indian consumers no longer stick to formal international brands in westernwear
or casual attire for family functions and categories, they have an edge in
marriage ceremonies, they rather prefer ethnicwear products.
ethnicwear that reflects uniqueness of
the Indian cultural ethos. This trend Proliferation of brands is more
has extended to national days like the distinguishable in women’s ethnicwear
Independence day, Republic day etc., as unlike men, women use ethnicwear as
when ethnicwear takes a lead over other formalwear as well.
categories. Innovative marketing and
promotion (by brands) that links days Trend #3: The value conscious consumers
of national importance to display of prefer private labels, wait for discounts
patriotism through ethnic attire has and promotion.
contributed to the growing demand of
ethnicwear for such occasions. Many The value conscious consumers seek
corporates, both Indian and international, better deals while opting for ethnicwear
have started encouraging ethnic dressing fashion. They wait for discounts, gift
during the occasions of Diwali, Holi etc. coupons and special offers to purchase
their ethnic fashion. High price inflation in
Trend #2: The ethnicwear consumers are recent years has increased the number of
seeking association with brands. value conscious consumers. Private label
offerings of retailers have managed to tap
The ethnicwear consumers have started the quality and price requirements of these
inclining towards branded apparel owing consumers. Almost all the key retailers
to assurance of better design, quality and have introduced their private labels that
IMAGES Business of FashionExhibit 3: Key ethnic specific consumer trends
Source: Technopak Advisors
FASHION BUSINESS
Occasion specific clothing Preference for branded apparel Value consciousness Adoption of alternate channels
The Indian consumers, The ethnicwear Consumers have started India’s fashion consumers,
both men and women, consumers have started factoring in ‘value for including the ethnicwear
increasingly prefer inclining towards money’ in their etnicwear consumers, no longer limit
to dress themselves branded apparel owing purchase decision. themselves to any particular
depending on the occasion. to assurance of better Consequently, the demand retail channel. Disruptive growth
Hence, ethnicwear has design, quality and fit. for private label ethnicwear of alternate retail channels,
become a preferred Growing disposable has increased substantially especially that of e-tailing
choice for wedding income, increasing in the recent years. has impacted ethnicwear
ceremonies, festive aspiration levels among Brands and retailers have category as well. Consumers
celebrations, historic youths are driving factors started offering discounts, are adopting generic fashion
events (independence day, for branded ethnicwear promotions in more e-tailing websites, ethnicwear
republic day celebrations, market. innovative ways to lure the specific e-tailing websites along
etc.) value seeking ethnicwear with physical stores for their
consumers. ethnicwear requirements
offer optimum combination of quality,
trust and reliability and consumers have Unlike Westernwear, ethnicwear category is directly linked with regional
started viewing these private labels as preferences and ethnicity. Thus, the degree of heterogeneity is much higher in
brands. ethnicwear category.
Trend #4: Consumers are increasing
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adopting alternate retail channels for
ethnicwear as well entrants, the market has its own set of it difficult to club Indian consumers in
challenges. Brands and retailers have a single group. Unlike Westernwear,
The ethnicwear consumers are no longer to focus on the key imperatives of the ethnicwear category is directly linked with
restricting themselves to traditional ethnicwear market to emerge as long- regional preferences and ethnicity. Thus,
retail channels. Indian consumers have term winners. The imperatives for success the degree of heterogeneity is much higher
started looking beyond mere products, in India’s ethnicwear market include: in ethnicwear category. In addition to the
they increasingly seek quality shopping 1. Understanding the peculiarities of above mentioned factors heterogeneity of
experiences combined with best pricing, Indian ethnicwear consumers, 2. Creating choices of a consumer makes the market
wide range of product portfolio, multiple and sustaining a differentiated market even more complex. For example, a women
brands under one roof etc. Consequently, positioning, 3. Introducing innovative ethnicwear consumer might straddle
ethnicwear retailing has evolved from designs, styles and fits, 4. Developing between ethnicwear and westernwear,
traditional family based stores of cities strategic sourcing capabilities, 5. between branded and unbranded
to large format stores, e-tailing, home Integrating retail channels to provide products within ethnicwear and between
shopping etc. seamless shopping experience (Exhibit 4). different brands within branded products.
Availability of multiple retail channels
Consumers have also started accepting Imperative #1. Understanding the have added additional complexity to the
COVER STORY // November ISSUE | 2015
ethnicwear-only online retailers. In fact, peculiarities of Indian ethnicwear issue of heterogeneity.
some of these ethnicwear-only retailers consumers Brands and retailers have to dive deep
cater to the Indian diaspora across Asia, into the consumer mind set and depend
Europe and the US. Indian fashion consumers are of granular segmentation of the market to
heterogeneous by nature, and the address the peculiar needs of consumers.
Key imperatives for success in ethnicwear consumers are even more Ability to customise product offering,
Indian ethnicwear market heterogeneous. Regional preferences, retail channel-mix and promotion strategy
multi-ethnicity combined with income to address the specific needs of various
disparity, life-style differences make micro-segments of ethnicwear market will
While the Indian ethnicwear market unleash long-term growth opportunities
promises a plethora of opportunities for for brands.
existing brands and retailers and newExhibit 4: Key Imperatives for Success in Indian Ethnicwear Market
FASHION BUSINESS
01 Understanding the peculiarities of Indian ethnicwear consumers
02 Creatingh and sustaining a differentiated market positioning
03 Introducing innovative designs, styles and fits
04 Developing strategic sourcing capabilities
05 Integrating retail channels to provide seamless shopping experience
Source: Technopak Analysis
Imperative #2. Creating and sustaining a Imperative #4. Developing strategic
differentiated market positioning sourcing capabilities the potential to increase fulfilment rates,
reduce inventory cost, enhance customer
In a market characterised by multiple Ethnicwear sourcing requires a deeper experience and retain customers. However,
brands (especially in women’s ethnicwear), understanding of the strengths and achieving seamless shopping experience
heterogeneous consumer preferences capabilities of traditional artisans as well will require a robust understanding of
and readily brand-switching consumers; as that of organised manufacturers. As consumers, retail channels, product
creating a differentiated value proposition discussed earlier, the consumer class is and technologies. This is not very easy
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through any one or a combination of characterised by heterogeneity and thus to achieve as in India all these factors,
product portfolio, cost leadership, service, the sourcing volumes are low, sometimes consumers, channels, products and
customer orientation, retail experience etc. sourcing gets localised depending on technologies, are undergoing through a
shall be key to achieve sustainable growth. peculiar demands of specific markets. transitory phase marked by rapid evolution
Deployment of advanced consumer On the high end of the market, the from one phase to another.
analytics, right store location selection, affluent consumers seek uniqueness of
judicious visual merchandising etc. are the design, a glorified heritage of location Conclusion
some of the areas that could differentiate that the product is sourced from etc.
brands and retailers. These additional requirements make the
sourcing volumes per style even lower. In The Indian ethnicwear market is evolving,
Imperative #3. Introducing innovative an era where the consumers are seeking business models of brands and retailers
designs, styles and fits instant gratification of their fashion needs, have to evolve accordingly
dealing with multiple artisans, sourcing It is critical to bear in mind that in a
Both men’s and women’s ethnicwear partners, working in collaboration with constantly evolving retail landscape,
markets have witnessed introduction them to develop products, managing the set of associated opportunities and
of innovative products, attractive inventory in the entire value chain shall challenges evolve in tandem. The brands
COVER STORY // November ISSUE | 2015
designs, contemporary styles and fits. be critical to achieve sustainable profit in and retailers have to revisit their business
The consumers will continue to seek ethnicwear market. model, strategic and tactical decisions on
new features in ethnicwear that will a regular basis to factor in the changed
differentiate her/him from the rest. Hence, Imperative #5. Integrating retail channels market dynamics. Understanding the
brands and retailers who could constantly to provide seamless shopping experience consumers, keeping a track on technology
introduce differentiated fresh merchandise innovations and building a customer-
are expected to sustain their market With increasing acceptance of alternative centric responsive and scalable business
positioning. retail channels, brands and retailers not model are three key defining factors that
only have to ensure presence in multiple will shape the future of ethnicwear brands
retail channels, they also have to integrate and retailers.
various channels to provide a seamless
shopping experience to the ethnicwear
consumers. Omni-channel retailing has
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