Wrapping India in Fashion
India is the world’s newest market with most powerful prospectus.
It’s festive season in India. What’s the most important thing to do? Celebrate? Cook ? Nah. Buy clothes!
India is one of the biggest fashion markets in the world and it is actually at it’s infancy. Till now, clothing was dominated by local brands and factories. But as amazon(time) progresses, bigger brands are gaining deeper penetration into the markets.
The beginning of the 21st century brought about a stable and clear picture of the Indian Fashion Industry.
As accelerating real estate costs and complex regulations delay the entry of foreign brands into India, some brands prefer to avoid spending millions on stores, marketing and hiring talent, and are instead testing the market by stocking their merchandise with specialist online retailers and marketplaces such as Jabong and Myntra, somewhat like Flipkart.com partnered with Motorola to launch the latter’s “MotoG” range of mobile phones in the country. Premium brands want the comfort that the site they are choosing has the right collection, image and capability to sell their merchandise.
India’s apparel market will be worth $59.3 billion in 2022, making it the sixth largest in the world, comparable to the United Kingdom’s ($65 billion) and Germany’s ($63.1 billion), according to data from McKinsey’s FashionScope.
Even though stringent policies govern retailing of foreign brands to Indian consumers, specially through brick-and-mortar stores, selling foreign brands to consumers via e-commerce remains an ambiguous segment. Right now, the Indian government allows 100% foreign direct investment (FDI) only in business to business e-trading.
While luxury brands often create their approach to each market, they must be even more nimble and soft to crack India. There are about “20 different Indias”, and each has their own customer preferences, says Cecilia Morelli Parikh.
Alliances with well-known designers also help, as India already has established luxury designers like Sabyasachi Mukherjee with whom wealthy shoppers have a history. Saree is the highest selling fashion apparel (greater than 1/3 of apparel sales) in India.
For example, the country has a reputation as a producer of hand embroidery. International brands that work with established homegrown talent can build on their efforts, instead of starting from scratch and potentially missing the mark plus opportunity. “International brands need to be aware they will be compared to Indian labels,” says Gehani.
“Consumers develop an emotional connection only when you respect and work towards making products that are best suited for the country that you are selling them in,” quotes Christian Louboutin’s country head Anjali Gaekwar, adding that successful brands manage to balance both their own aesthetic and local cultures.
Dating back to the Mohenjo Daro civilization, the earliest preliminary version was found in the statue of Mother Goddess wearing a piece of cloth around her waist. Her torso was covered with jewels. Apart from this era, the ancient Vedic literature states the existence of Phataka made from leaves and barks. India has a strong history of fashion.
The high-end-elite class, is just 4 percent of the overall population, the absolute numbers are far too attractive & lucrative for any luxury brand to ignore. These numbers are expected to rise from current 10 million to 26 million households by 2025. Besides, it is estimated that India will witness a three-fold increase in HNI wealth through the decade.
There are numerous NGOs which harness the talent of underprivileged women to make delightful accessories and bags, but this is rarely considered as fashion.
Indians no longer simply wear what movie stars wear, rather their choice in attire is shaped by influencers, athletes, bloggers, fashion consultants, fashion designers, global trends, a rich social media landscape, friends, and of courses Bollywood and Hollywood. While conformity is still valued, being distinct is as well.
The reason India’s fashion industry will have a bright future is that it has a large young population. This, combined with increasing disposable incomes, has led to an increase in consumerism.
At the same time, “The spending decision of a large portion of our top clients does get influenced by the stock market fluctuations. It’s not that they have become poorer overnight but before splurging on Rs 2.5 lakh accessory, they may pause or instead of buying four, pick two. Even Indian billionaires are value conscious. The psychology of the Indian spender is very different. They will shop luxury in India largely for their wedding trousseau for the comfort, ease and timing, but shopping for retail therapy is still a part of the overseas jaunt. Some have bled, some had their go-to market strategy wrong. But luxury shopping is still happening even if the average shopping basket has shrunk.”
Huge potential exists in India’s booming fashion sector, however it is important to find the profitable formula for the price-sensitive India market. Many global brands like Gap and Zara initially struggled due to high operational costs and started making profits only after slashing prices in the country. All in all, we can see a rising Sun in Indian fashion with rays beaming of LV, Gucci, Versace, and all shimmering names you’ve heard of!
