The ethnic wear market in India has grown, and strangely enough, by becoming more western, according to executives in apparel companies. The trend is visible even in offices—in women sporting Indian-style pantsuits and men, sharply cut Nehru jackets.
“Traditional Indian wear has merged with western wear with the introduction of fashion bottoms and short kurtis (a sort of a tunic). It has stylized a lot and doesn’t look traditional anymore,” says one executive in the business who asked not to be identified because the firm is in the silent period.
Interestingly, most occasion related buys of apparel are of ethnic wear—whether they are for weddings or festivals such as Diwali.
Expectedly, companies are scrambling to cash in on a segment that is growing by 15-20% a year. Max, a brand owned by Landmark Group that runs the Lifestyle stores, is entering the men’s ethnic wear segment with a private label, Tavish. The brand is an extension of its women’s ethnic wear called Tavisha.
“Two years ago, we would not have thought of experimenting with our ethnic range. Tavisha’s success has inspired us to expand,” said Vasanth Kumar, executive director at Max, adding that ethnic garments account for 18% of the brand’s revenue, up from 12% two years ago.
Max isn’t the only one to realize this is a good business.
In May, ethnic menswear company Manyavar entered the women’s traditional wear segment with the brand Mohey. The Vedant Fashions-owned Manyavar, which already operates 400 stores (including 30 outlets of Mohey) plans to add a total of 300 more stores by the end of 2020. Ravi Modi, founder and managing director of Vedant Fashions, declined to participate in this story.
Companies are not eyeing men and women alone, but also children. Women’s ethnic wear company Biba Apparels Ltd recently announced its plans to open five stand-alone kidswear stores. These stores will only sell ethnic apparel and contribute Rs70-75 crore to Biba’s total revenue.
The big push, executives at apparel companies admit, has been the westernization of ethnic apparel. According to Siddharath Bindra, managing director at Biba Apparels Ltd, there is a blurring of lines between ethnic and western wear today. The former is now “versatile” and “easy to wear to work” but still ethnic, he said.
“Biba would not straight away make an office formal pant. We would make it with a touch of ethnicity in terms of fabric and cuts—slightly differentiated from western wear,” he added.
Even men’s ethnic collections today are inspired by western designs and silhouettes, said Kumar of Max. “We will be introducing a more westernized ethnic menswear range in our upcoming spring collection which will include long shirts in denim,” he said.
The challenge for companies is to stay relevant and contemporary as “fusion ethnic”, a mix of western wear and traditional wear, becomes the choice of customers, said Abheek Singhi, senior partner and director at Boston Consulting Group.
Some experts have a different theory for growth of the ethnic apparel segment—a shift from the unorganized sector to large retailers and companies. “It is not as if this segment has grown out of nowhere, but it was largely addressed by unorganized retailers. That has shifted to the branded space,” said Ankur Bisen, senior vice-president, retail and consumer, Technopak Advisors.
Bisen admitted that many of these brands have expanded their ethnic offerings to “daily wear”. “Earlier, daily-wear ethnic apparel was addressed by neighbourhood boutiques and tailors and only occasion wear was considered ethnic in the branded space.”
The growth has attracted investors. In August, private equity firm TA Associates Management invested $140 million for a minority stake in TCNS Clothing Co. Pvt. Ltd that owns women’s ethnic wear brands including W.
According to a Mint report dated 3 August, several global private equity firms had shown interest in investing in Manyavar and approached bankers in Mumbai and Kolkata to start discussions with the company. Vedant’s Ravi Modi wasn’t interested, the report added.
In 2013, Warburg Pincus and Faering Capital invested about Rs300 crore in Biba Apparels Pvt. Ltd in a deal that valued the company at around Rs1,000 crore.
“There have been multiple investments that have happened in this space in the last two-three years. Investors see growth opportunities here. The first round of investors have exited and now, second cycle of investors are entering,” said Bisen.
According to a Technopak report titled ‘Understanding India’s Ethnicwear Market’, the size of the Indian ethnic wear market was estimated at Rs82,220 crore in 2014 and is expected to touch Rs126,210 crore by 2019.
“The market is dominated by women’s ethnic wear which contributes 83% to the total market followed by kids ethnic wear and men’s ethnic wear with shares of 9% and 8%,” the report said.