Apparel brands see 50% growth in women’s western wear
The market is getting traction and wider acceptance owing to an increase in disposable incomes, and more women joining the workforce
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New Delhi/Bangalore: Women shoppers across metros and smaller cities are increasingly opting for western wear, helping boost sales for branded clothing, making it one of the fastest growing categories in the apparel segment. Traditionally an under-serviced market, women’s western wear is getting traction and wider acceptance owing to an increase in disposable incomes, and more women joining the workforce and dressing smart.
In January, the Aditya Birla Group launched a women’s fusion and western wear label LIVA.
Manohar Samuel, president, marketing and business development at Birla Cellulose, a part of the Aditya Birla Group that provides viscose to large apparel makers globally, said that although ethnic wear is more popular in India, the company wanted to bridge a gap in the market for western wear. In his view, the women’s western clothing market is growing at 30% CAGR (compound annual growth rate). “With the entry of international brands, the demand will surge,” Samuel said.
Estimates by other companies operating in the category peg the growth rate at between 40% and 50% a year. “Women’s western wear is growing much faster than menswear,” said Kabir Lumba, managing director, Lifestyle International Pvt. Ltd that runs the large format departmental stores owned by the Landmark Group.
According to Lumba, the growth may be on a lower base but the entry of organized retailers in the segment is fuelling latent demand. “The women’s category in the past was largely under-serviced. Now women’s wear is getting organized and offering a wider collection,” he said.
Women’s western wear accounts for 25% of the Rs.78,500 crore women’s wear market, as per a 2012 report by consulting firm Technopak Advisors. With an eye on this growing market, Swedish brand H&M will invest Rs.700 crore in India. American brand Forever 21 will also add six-eight stores to its existing six over the next 12 months.
Jitendranath Patri, marketing head for Future Group’s retail chains Central and Brand Factory that sell fashion wear and accessories among other products, said the women’s western clothing market has a big potential in India as the number of brands in the category is still small compared to those in the West. Patri said sales growth in western clothes for women is surging ahead of men’s clothing. “It also has to do with the fact that there are more working women and higher disposable incomes plus the need to look better which is driving sales,” said Lumba.
Western wear may have been slow-moving but it’s definitely the next big future category, said Vishal Kapoor, concept head at Fashion at Big Bazaar (FBB) and chief design officer at the Future Group. The growth rate of sales for western wear is much higher than other categories. Mix-and-match ethnic and western wear in tier 2 cities does exceptionally well for the affordable fashion wear chain that has 28 standalone stores and 165 shop-in-shops.
The overall women’s apparel market is heavily dominated by ethnic wear which accounts for roughly 70-75% of all apparel sales; western wear that has lower penetration vis-à-vis organized retailers, accounts for the remaining, according to a report by Technopak Advisors.
With the relatively lower penetration of brands, and the growing disposable income of modern women, this segment has become the focus of many Indian and international brands, the report added. Denim, innerwear, and tops/shirts/T-shirts are the high-growth categories within the women’s wear segment. Denim is growing at a CAGR of 17% with tops, shirts and T-shirts growing at 11%.
The increase in demand is driving retailers to plan stand-alone stores.
Vinay Bhopatkar, brand head at formal wear label Van Heusen from Madura Fashion and Lifestyle, said the company was adding 10 standalone women’s wear stores over the next 12 months to its existing 10. “Through the formal wear portfolio we can leverage the higher price point premium apparel space,” he said.
The brand, which spun off standalone apparel stores in 2007, is now seeing more traction in the category, which is growing at 40-50% year-on-year. “Acceptance of ready-to-wear is very huge, specifically formal wear,” Bhopatkar added. Half of all women shoppers at the brand opt for work-wear.
A younger demographic adopting new trends is driving demand for western clothing among women, said V.C. Mouli, brand director at apparel brand Arrow, which introduced women’s formal wear in 2009. Arrow is retailed by Arvind Lifestyle Brands Ltd, and the sales growth of its women’s range at key account stores has been outstripping those for men’s formal wear, Mouli added. Formal shirts and trousers for women see bulk of the sales at the retail chain. British retailer Marks and Spencer, which has close to 40 stores in India, is seeing women’s wear emerge as one of the biggest category in India. “We don’t give individual (category) numbers, but it is one of the biggest categories we have,” said Venu Nair, managing director of Marks and Spencer Reliance India, in an interview with Mint in December 2013. The retailer’s women’s wear sales in India were up 32% in the April to September 2013 period.
Tier 1-2 markets, where the reach of organized retail labels is still limited, are also seeing similar traction both in terms of volume and fashion trends. “...what we are seeing is a little better traction in women’s clothing in smaller towns,” said Sanjeev Mohanty, chief executive officer at Benetton India Pvt. Ltd. Currently, Benetton sees 60-65% of its sales coming from men’s wear. “Women’s is a slightly more buoyant market right now, growing at a faster pace,” he said.
Online retail, too, is opening up doors for consumers in smaller towns, said Kapoor of Future Group. Younger girls in the non-metros are experimenting a lot with western outfits, said Mukesh Sawlani, director of AND Designs India Ltd that operates 107 stores under fusion and western wear apparel brands such as Global Desi and AND in India.
Patri attributes the growing demand to better collections. “There are new brands entering this market and the existing players are also adding to their range. The most popular price point for women’s clothing is Rs.800-Rs.1200 which is significantly lower than that for menswear. “It’s because women simply tend to buy more products as they like variety compared with men who buy fewer but more expensive products,” Patri said.
With surge in demand for western apparel retailers across the board are seeking to expand their collections. Ethnic wear retailer Fab-India, will start selling western wear for both men and women sometime this year, according to a an Economic Times report dated 29 January.
Even as the retail sector continues to face the headwinds of slower growth rates, where consumers across metros have been cutting back on discretionary spending, women’s western wear is one of the categories that is working for retailers, showing a steady growth on a low base. According to a 24 January note by India Ratings on India’s retail sector, FY13 was possibly the weakest period since FY10 for the sector with margins falling by 110 basis points from FY12. A basis point is a hundredth of a percentage point. Mouli at Arrow added that despite a slower rate of growth over the past few quarters, demand for women’s wear as a category was intact for the brand.