Branded garments to grow to 48% of readymade segment in 2019: report
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Bengaluru: As fast fashion brands expand and online shopping gains momentum, the branded garments segment will grow to 48% of the overall readymade garments segment in 2019, from 35% in 2014, said a report from Edelweiss Broking Ltd on Tuesday.
However, the pace of growth is expected to be moderate—from a compound annual growth rate (CAGR) of 15% between 2009 and 2014 to 10-12% between 2014 and 2019, said the report.
The moderation in growth will be seen across menswear and womenswear, it added.
The men’s apparel segment clocked an annual growth rate of 10% over 2010-2015 and is estimated to post 8% by 2020, growing from $13 billion currently to $19 billion.
The women’s apparel segment, which clocked a 9.5% CAGR over 2010-2015, is expected to post an 8.5% CAGR by 2020.
The readymade garments market is estimated at $45 billion, of which the domestic market is around $27 billion, while exports stand at $18 billion. The Indian branded apparel industry is estimated to be $10 billion in size and growing at 10-12% per annum, said the report.
Between 2010-2011 and 2015-16, modern retail’s share has increased from 7% to 16% and this is set to grow to 37% of the overall retail trade by 2021.
Even the online retailing market is expected to grow to $44 billion by 2018 from $13 billion in 2014, with apparel being one of the biggest beneficiaries, accounting for 31% of online retail.
In the branded apparel segment, Madura Fashion and Lifestyle, a unit of Aditya Birla Group company Aditya Birla Nuvo Ltd, is the largest company, accounting for 40% of the revenue pool and 45% of the operating profit pool for 2014-15.
Arvind Ltd’s retail unit Arvind Lifestyle Brands Ltd is in second place with 23% of the revenue pool share and 19% of the operating profit pool.
Interestingly in India, womenswear constitutes only 41% of the market versus 48% share of menswear. Globally, womenswear is a bigger market than menswear. Also, the womenswear segment is highly fragmented with only 5% share going to organised retail.
However, in the coming years this is set to change. In segments like fast fashion, brands like Zara, Westside and Max Retail are focusing on womenswear. The fast fashion segment is the largest in the Indian apparel market with 25% market share.
To be sure retailers are also now focusing on womenswear for growth. For instance, Allen Solly, which started as a menswear brand in 1993, subsequently got into womenswear. “Womenswear now accounts for 15% of our revenues and is one of the fastest growing segments along with kidswear,” said Sooraj Bhat, chief operating officer, Allen Solly who expects the contribution from womenswear to increase to 20-25% in the next few years.
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