Big brands fight it out in the post-pandemic playground

With the onset of 2023, the apparel industry is focussing on changing the customer landscape based on buying preferences and current revenue models in both online and offline shopping. In offline sales, the next generation of brand retail stores is becoming more high-tech and aesthetically appealing while moving from being just a point of sale to a total retail experience while the same is happening in online 3D visual shopping experience.

Current retail scenario

The online Indian retail market in India is estimated to be 25 per cent of the total organized retail segment and is expected to reach 37 per cent by 2030. Fashion, personal

• India’s retail market is expected to touch $1.7 trillion by the end of this decade

• Online retail market is expected to reach 37 per cent by 2030

• Retailers and mall developers saw 15-20 per cent growth in end-of-season sales this year

• With over two lakh weddings this season, the ethnic wear market seen a surge after two years care and grocery are expected to account for around two-thirds of e-retail market. Among these, both apparel and footwear is expecting favourable growth environment with improvements in distribution and retail channels.The world of retail has undergone a massive paradigm shift due to digital shopping and supply chain transformations and evolving customer demand. Customers expect omnipresence from retailers and brands as they want to be able to reach brands whenever and from wherever. And in this hypercompetitive market, brands that are capable of providing convenience, choice and experience to their customers have a better chance of winning the customer acquisition race.

As per Pallab Roy, Partner, Business Consulting KPMG- India, India’s retail market size is expected to touch $1.7 trillion by the end of this decade. With India being the 5th largest economy in the world, the potential of its retail market is greater than ever. Additionally, we have the second-largest number of internet users and the third-largest number of e-com users in the world. “Roughly 25-30 per cent of our mobile-using populace actively shops on the internet, making current market trends most suitable for Indian retail brands,” Roy highlighted at a recent ETRetailSalesforce roundtable conference.

Online retail turns lucrative for most brands

As per an IBEF study in December 2022 and TRAI data of October 2022, India’s e-commerce market was estimated at $75 billion in 2022, and has the potential to grow to $111 billion by 2024 and $200 billion by 2026, at a CAGR of 20-22 per cent.

During and after the Covid years, online shopping has grown beyond expectations. There are now stringent regulatory measures to prevent monopolistic and anti-competitive behaviour and control unfair trade practices in this segment, just like their offline counterparts.

In the fashion space, Amazon and Flipkart have almost 60 per cent market share, although there is now increasing competition from new entrants like Meesho and Nykaa. Big Indian retail giants like the Tatas and Reliance Industries are slowly increasing their presence in the garment and related accessories e-commerce segment alongside their usual groceries and home-related products. India’s social commerce Gross Merchandise Value (GMV) is expected to reach $20 billion by 2026, with a potential reach of $70 billion by 2030.

Both big and small apparel retail brands are going all out to leverage both offline and online models of commerce to increase their market share. Meanwhile retailers have welcomed the incorporation of Open Network for Digital Commerce (ONDC) by the government which aims to create an interoperable network for digital commerce and give a necessary push to the Indian e-retail ecosystem.

Winter portfolio propels brand sales

As per recent analysis by Unicommerce, an integrated SaaS platform that works with some of the leading fashion brands of India, this winter has enabled online fashion industry to grow at 16.4 per cent YoY in order volumes from November and December 2022 over 2021. This growth is attributed to many factors that include evolving consumer behaviour and the rising adoption of e-commerce in the smaller cities.

The accessories and footwear segments have shown tremendous growth of 41.2 percent and 41.7 percent YoY respectively this winter season over last year with growth in fashion accessories being driven by rising consumer interest in products such as perfumes, watches, belts, hats, jewellery, and hair accessories among others. Boots and sneakers along with bags and wallets did well this season with the sharp fall in temperatures along with the wedding and festive party season in full-swing after the two Covid years.

The apparel segment accounts for the majority of e-commerce orders and has seen strong growth of 11.5 percent YoY in winter season. Winter garment products such as sweatshirts, hoodies, jackets and pullovers along with accessories such as caps, mufflers and scarves did extremely well at the cost of summer items such as T-shirts, shirts, tops, and crop tops in the top wear category. The bottom wear segment also witnessed a 10.4 percent YoY growth with denim jeans, track pants, and leggings being the favourite shopped items.

Meanwhile retailers and mall developers say they saw 15-20 per cent growth in endof-season sales this year. End-of-season sales (EOSS), which started at the end of December and continues till the first week of February, have witnessed 15-20 per cent growth, according to retailers and mall developers. Footfalls have also witnessed an increase at both malls and retail outlets. Indeed, the late arrival of winter did dampen sales in December but January helped push sales. Lifestyle Retail chain Chief Executive Officer (CEO) Devarajan Iyer says sales had picked up this month. “The sale season started slightly late in December than the previous end-of-season sale because the onset of winter was delayed by a few weeks. In January we saw terrific demand and now we are seeing strong double-digit growth.”

Cantabil Retail, which sells apparel, also saw double-digit increase in sales and footfalls against last year. “We have received a phenomenal response from our consumers across the country. We have witnessed an increase of 17 per cent in sales and 14 per cent in footfalls than we did last year,” said Deepak Bansal, Director, Cantabil Retail India. “The harsh winter in North India has, in fact, helped Cantabil as our winter wear collection is very popular among consumers and we saw a steep spike in sales during this period. In terms of inventories, yes, they were slightly higher by around 15 per cent during early EOSS days than the regular days.”

Rajesh Jain, MD and CEO of Lacoste India, which sells polo neck T-shirts with the crocodile logo, said the brand had seen its sales go up in double digits over prepandemic days. “We have seen a growth rate of 15-20 per cent in sales this end of season compared to pre-pandemic days. It could have been higher if the north didn’t see such harsh winters. Markets in the West and South are doing well,” Jain said.

Meanwhile Infiniti Mall, which runs two malls in Mumbai, saw its sales pick up in comparison to pre-Covid days. “The response to this sale season has been optimistic and has gained momentum, considering the last festive weekend of Sankranti. EOSS is witnessing 15-20 per cent growth in trading density as compared to 2019. Understanding the growth in customer expectations, various brands across categories at Infiniti Mall are offering up to 50 per cent (discount) for over three weeks, ensuring that our patrons make the most of the sale period,” said Gaurav Balani, deputy general manager (marketing), Infiniti Mall.

Select CityWalk in New Delhi witnessed robust sales and strong footfalls due to demand for winter wear going up. “This endof-season sale is going well and we have witnessed strong demand for winter wear at our mall,” said Yogeshwar Sharma, CEO of Select Citywalk.

Big global brands look for India foothold

While many global brands have already consolidated their position in the country, many new fashion brands are opening up shop in India with all-new collections straight off the European catwalks. Gap for example has tied up with Reliance Retail as the official retailer across all channels in India through a mix of exclusive brand stores, multi-brand store expressions and digital commerce platforms. Recently, Myntra also bagged the rights to distribute the American fashion giant Bebe as the sole distributor in the country.

As a first for the Bestseller India Group, its partnership with Trell has marked the fashion company’s entry into the social commerce sector in India. Having launched the big European fashion brands Jack & Jones, Vero Moda and Only on its platform in the mass premium segment, more international brands are being added to its massive portfolio of 1,000+ brands in beauty and fashion which generates $85.6 million every year.

The Swedish retail giant H&M India which has around 50 stores in India since its foray in 2015 and remains India’s largest fast fashion brand by revenue, recently launched H&M Home which has a wide range of homeware as more and more middle-class Indians aim for an aspirational living of global standards.

Meanwhile retailers and mall developers say they saw 15-20 per cent growth in end-of-season sales this year. End-of-season sales (EOSS), which started at the end of December and continues till the first week of February, have witnessed 15-20 per cent growth, according to retailers and mall developers. Footfalls have also witnessed an increase at both malls and retail outlets.

In sportswear, PUMA launched a mobile shopping app in India to further enhance its digital offerings for consumers with features, such as virtual try-on and 3D animations. The company’s rival Nike too has been doing well in India along with Decathlon India, known majorly for its apparel and sportswear as health and wellness have become priority segments after Covid.

Ethnic wear surpasses sales of previous two years

Winter is also a time for numerous weddings in India, with an estimated two lakh weddings this wedding season, demand for ethnic wear and wedding clothes saw significant rise and is equal to the pre-Covid era. That has driven many brands to plan opening experiential stores in the smaller cities. With a continuous increase in demand and traction towards the Indian wear category, most ethnic wear brands are expecting to grow in the premium segment during this festive wedding season.

Brands like Fab India have launched more diversified ethnic kids wear segment along with launching a gift collection along with gift cards for wedding season presentation purposes. “Consumers celebrating festivals and attending weddings have turned to ethnic wear in a big way. The apparel and fashion business is back just like the pre-Covid days,” said Arindam Chakravorty, Brand Head, Aurelia, a part of TCNS Clothing.

Online sales are also at an all-time high and according to Myntra, the ethnic wear categories for both men and women have seen a demand of 1.5 times more than the previous years. Sales have enhanced the limelight of Indian labels and have resulted in an increased customer base of retail brands like Manyavar, Kisah, TASVA, Libas, Varanga and House of Pataudi.

Looking at the business potential, Raymond meanwhile plans to capture a higher share of India’s wedding market by leveraging its brand and distribution network. It has rolled out 45 ethnic wear stores under the brand Ethnix over the past 18 months.