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Activating consumerism

Prime minister A B Vajpayee and finance minister Jaswant Singh clearly underlined at the recent meeting of the Advisory Council for Trade and Industry, the need for the activating the consumerism in the Indian market to pep up the economy. Mr Vajpayee expects that the GDP growth this year would be more than six per cent. He also stressed to bring in measures to tighten corporate governance so that the investors’ confidence in the industry is not shaken by some of the recent fiscal scandals in the US. Mr Vajpayee was firm that the war threat did not adversely hit economic reforms or the implementation of infrastructural projects. These are highly relevant to the textile industry. The basic cause for the turmoil faced by the different sectors of the vast textile industry is the inadequate demand. Consumers clearly see that the supply is in far excess than the demand. So much so, discounts have become the norms in the market. Be it a festival season, or a school opening season, or industrial uniform providing period, it is a sheer discount war that is used to attract consumers. Nevertheless, given the low disposable income in the hands of the common man, discounts by themselves could not make the high-priced quality garments reach the middle and lower classes who make the bulk of the buyers. So, quality is given a go-by and accompanied by a discount war, the manufacturers and the traders do everything feasible to sell as much clothes as possible. Duplicates, replicas and poor substitution of the brands are common in the Indian garment market. Disadvantage of such a discount war is that while this induces some consumerism, quality suffers. Also, textiles fail to get regarded as premium products. This would affect the business of established houses who are now confined only to the upper bracket of the consumers. It is difficult to be in business for long when the market size is uneconomically small.

On the other hand, an activated consumerism would be prepared to pay more for quality products and to a greater extend demand, quality in the products in the market. The only disadvantage is that uneducated consumers with a disproportionate disposable income might put in a higher price tag for a relatively less quality product in their over enthusiasm to beat their neighbours. This can be countered with a parallel consumer education.

Mr Jaswant Singh has promised that he would come out with specific proposals to increase spending and sustain the ‘feel-good’ factor. “Unless the consumers consume, how could the economy expand?,” he has rightly asked. That is the root factor affecting the textile industry as well. When people are happy, they would first buy good clothes. They buy quality garments and gift to their near and dear ones whenever they visit each other or a festival or a function knocks at the door. This practice has slowly evaded with the disposable income falling and the people finding it difficult to match the quality with the price. With Mr Singh’s promise, the textile industry as a whole and the garment sector in particular can hope for a revival of the demand for the clothes. The Indian market is so large that even a small increase in the per capita consumption could trigger a massive improvement to the overall consumption level. That is why, the garment sector is attaching importance to promotion through fairs. Take the 43rd National Garments Fair to be held in Mumbai from August 7 to 9 by the Clothing Manufacturers’ Association of India (CMAI) where some 15,000 visitors are expected to attend. Some 200 exhibitors are likely to showcase their products. The brands listed include Madura, Arvind, Jole and Oda, Indigo nation, Pepe, Lee Cooper, Tamarind, Provogue, Royal Sporting, Oxemberg and Crocodile. Retail majors like Shoppers’ Shop, West Side, Ebony, Benetton and Lifestyle are listed to participate. Separate enclosures will showcase unbranded clothes as well. Two fashion shows are also programmed.

This is a clear attempt to promote garments amidst the Indians with a belief that even a marginal increase in the per capita consumption would do good for the industry. All the same, there is an equal stress on exports of the Indian garments through fair. Right next week, the 29th India International Garment Fair will be held in New Delhi by the Apparel Export Promotion Council (AEPC) which is expected to garner an immediate business worth $ 20 million. Likewise, importers in the US and EU are showing keener interest to procuring their garment requirements from India in preference to Pakistan or Bangladesh. One importer in the US told this columnist, “You think your Prime Minister killed your business by projecting the escalation of tension at the border. But, by now, most of us in the business know that it is safer to buy clothes from India than the uncertain Pakistan where terrorism is certainly more.” Neutral observers confirm that such a thought is influencing the decisions in US and EU. So, activating consumerism is a right approach for the textile industry which can profitably juxtapose its export orders with the domestic demand.

- P S Sundar