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Indian brands face stagnant turnovers

Branded apparel sector consolidating to increase market share
Reena Mital - Mumbai

The Indian branded apparel sector, especially in the menswear segment, is going through a process of consolidation, with turnovers of most of the brands remaining stagnant at a level of around Rs 60 crore, (except Park Avenue which is a Rs 100 crore brand).

"The branded segment for menswear is concentrated in only the top 20 cities in the country, and there are far too many brands fighting for a share of this limited pie," according to officials of one of the new entrants in the men's wear segment.

And even as each brand tries to differentiate its product in the market, "this is very difficult, being more of a mass-market segment, with a high level of standardisation," opine sources. So, to increase market share, most brands have moved into formal, semi-formal and casual wear, and are also looking at the women's wear and sportswear segments, which are not as saturated.

According to Mr Ashish Pandya, vice president, sales and marketing, Arvind Brands, which has recently launched one more brand `Bay Island', "Bay Island is a more casual style of dressing, in a very affordable price range from Rs 539 to Rs 599 for shirts, and trousers at Rs 749. However, it is the classic shirts and trousers that contribute the most to our turnovers."

Mr S Padmanabhan, senior president, Tamarind, S Kumars, concurs with this. "We have introduced a lot of new age and innovative fabrics in our collections, but the classic formals and checks still account for the largest turnovers. And this makes competition quite tough, especially when differentiation alone is not the keyword."

As against this, ColorPlus, Provogue, etc have focussed only on differentiated and innovative products, and are doing fairly well in that segment. "And this will lead to more mergers of the Bombay Dyeing-Proline kind. Raymond had tried to join hands with ColorPlus, but this did not go through. Such tie-ups give a lot of benefits to both the brands. For instance, in the case of Bombay Dyeing-Proline, the former will be able to benefit from the specialised products and designs from Proline, and Proline will have a larger distribution network of Bombay Dyeing. And this is what companies should focus on - their core strengths, and how best these can be made use of," state sources.

Even as consolidation can lead to brands joining hands, or moving into slightly lower price segments, or into newer areas such as ladies' wear, sportswear, moving out completely from the existing price segments into lower ones is being ruled out by the industry. "Brands have to create a ready-to-wear culture in the market, for which communication is important. And brands will find it very difficult to bring down prices significantly due to the advertising costs. Of course, some discount schemes are being offered to the consumers, but these don't really help in boosting sales in the long, or even in the medium term," state sources.

Price limitation is also the reason that would prevent brands from moving into smaller cities, as the ready-to-wear culture is almost non-existent there, and prices would have to be extremely low, which not many brands can offer, according to industry experts. As against this, Siyaram's Oxemberg began by targetting the smaller cities, and is now planning to move into the big cities, and will be venturing for the first time into the western region. "We have received overwhelming response from the Mumbai dealer community at the recently concluded National Garment Fair. In fact, Oxemberg received the largest number of visitors at its stall," informed Mr Arvind Poddar, managing director, Siyaram Silk Mills.

However, it is the smaller, regional brands that are benefitting from the market creation efforts of the big brands. "Low overheads help the small brands to keep prices low. And they are able to cater to a sizeable share of market, nt just in the big cities, but also in the smaller ones," say industry sources.