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Home textiles sector invests around Rs 2000 cr

Good export potential, but weak marketing could undo industry’s efforts, say experts

The Indian home textile manufacturers are investing in expansions, modernisation and vertical integration to capture a sizeable share of the global home textiles market, post-2004. However, marketing is still a weak link, feel industry experts. Reena Mital reports.

The Indian home textile manufacturers are investing heavily in expansions, modernisation, backward integration, product and design development in a bid to cater to the increasing global demand for home textiles. Investments made over the last one year, and in the pipeline, in the organised towelling sector alone are to the tune of Rs 1200-1500 crore, while in other home textile products another Rs 600-700 crore. Exporters expect exports to grow by at least 20-25 per cent in the next two years, even as China is considered a major competitor. According to leading home textile exporters, “China will be the first place for buyers to shop, and India will come in second.”

However, industry experts point out that while the sector is working towards expanding capacity, modernising, improving design inputs, there is not much effort on the marketing front. Says Mr Ajay Arora, managing director, Decitex Decor, “The motivation for aggressive marketing is missing in the industry. It should have worked the other way round - marketing driving production.”

According to Mr K K Lalpuria of Kay Kay and Associates, a consultancy firm, “There aren’t many companies that provide for investment in marketing. This is still looked upon as an expense. Proactive marketing is very much missing in this sector. Investment in EDI, distribution network, design studios, design and development work, participation in fairs is too small, and is normally restricted, even as these tools can help in improving efficiency, production capability and relationships with the buyers. Marketing in the textile industry is reactive and not proactive.”

The few companies that have invested in marketing are reaping good results, he added. “For instance, Welspun developed proactive marketing and has been successful, so also Trident, and some others.”

Welspun, looking at the huge potential of the US market, which is its largest market for towels, is planning to set up an office in the US as also a distribution centre, to be closer to the US buyers to provide quick and efficient service. “We are planning an office in New York with 8-10 employees with marketing as the main function. A distribution centre in North Carolina with 10-11 employees will facilitate very quick distribution in the US market, while providing a contact point for the US buyers. We have also begun manufacturing of sheeting, with an initial capacity of 6 million sets per annum. Here, we will be in direct contact with the retailer for marketing of the sets, and not through importers,” informed Mr Anurag Sharma of Welspun Industries. He further stated that almost 60-75 per cent of the sheeting capacity has been tied up by the US buyers.

Decitex Decor is also looking at sprucing up its marketing efforts. “There will definitely be a change in the way we market home textiles in the international market. Over the next four years, middlemen will almost disappear from the scene. Even if we don’t market directly to the retailer, there could be changes like retailers tying up with furniture manufacturers, especially in case of upholstery. In that case, we will need to supply kits to the furniture manufacturer, as per their specifications. We are ready for these changes, but haven’t yet started doing this, as our current customers are still active in the US market, and meaningful for the company.”

Says Mr Anish Doshi, managing director, Textrade, “Marketing, and relationship building becomes even more important today when buyers are free to go to any manufacturing country, and there are so many manufacturing centres coming up globally. Eastern Europe is emerging as a good sourcing centre for Europe, and a lot of investments are taking place here. For the US too, Eastern Europe is definitely an alternatively to Asia. And within Asia, China and Pakistan can pose stiff competition for India.”

Concurs Mr Arora, “While China and Pakistan are important players in home textiles, Turkey will be important too. Turkey set up global capacities early in the race. India in fact, is getting up very late. While investments in towels and sheetings have been significant this year, in furnishing fabrics India lags behind, and does not rank among the top five suppliers to the US market. In this particular segment, the US manufacturers still dominate the market, followed by China, Italy, Turkey and then India. And even at this fifth position, India’s exports of US$ 150 million is very meagre when compared to US imports of around US$ 1.5 billion per annum.”

According to some exporters, if the home textile manufacturers are making the right kind of investments in weaving and processing, design development, finishes, etc, and still finding the going difficult, it is marketing that then needs to be worked upon.