Overview of Lingerie Market in India

Overview of the Indian Innerwear Industry

The overall innerwear market (excluding kids) in India was worth Rs. 1,191,300 lacs in CY 2009. It has grown at a Compounded Annual Growth Rate (CAGR) of 15.8 % over the last four years. The growth can be attributed to the rising disposable incomes, growing consumer class and advent of international brands in the Indian markets.

In volume terms, the men’s innerwear market constitutes 48 % of the total innerwear market in India. The share has remained range bound over the last four years. The women lingerie segment holds a 52 % share. In value terms, the women lingerie segment enjoys 66 % share of the total lingerie market. Larger value share and a smaller volume share depict higher Average Selling Price (ASP) as compared to the men’s innerwear market.

 In value terms the lingerie industry in India was worth Rs 7, 89,700 Lacs in CY2009. It has grown at a robust 16.8 % over the last four years (2006-09). The growth can be attributed to the rising disposable income and growing preference for lifestyle products. Over the last decade lingerie has grown from an optional part of the wardrobe to essential clothing for women. It constituted 5.1 % of the total Indian apparel market and 15.8 % of the overall women apparel market during 2009. In volume terms the lingerie industry grew at a rate of 9.4 % over the last four years. The lingerie sales grew from 4,980 Lacs pieces in 2006 to 6,520 Lacs pieces in 2009. In volume terms it constitutes 9.4 % of the overall apparel market and 31.9 % of the women apparel market.

The lingerie market grew at a faster pace in terms of value as compared to volumes during the 2006-2009 period. This signifies a jump in the average selling price which grew from ` 100 in 2006 to `121 in 2009. It grew at a Compounded Annual Growth Rate (CAGR) of 6.7 % during the same period.

The lingerie industry in India is characterized by a high degree of fragmentation with almost two-third of the market controlled by the unbranded and unorganized regional players and the balance one-third share goes to the few big organized and branded players. The advent of some international brands in the Indian market place has brought about some realignment in the fragmented lingerie market. The companies have started advertising boldly through advertisements, fashion shows etc., to catch up with the consumers to understand their preferences.

Segment-wise lingerie market - The lingerie market in India can be divided into five segments based on the price points at which they sell in the market. They are classified in super-premium, premium, mid-market and economy & low-market segment. Approximately, 75 % of the market share is held by the mid-market and economy segment, in both, value and volume terms. The super-premium and premium segments are relatively smaller but fast-growing segments. In volume terms, the economy segment accounts for the maximum share in the lingerie market. The volume-wise share of different segments has remained more or less stable over the last four years. All segments except the low market segment have grown in the volume terms over the last four years. The maximum growth in volume terms was experienced by the super-premium segment followed by the premium segment. This indicates the growing penetration level in these segments. The super-premium and premium segments grew at a CAGR of 18.9 and 16.6 % respectively. This can be attributed to the surge in international brands entering India, rising income levels, changing demographics, growing brand awareness and the willingness amongst the people to spend on lifestyle products. The key brands in the premium and super-premium category are Marks & Spencer, Triumph, Enamor, Lovable and La Senza. The key brands in the economy and mid-segment are Groversons, Body, Bodyline, Daisy Dee and Teenager.

In value terms, the mid-market segment is the largest followed by economy and super-premium and premium segments. Low market constitutes only 6.5 % of the total lingerie market. Approximately, 78 % of the market share is held by the mid-market and economy segments. This segment is majorly dominated by unbranded regional players. Therefore, there lies immense potential for the market participants to launch products in these categories to grab the market share and create a better brand recall.

The average selling price (ASP) of lingerie in India varies from Rs. 37 per piece to Rs.1, 029 per piece. The ASP of the super-premium segment has grown at the fastest pace followed by the premium segment. The ASP in the super- premium and premium segment grew at a CAGR of 14.5 % and 8.9 %, respectively, over the last four years. This kind of a growth can be attributed to the entry of global brands in India, rising percentage of organised retail and the rising brand consciousness amongst the consumers. The growth in the ASP of the lower segment remained at a meager 2.9 %. This indicates that the lower segment is a price-sensitive market. The ASP in the mid-market and economy segment grew at 5.2 % and 4 % respectively.

The brand loyalty factor is the highest amongst the premium and super-premium categories. It decreases as we move down the ladder. According to Images Business of Fashion Magazine, October 2009 issue, Lovable is amongst the top three preferred brands in women’s innerwear in India.

The lingerie industry in India is expected to grow at a CAGR of 18.3 % over the period 2009-2014. It is currently estimated at Rs. 7,89,800 Lacs and is expected to be worth Rs. 18,32,460 Lacs in 2014. This growth would be led by the super-premium, premium and mid-market segment.

The super-premium and premium segment contributed 15.8 % to the total lingerie market in 2009. This share is expected to grow to approximately 28 % by 2014. This can primarily be attributed to the advent of international brands in India, growing brand awareness and brand loyalty amongst the Indian consumer. Mid-market segment is the largest segment of the lingerie market and is expected to remain the largest over the next five years. It currently contributes 43 % (2009) to the total lingerie market. This share is expected to increase to 46.3 % in 2014. This segment is expected to grow at a CAGR of approximately 20 % over the next five years. The growth in this segment can be attributed to the growing urbanization and increasing number of working women. On the other hand, the economy and low segments are expected to grow at a pace slower than the overall lingerie market, thereby, losing its share in the overall pie.

The key factors influencing the choice of the consumers are comfort, price, brand and durability. Comfort plays a key role in the choice of the consumers followed by price and brand name.

Consumer Preferences Size is the most crucial component in the lingerie market. The best selling size is 90 cm followed by 85 cm. In brassieres type, regular full cup are more in demand, followed by the seamless and strapless bra categories. Colour- wise, white seems to be in more demand followed by pink, black and peach. When it comes to fabric, sales are led by cotton brassieres followed by cotton lace and cotton Lycra.

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Overview of Men’s apparel Category in India

Overview of Men’s apparel Category in India

The domestic Indian apparel market can be divided into three segments, Men’s apparel; Women’s apparel; and Kids' apparel (including uniforms).

Men’s apparel is the largest segment of the domestic Indian apparel market, with a 41.5% market share. The level of penetration of organized manufacturers and brands is the most in this segment of the market. The size of the men's apparel segment is expected to grow at a rate of 6.8% from 2010 to 2015, and will continue to enjoy the largest share in the domestic apparel market.

At the wholesale level,  Research expects, the domestic apparel market to grow from Rs. 1,250 billion in 2009 to Rs. 1,800 billion in 2015, a CAGR of 7.6%. Men’s apparel, the largest segment, is expected to grow at a CAGR of 6.8%, from Rs. 519 billion in 2010 to Rs. 720 billion in 2015.

At the retail level, the growth rates are expected to be much higher at 14% – 15% per annum. According to  Research, retail purchase of apparel is expected to double from Rs. 2,000 billion in 2010 to approximately Rs. 4,000 billion by 2015, a CAGR of approximately 15%. Retail spending on women’s wear is expected to grow at higher rate.

Menswear

According to  Research, men’s apparel is the largest segment in the Indian apparel market.  Research estimates the market size at Rs. 519 billion in 2010 and it is expected to grow at a CAGR of 6.8% to Rs. 720 billion in 2015. The level of penetration of organized manufacturers and brands is the most in this segment of the domestic apparel market. Shirts, trousers and suits contribute almost 71.2% to the domestic apparel market and these segments are expected to maintain their market share in the future. The T-shirts market is expected to experience the highest growth over the next 5 years. Other men’s garments include casual and leather jackets, nightwear, woolens and dhotis/lungis. Brand loyalty factor is high amongst the menswear segment, especially in the premium and super premium segment.

Men’s shirts

 Research valued the market in men’s shirts at Rs. 191 billion in 2010. Men’s shirts, as a single product category, commands the largest market share (36.8%) in the menswear segment with the greatest number of manufacturers and brands competing in the market. This market is expected to grow at a CAGR of 6.4% over the next five years, and is projected to be worth Rs. 261 billion in 2015. The growth in this product category at the retail level is expected to be at a CAGR of 13% from Rs. 420 billion in 2010 to Rs. 770 billion in 2015. Growth can be attributed to the increased penetration of ready-to-wear shirts in the market place, especially in the rural markets, rising income levels and the easy availability of ready-to-wear shirts in various colors, sizes and patterns at malls and local garment retailers.

The market for men’s shirts can be divided into various categories by price point. Rising income levels, increasing eagerness to buy and the popularization of formal wear at the workplace is driving growth in the super premium, premium and medium shirts category. The highest growth is expected in the super premium category, followed by the premium category. This can also be attributed to the introduction of more domestic and international brands in these categories.

Men’s Trousers

The trousers category is the second largest category in men’s apparel, accounting for 25.7% of the menswear apparel market. The trousers market is expected to grow at a CAGR of 7.1% from Rs. 133 billion in 2010 to Rs. 188 billion in 2015. At present, retail penetration in the men’s trousers category is not as high as for men’s shirts. However, this is changing, with a growing preference for ready-to-wear trousers on the demand side and the availability of ready-to-wear trousers in various brands, sizes, colors, designs and fabrics on supply side. Growth in this product category at the retail level is expected to be at a CAGR of 14% from Rs. 319 billion in 2010 to Rs. 633 billion in 2015.

The low priced trouser segment (below Rs. 300) contributed 50% of total trouser sales in 2009. The share of low priced trousers is expected to fall to 45% in 2014 due to an increase in per capita disposable income, enabling buyers to graduate to higher price point categories. The greatest growth has been observed in the premium and super premium categories during the period from 2006 to 2009. These two categories collectively accounted for a 23.9% share in 2009. This share is expected to grow to 28% in 2014. The products in this segment mainly sell through organized retail especially exclusive brand outlets (Raymonds, Reid & Taylor, Cottons) and multi brand outlets (Shoppers Stop, Pantaloons, Lifestyle). Growth in these categories will primarily be driven by the easy availability of luxury brands, rising levels of brand consciousness and formal wear culture at the workplace.

Men’s Formal Suits

The current market size of the formal suits, jackets and blazers segment is estimated at Rs. 45 billion. This segment is expected to grow at a CAGR of 7% over the next five years, with a projected worth of Rs. 63 billion in 2015. This growth can be attributed to the rapid shift from tailored to ready-to-wear suits, rising disposable income, the growing service sector and the influence of multinational corporations. Growth in this product category at the retail level is expected to be at a CAGR of 14% from Rs. 319 billion in 2010 to Rs. 633 billion in 2015.

Lowest price suits contributed 82% to total suit sales in 2009 in value terms. This segment is expected to shrink over the years as more people graduate to the relatively costlier economy and medium segments. The premium segment is expected to see a growth in its share from 4.8% in 2009 to 6% in 2014. The increase in this category can be attributed to the increasing preference of executives to wear formal attire at office meetings. The premium and super premium category is expected to grow from a 10.5% market share in 2009 to 11.2% in 2014. This would primarily be driven by an increasing number of foreign brands entering into India, rising income levels, increases in the size of the working population and rising brand consciousness amongst the Indian youth. According to  Research estimates, Reid & Taylor holds a market share of 7.5% in the premium suiting segment.

Worsted Fabrics

Worsted fabric is a blended form of fabric in which one of the components is wool. The wool can be blended with both, man-made or cotton fiber to form a worsted fabric.

According to  Research estimates based on industry interactions, 45 million meters of worsted fabric were produced in 2009. There have been minimal additions over the past five years. The industry is expected to produce 52 million meters of worsted fabric in 2014. This projected growth can be attributed to the rising income levels, reductions in the price gap with competing fabrics and increasing preference for wool blended fabric among Indian consumers due to its grace and style. The average price for worsted fabric is approximately Rs.450 per meter and it operates primarily in the premium, super premium and luxury segment. The industry has a total installed capacity of 0.604 million spindles as of 2009. Major players in the worsted fabric business are Raymond, Reid and Taylor, Digjam, Dinesh, OCM and Vimal. Though Raymond is the market leader in the worsted fabric business, Reid and Taylor has managed to increase its market share over the last few years.

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Overview of Apparel and Textile Industry -2010

In 2009, world apparel production stood at US$140 billion, with 71% of production accounted for by Asian countries. The developed nations/regions such as US and European Union (“EU”) accounted for 11% and 14% of global production respectively. Being a matured industry, growth rate of the Global Textile and Apparel industry is in sync with the growth rate in global GDP. Of the total apparel retail market valued at approximately US$500 billion in 2009, the developed nations/regions like US and EU accounted for 33% and 30% respectively.

The Indian textile and apparel industry is estimated to be worth Rs. 2,700 billion in fiscal year 2010. It has been estimated on the basis of industry interactions. Approximately 65% of the total textile and apparel production (wholesale price level) is consumed domestically. India’s domestic textiles and apparel consumption is estimated at Rs. 1,750 billion (wholesale price level), of which apparels account for approximately 71%. India exported US$20 billion worth of textiles and apparel of which 45% are apparel exports.

The textile and apparel industry is one of the largest and the most important sectors in the Indian economy in terms of output, foreign exchange earnings and employment. It contributes approximately 14% to India‟s industrial production, 4% to the country‟s GDP and 17% to the country’s export earnings. It provides direct employment to over 35 million people and is the second largest provider of employment after the agricultural sector. Thus the development of this sector has an overall impact on the economy. The Indian textile and apparel industry contributes approximately 4% to the global textile and apparel market. Since the textile industry has such economic importance, it has always attracted the Government’s attention. Therefore, the Government has introduced policies such as the Technology Upgradation Fund Scheme (“TUFS”), Scheme for Integrated Textile Parks (“SITP”), low excise duty, high import duty (to discourage imports) and National Textile Policy to develop the textile sector.

Indian Apparel Industry

Estimates say (based on industry interactions) that the Indian apparel market grew at a CAGR of 6.5% from Rs. 1,225 billion in fiscal year 2005 to Rs. 1,675 billion in fiscal year 2010 (wholesale level). The Indian apparel market comprises domestic apparel consumption and exports. The domestic market is estimated to be worth Rs. 1,250 billion in fiscal year 2010 (at wholesale level). Spending on domestic retail apparel has grown at a high rate of approximately 13–14%. The apparel market size at the retail level is estimated at Rs. 2,000 billion in fiscal year 2010. The retail purchases on apparels is expected to double to approximately Rs. 4,000 billion by fiscal year 2015, a CAGR of approximately 15%. Factors expected to contribute to the growth of the Indian apparel industry include:

Ø Rising levels of disposable income;

Ø Growing preference for ready-to-wear apparels;

Ø Increasing penetration of organised retail;

Ø Changing consumer habits;

Ø Increasing trend towards urbanization; and

Ø A comparatively younger populace.

Source: sebi.gov.in