As fast fashion brands expand and online shopping gains momentum, the branded garments segment will grow to 48 per cent of the overall readymade garments segment in 2019, from 35 per cent in 2014, said a report from Edelweiss Broking Ltd.
However, the pace of growth is expected to be moderate—from a compound annual growth rate (CAGR) of 15 per cent between 2009 and 2014 to 10-12 per cent between 2014 and 2019, said the report. The moderation in growth will be seen across menswear and womenswear, it added.
The men’s apparel segment clocked an annual growth rate of 10 per cent over 2010-2015 and is estimated to post 8 per cent by 2020, growing from $13 billion currently to $19 billion. The women’s apparel segment, which clocked a 9.5 per cent CAGR over 2010-2015, is expected to post an 8.5 per cent CAGR by 2020. The readymade garments market is estimated at $45 billion, of which the domestic market is around $27 billion, while exports stand at $18 billion.
The Indian branded apparel industry is estimated to be $10 billion in size and growing at 10-12 per cent per annum, said the report. Between 2010-2011 and 2015-16, modern retail’s share has increased from 7 per cent to 16 per cent and this is set to grow to 37 per cent of the overall retail trade by 2021. Even the online retailing market is expected to grow to $44 billion by 2018 from $13 billion in 2014, with apparel being one of the biggest beneficiaries, accounting for 31 per cent of online retail.
In the branded apparel segment, Madura Fashion and Lifestyle, a unit of Aditya Birla Group company Aditya Birla Nuvo Ltd, is the largest company, accounting for 40 per cent of the revenue pool and 45 per cent of the operating profit pool for 2014-15.
Arvind Ltd. - the retail unit Arvind Lifestyle Brands Ltd is in second place with 23 per cent of the revenue pool share and 19 per cent of the operating profit pool. Interestingly in India, womenswear constitutes only 41 per cent of the market versus 48 per cent share of menswear.
Globally, womenswear is a bigger market than menswear. Also, the womenswear segment is highly fragmented with only 5 per cent share going to organised retail. However, in the coming years this is set to change. In segments like fast fashion, brands like Zara, Westside and Max Retail are focusing on womenswear.
The fast fashion segment is the largest in the Indian apparel market with 25 per cent market share. To be sure retailers are also now focusing on womenswear for growth. For instance, Allen Solly, which started as a menswear brand in 1993, subsequently got into womenswear.
“Womenswear now accounts for 15 per cent of our revenues and is one of the fastest growing segments along with kidswear,” said Sooraj Bhat, chief operating officer, Allen Solly who expects the contribution from womenswear to increase to 20-25 per cent in the next few years.