The $108 billion dollar Indian textile industry has transformed in several ways in the last three decades. Growing out of the clutches of middlemen mafia, today, the industry is led by technology, skilled staff and advanced machinery. Although the industry is expected to grow to double its size to $223 billion by 2021, one of the country’s largest exporters BeePee Group MD Anup Poddar thinks that textile manufacturing in India has no future. With big players and some international brands announcing price war in the industry, only those who update with time will survive the competition, he predicts. Excerpts from the chat with IndianRetailer.com
E-commerce has changed the way people buy textile, especially clothes. How is the industry surviving the blow?
The online industry has reversed the textile business and now the industry works in an upside down model. Earlier, maybe less than five years ago, people bought dress materials and got it stitched as per their needs. Now, with the advent of web portals, stitching dresses is becoming obsolete. Millennials don’t get their clothes stitched because it’s the age of readymade clothes and it’s cheaper than getting a dress stitched. Also, with stitching becoming more expensive, only the affluent aspire for it. E-commerce has made clothes affordable and accessible to all.
As a 120-year-old brand, how are you keeping with the trend?
You know, it's impossible for any brand to survive without getting upgraded. It is especially important for manufacturing units because there is no future for them. With big players entering the market, local manufacturers will be wiped out over the years. One example for all to see is that of Bombay Dying. In the bedspread segment, everyone knew just one name and it was mostly this brand. However, from a manufacturer the brand is now just a retailer. It is important to stay relevant. As for us, we have only catered to the high end segment and have not compromised on quality or price.
How is the current market for textile industries?
There has been massive transformation in the textile industry over the decades. In the last 20 years, the relationships in the industry changed, and a manufacturer and retailer are connected directly without the interference of middlemen. In the last five years, this trend further changed and now a manufacturer is in direct contact with the consumer. Thanks to technology, middlemen are now getting wiped out from the system. Another boon of technology is that there is better accessibility and visibility for a consumer and brand respectively.
But how is the price war by ecommerceaffecting the market?
There has been a huge compromise on the quality and ethics due to price war. Yes, a shirt is available at Rs 150 and a branded shirt for 10,000. But what is the durability of such low priced products? Consumers will end up spending more because the shelf life of such products is usually less. Hence, the volumes will go up. But the consumer will inevitably end up compromising on quality and spend more.
But there is market for both?
True, the disparity is large but there is equally market for both. With increasing incomes, even double income, the market has largely been divided and while one market is spending more, the other, has moved on to branded products and is on the higher end of the scale. The availability of both the products has also been considerably high since for price-sensitive customers the less price attracts and for higher income group, quality and durability matters. The market is large for both the segments.
What are your expansion plans?
Service industry will continue to thrive and it will be the future. In this regard, we have entered the laundry division and plan to add more products under this segment and our exports will continue to flourish.