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India’s textile industry is counted amongst one of our oldest running sectors, that’s been successfully up and running for several centuries. 2020 was a tough year for the textile and apparel (T&A) sector – in India as well as globally.
Broadly categorized into apparel, technical textiles, and home textiles, India’s domestic T&A sector is expected to grow to $190 Bn between 2019-26, clocking a 10% CAGR as per Wazir Advisors. The Government of India’s production-linked incentive (PLI) scheme directed at boosting man-made fiber and technical textiles is slated to attract higher investments and improve exports earnings of the T&A space.
With exports to the tune of $36.4 Bn, Indian T&A is amongst the top 5 exporters of T&A globally. Further, the textile industry comprises 14% of industrial production, contributes 30% to exports and 4% to our GDP, besides being the 2nd largest livelihood provider, after agriculture.
6 Trends in Textile and Apparel Industry
Apparel going strong
Apparel commands a 73% lion’s share of India’s T&A market. Broadly apparel comprises multiple segments i.e. occasional wear, formals, denim, ethnic, kids, casual, lounge, and innerwear. The dominance of brands, demand for better quality, durability, and longevity of apparel, jump in online apparel purchase and e-commerce transactions, closing the gaps in the supply chain, and cost reduction from tech adoption would play a pivotal role in shaping the fortunes of the apparel industry.
Sizing up to the tech disruption
Infusion of technology in the value chain can help by reducing the time required and bringing in the added advantage of better quality with personalization. With tech-driven design tools, business entities would be able to offer customized apparel as per customer requirements within short delivery cycles.
Automation, namely AI and data analytics, would provide valuable insights on customer preferences and tastes that could be converted into manageable batch-sized, just in time production. This has the potential to usher in landmark change i.e. transform a mass-market approach to a niche premium branding of apparel. One such example is signature apparel or tailor-made apparel with the inclusion of digital graphics.
Customization with reduced timelines could also ensure better investor management and lower stock holding costs. Further, the induction of automated textile machinery has enabled remote production and helped maximize capacity utilization.
Positive reforms for India’s T&A space
Recognizing India’s strong growth potential in the T&A space, the Government of India has announced multiple export promotion reforms, aimed at boosting the sector’s revenue streams. 100% FDI has been allowed under the automatic route.
The PLI scheme valued at INR 10683 crore would play a positive role in further accelerating the T&A industry’s progress. It especially benefits textile manufacturers and incentivizes man-made fiber apparel, man-made fabrics, and ten categories in technical textiles.
India’s growing middle class with greater purchasing power and high consumption-demand is also fuelling the sector’s growth. Along with the emergence of home-grown popular D2C brands, multiple international brands are making a beeline to have a business presence in India. India’s T&A sector has also rapidly moved up the leaderboard from being a raw material source to a vibrant market for ready-to-wear apparel.
Apparel Rentals and Alternative ownership
Apparel as a product is being utilized in newer ways. Customers today are open to experimentation with refurbished, pre-owned, repaired, pre-washed, resale, 2nd sale, rented wear, try before you buy, etc thereby indirectly extending the lifespan of each piece of cloth.
As a variety of clothing with repetition gains popularity, customers are moving away from the hitherto ownership model to the ‘use and throw’ approach. Easy accessibility, affordability, and diverse choices to choose from are influencing customer decisions when it comes to clothing.
In fact, certain retail players and e-commerce companies are offering subscription-based rental plans along with an option of outright purchase. This is gaining traction, especially in certain high-value, premium apparel categories where certain customers prefer to use expensive clothing worn by celebrities for special occasions like marriages, etc.
Redefining Brand power
The young demographic customers i.e millennials and Gen Z are brand-conscious and expect their preferred apparel brands to share similar values – be it supporting sustainability, social impact projects, or environmental welfare.
To be successful, apparel companies need to factor in the ‘activist’ side of this ‘young’ customer segment, whose shopping habits are aligned to their beliefs and opinions on matters of public interest. To engage in meaningful ways with customer segments, apparel players need to communicate via social media so as to win brand equity and customer loyalty.
Omnichannel purchases are preferred by most
With evolving customer expectations, technology has emerged as an enabler of multi-delivery channels. Along with a physical brick and mortar presence, T&A manufacturers are opting for the digital route – e-commerce, e-shops, and the likes and offering a higher level of buying flexibility for customers.
Visual search, digital try before you buy, augmented reality and other cutting-edge tech tools have facilitated trying out a garment prior to purchase or payment only after customer satisfaction with a certain number of days as a trial period.
Continuous innovation to stay relevant
The T&A sector in India is in a constant state of flux, owing to changing industry scenarios, the emergence of brands, intense competition, evolving customer taste, technology-driven innovations, and policy reforms.
Along with constant innovation on the product offerings, textile players are increasingly offering customers the convenience of digital payments, ease of accessibility with anytime-anywhere shopping, higher engagement levels across digital platforms, and speed to transform the buying experience. This builds the trust factor and drives an emotional brand connect with customers.