11 May 2022
Indian apparel retail market is expected to reach US $ 88.48 billion by the end of 2022
Organised Indian apparel retail has emerged as one of the fastest growing markets globally in the past few years. The menacing wrath of the pandemic did impact the industry in 2020, but despite all the pandemic-induced constraints, the industry seems to be coming back with a vengeance – at least that’s what the numbers state.
In a latest business survey conducted by Retailers Association of India (RAI), the overall retail business has grown by 10 per cent in February 2022 compared to what it was in the same month a year ago. Apparels, in particular, are showing double digit growth recently after the end of the Omicron phase.
So, it’s been a decent start to the year for the apparel retail market. And it’s not just from RAI! If reports by Statista are anything to go by, then the Indian apparel retail market is expected to reach US $ 88.48 billion by the end of 2022 and a whopping US $ 106.93 billion by 2026.
And if at all India manages to attain the projected US $ 88.48 billion by the end of this year, then it will help the country become the third largest apparel retail market globally – just behind the US and China, which are expected to generate US $ 335.10 billion and US $ 318.97 billion, respectively, in 2022.
What’s, however, noteworthy is to ascertain and analyse the factors that have been instrumental in the growth of Indian apparel retail market and how the scenario will be in 2022 and beyond.
With vaccination drive picking up significant pace all through the year, and schools and offices opening in many parts of the country, one saw a rise in both consumer confidence and consumer exuberance. It was this confidence and enthusiasm that drove people to the apparel/footwear store in the city and buy the item of their choice.
With vaccination drive picking up significantly, 2021 saw a rise in consumer confidence and consumer exuberance
One of the most notable developments over the last 15 months has been the successful acquisition of many small brands/retailers by big retail giants. In March 2022, India’s retail giant Reliance Retail Ventures (RRV) bought a majority stake in Clovia, a popular lingerie brand, for US $ 125 million or Rs. 950 crore (owned by Purple Panda Fashions). And it’s not the only one! RRV had earlier announced an investment in 30-year-old designer brand Abraham & Thakore (A&T) for a majority stake.
Earlier this year, we saw Aditya Birla Fashion and Retail (ABFRL) too buy 51 per cent stake in House of Masaba Lifestyle for around Rs. 90 crore to enhance its portfolio of fashion labels. This is in addition to its investments in Sabyasachi and Tarun Tahiliani. RRV and ABFRL have today left a mark on the global front too.
The apparel retail growth has also been attributed to several factors such as product development process, tracking and studying consumer and shopping behaviour or revamping the supply chain and adopting new technologies.
Many apparel retailers also invested significantly in building their marketing teams (both online and offline) so as to be ready with all plans to combat the uncertainties.
One cannot overlook the fact that most of the shoppers still want to see, touch, feel and experience the products they buy, especially in case of apparels, footwear and fashion items. Notably, vibrant, interactive digital signage has heightened in-store marketing and customer experience.
Fabindia, which has made significant tech investments for the digital platform, and successfully executed them too, has increased its store numbers to 308 across India and now plans to unveil 30 more stores in 2022.
Then there’s The Raymond Group, majorly known for its textiles and apparels, which has been proactive and, along with its brands, has been marking its presence by opening bricks-and-mortar stores in Tier-4 and Tier-5 cities as well.
Indian e-commerce has completely transformed the way business is done in India especially in last decade and in last 24 months, it’s been exemplary. As per India Brand Equity Foundation (IBEF), India’s e-commerce is expected to reach US $ 99 billion by 2024, with fashion/apparel likely to be key growth drivers.
As per Technopak report, by 2025 close to 20% of all apparels sold in India will be sold online
While US e-commerce bigwig Amazon has established itself strongly in India over the last few years, the notable aspect has been the rapid emergence of online stalwarts like Myntra, Flipkart, IndiaMart and Snapdeal. Amazon, notably, saw 40 per cent growth in its fashion category in FY ’21, while Snapdeal’s fashion sales rose by 210 per cent in the first six months of last year.