Branded shirts are everywhere and for everyone. In a country where traditionally customers preferred buying fabric over the counter and then getting the same tailored, this is a paradigm shift. And the preference for fabric over garments has not always been about the money. “You won’t get the right fit”, “These brands are tailored for western bodies”, “There is greater variety in fabric”… have been reasons given to opt for fabric rather than readymade garments.
But all this is changing. Branded shirts are growing and growing rapidly. The apparel industry is growing at a robust 15%. Brands such as Van Heusen have grown by as much as 60% in 2011. Shirts of varying sizes, styles and fits are now available everywhere. The market is not limited to metros anymore. Brands have penetrated tier I/II cities as well. Specific Mass Brands such as Liverpool (Gandhinagar, Ahmedabad), Cotton County cater to these areas. Increasing number of channels such as malls penetrating these cities has helped make this change faster.
How do these brands work? How do they differentiate from each other? How are they segmented?
Most brands purchase fabric directly from vendors. The fabric is sourced either to garment factories owned by the brand or to garment manufacturers/vendors. Sale is generally via dealers and/or directly to their customers via franchisees/fully owned retail outlets. They don’t risk inventory. Most operate on a “Sell before Make” model. Have trade shows, call all major dealers, get yardages of potential season designs made and take bookings before fabric orders are issued. Any extra fabric manufactured is generally sold off through their own outlets.
Brands typically operate with two lines “Autumn Winter” and “Spring Summer”. The former is a collection of dark dull-colored shirts while the latter is a range of bright lighter colors. This is generally followed by an End of Season Sale. The End of Season Sale is often a separate line made by compromising on the quality of the fabric and hence the price.
A close look at the market reveals a clear segmentation of brands. Peter England, John Player (ITC) are positioned as mass brands whereas Van Heusen, Allen Solly are positioned in the premium segments. Brands differ in the product offering. While Peter England and John Player play with polyester and cotton fibers, Van Heusen, Zodiac and Allen Solly dabble in fine expensive cotton yarns. Touch a Zodiac shirt and then a Peter England shirt. The difference in softness in the shirt is evident.
While brands are growing rapidly, the industry is facing its share of problems. Prices of cotton yarn have soared. A commonly used “40S” cotton yarn which was available in 2010 at INR 140-150 per kg is now available in 2011 at INR 290-300 per kg. Labor is increasingly short and becoming very expensive. Daily wage demands have soared from INR 175-200 to INR 250-300 per day. The budget had another shock for them. Garments now have an excise duty levy on them affecting the MRP by about 6-7%.
Have these problems changed targets for these brands? Probably not. With income levels in India increasing and an aspiring middle class, the Indian customer increasingly wants “brands”. The need is bound to grow and so is the market. So, which brand do you wear ?