Why India Is the Next Fashion Frontier
Forever 21 --always on the cutting edge of fashion trends-- is a little behind the eight ball right now. Not because it hasn't stocked the hottest floor length skirts (it has). The LA-based fast fashion mega-chain just opened its first store in India, following the likes of Levi's, Diesel, and Ecko Unltd. Even Spain's apparel giant Inditex opened three Zara stores in Mumbai and New Delhi, drawing crowds of eager shoppers eager to snag the latest slick styles.
With Indian apparel sales in the billions of dollars and posting over a 10 percent increase in the last five years, it's a wonder more retailers aren't eagerly signing up to set up shop in the subcontinent. Especially in light of the fact that the Indian apparel segment offers higher margins -â€" despite the rising cost of raw materials and labor.
As American and European brands cast their lot in China, savvy business development managers will begin exploring opportunities in this rapidly growing country. As 11th biggest economy in the world, India is the second fastest, behind China.
Here's who should start making strategic partnerships with Indian retail management right now:
ck One -â€" Calvin Klein's new lifestyle brand is well positioned to take advantage of a big trend in the Indian market -- men's apparel. Bharat Book, an Indian research firm, projects the men's apparel industry increasing at a CAGR of 14.86 percent through the end of 2010, based on per capita GDP spending on apparel increasing 5.8 percent in 2006 from 4.9 percent in 2003. Their estimates indicate that branded apparel will do even better, increasing at a CAGR of 24 percent through the end of 2010. Bharat Book also found that guys were buying a lot of shirts, to the tune of nearly 40 percent of their total apparel spend.
ckOne's assortment of men's jeans, underwear and swimsuits at lower price points should appeal to India's more fashion-conscious young men that have more disposable income than ever. And it certainly helps that Calvin Klein and parent company Philips-Van Huesen (shirts!) have already paved the way establishing a presence in India. PVH plans to add 250 more stores to the 100 it already operates in the subcontinent and is aggressively brand building (think sponsor of men's fashion week held in association with the Fashion Design Council of India).
Victoria's Secret -- Indian women want trendy unmentionables as much as their American counterparts. At least, that's what Reportlinker.com's latest research shows. The company cites growing income levels and changing lifestyles for a major shift in consumers' spending habits. Translation: lingerie makes the leap from function to fashion, at least in the urban centers. Reportlinker says market grew from Rs. 780 crore (US$175.9 million) in 2003 to Rs. 1645 crore (US$370.3 million).
Victoria's Secret, owned by Limited Brands (LTD), could make a killing selling its sexy bras and panties, as well as its collections of soaps, lotions and makeup to the estimated 81 percent of the population that is under 45 (and considered the most fashion conscious according to The Associated Chambers of Commerce and Industry -- ASSOCHAM). But it could also be a smart move to save on shipping costs. Cheslind Textiles, a maker of cotton yarn that supplies to brands including Victoria's Secret is based in Bangalore.
Chico's -â€" Fashion for the umm, older trendster is not an oxymoron. Our friends at ASSOCHAM found that women between 41-50 are big shoppers (duh) and just ripe for the picking by the likes of Chico's (CHS). The company's been enjoying solid sales and comps in 2010, with the biggest growth coming from e-commerce at a handsome 36 percent increase over the second quarter last year.
Currently, Chico's selection of classic basics has expanded to offering more on-trend styles while still keeping eye toward age-appropriate. Marketing these collections to older Indian women who -- no doubt like every woman -- don't want to look like mutton dressed as lamb, should be simple. But Chico's doesn't have a presence outside the U.S. yet, so that may take a collaboration or licensing deal to bring to fruition.
Image via Wikimedia Commons cc 2.0, Levis.co.in
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