Adapting to Thrive in a $190 Billion Market

30 January 2024, Mumbai

Winds of change 

The change is only constant & visibly sweeping through the Indian apparel retail market, a colossal force projected to reach $190 billion by 2025. 

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Optimistic Outlook: Retail real estate is staging a strong comeback

In 2023, approx. 7.25 Mn sq. ft. of new mall supply spanning 16 new malls will hit the market across the country - 67% area in Tier 1 cities, 33% in Tier 2 & 3 cities Tier 1 cities include Bangalore, Chennai, Gurgaon (NCR), Hyderabad, Mumbai & Pune while tier 2 & 3 cities include Bhopal, Cuttack, Jamshedpur, Kochi, Lucknow & Vizag.

Traditional giants, once undisputed kings, now face challenges from online upstarts, shifting preferences, and a rapidly evolving landscape.

The Online Surge: Brick-and-mortar stores must embrace omnichannel experiences, blurring the lines between physical and digital with click-and-collect, in-store kiosks, and personalized mobile apps.

Beyond Apparel: Retailers like Lifestyle are expanding into homeware, beauty, and kids' products, catering to diverse needs.

Private Label Power: In-house brands are shedding their "poor cousin" image, with players like Max Fashion and Westside investing heavily in quality, style, and value.

Sustainability Takes Center Stage: Eco-conscious consumers drive demand for organic materials, ethical sourcing, and upcycling initiatives.

Adapting Retail Giants:

• Shoppers Stop: Premium positioning with curated experiences, strong loyalty programs, and plans for expanded private labels and smaller stores in Tier II & III cities.
• Lifestyle: Mid-range and premium mix, expanding with personalized shopping and data-driven promotions.
• Max Fashion: Fastest-growing chain targeting budget-conscious consumers, planning for continued store openings, online integration, and venturing into athleisure and footwear.
• Reliance Retail: A market leader with diverse brands, plans include JioMart online integration, value-focused stores like Zudio, and hyperlocal sourcing.
• Westside: Fashion-forward focus with in-house brands, emphasizing experiential play and plans for online presence and expansion into smaller towns.
• Zudio: Trendy apparel at rock-bottom prices, rapidly expanding in Tier II and III markets, focused on maintaining low prices, expanding product ranges, and strengthening logistics.

Key Metrics for Success:

• Continued omnichannel integration
• Category expansion beyond apparel
• Targeted store formats for different segments
• Personalized shopping experiences
• Sustainability, ethical sourcing, and community engagement

The Future: What holds promise

Emerging paradigms—agileness, innovation, and a customer-centric approach—will define success. 

Weaving a compelling narrative of convenience, value, and personalization will be key to thriving in this ever-changing market. 

Only those who adapt, experiment, and stay ahead of the curve will reign supreme in India's vibrant fashion tapestry.

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