India’s youth-oriented affordable fashion brand, Styched Fashion, has launched operations in the UAE. The affordable fashion brand, which boasts of a unique Zero wastage and Zero inventory model, aims to be the one-stop value fashion shopping destination for online shoppers in the Middle East.

Styched’s owner Sensedynamic Fashions has set up manufacturing units, warehouse and shipping hubs in Sharjah and Dubai, and plans to expand vendor network of fabric manufacturers, tailors and apparel designers across UAE. The company will cater to customers across the Middle East and North Africa.

Launched in India in February 2019, Styched has grown multi-fold in the last couple of years. From T-shirts and joggers, the company now has more than 25 categories ranging from top wear, bottom wear, atleisure, footwear, ethnic, etc. Headquartered in Bengaluru, the company’s manufacturing value has scaled to $8 million with two rounds of funding so far.

The silk industry presents India with an untapped opportunity to rule the global luxury market. Yet, India currently produces only 28,000 tons of mulberry silk against China which produces170,000 tons. As per a Live Mint report, India has an established tradition of silk traditions. Its favorable climatic conditions and adequate labor force also give it natural advantage over other countries. Yet, for decades it has been threatened by rising silk imports from China. To counter this threat, India also levied 33 per cent tax on Chinese silk though this duty has recently been lowered to 5 per cent.

Indian weavers deterred by China’s price manipulation

This makes the entry of Chinese silk yarn into India easier, threatening the domestic industry. It also enables China to manipulate global silk prices threatening the livelihoods of hundreds and thousands of small organized power loom silk weavers in Bengaluru. Once famous for their flawless silk chiffons, and plain taffetas, these weavers have been made redundant by the aggressive pricing strategies adopted by Chinese mills.

Yet, India’s consumption of Chinese silk continues to increase as weavers use these fabrics as a base for embroidery and printing. Chinese silk is known for its superior performance on mechanized looks. Though Indian scientists have made several attempts to make similar kind of silk, they have failed to substitute Chinese silk yarn completely.

Low prices draw Indian weavers to Chinese silk

Though earlier, the Indian handloom sector had refused to use Chinese silk. In recent times, it has given in to growing demand for the fabric, wiping out remaining market for Indian silk. Textiles clusters across India from Varanasi to Chanderi, Phulia to Pochampally, have switched to Chinese silk.

Low price of Chinese silk yarn has also attracted India’s handloom producers who have switched to this yarn. This could prove to be a cause of concern for the Indian government and have a long-term impact on the country’s economy. On the other hand, higher costs of domestic raw materials may completely wipeout India’s handloom silk industry, making way for cheap power loom substitutes from China.

India’s most reputed credit ratings agency, India Ratings and Research (Ind-Ra) has revised its FY22 outlook for the textile sector from negative to improving. The rating agency had earlier downgraded its outlook primarily focusing on the spinning, fabric and garments sub segments, while home textiles and export-oriented garments remained less affected.

Sustained exports, stronger balance sheet and liquidity will help the sector maintain stability in FY22. Though it may face few supply chain disruptions due to local lockdowns at key textile hubs including Tirupur, Ludhiana, Surat and Bhilwara, exports will remain stronger. Most cotton textile players will have sufficient stocks.

Garment and home textile exports to remain resilient

Restricted movement of goods due to recurrent lockdowns has not only created a shortage of yarns and fabrics in the country but also impacted labor availability. This may lead to 20-30 per cent Y-o-Y topline decline in Q1 FY22, says Ind-Ra. However, garment and home textile exports will remain resilient. Most shipments in Q1will be deferred to Q2. The sector may face challenges in availability of containers and shipping costs.

From 2HFY22, demand will start recovering across sectors. Growth rate will remain favorable due to low-base effect. Exports will benefit with orders diversifying from China. Profit margins will start expanding with prices increases across upstream, midstream and downstream segments.

Schemes to manage liquidity issues

Since last two years, textile investments in India have been subdued due to uncertainty over export and production-linked incentives. However, the debt moratorium and credit guarantee schemes will help the sector manage liquidity issues and face the second COVID wave with more confidence.

Ind-Ra hopes to treat the impending third wave’s impact on export and domestic demand, oil prices, foreign currency rates as independent events and not as base case expectations. The agency has also revised the credit rating outlook for the sector from Negative to Stable for FY22

COVID-19 led lockdowns affected several Indian retailers. However, it affected fashion retailers the most as demand for formal and occasion wear slumped. And as per a Outlook Money write up, fashion retailers closed the 2020-21 with a 40-45 per cent decline in revenues. Summer sales shrunk to their lowest while there was a three times surge in online fashion sales.

Currently selling only essential items, retailers are struggling to adapt this changing situation. To survive the crisis, they need to reshape their businesses to focus on digital acceleration, discounting, industry consolidation, and corporate innovation. They need to future-proof their operations as the possibility of future outbreaks and lockdowns continues to loom.

Scale up digital capabilities

Another strategy fashion retailers need to adopt is to accelerate recovery plans with renewed vigor. They need to adapt to changing business models and make bold decisions to stabilize their core business before seeking new opportunities. The pandemic has plunged consumers into a deeper financial crisis. They now seek more discounts from retailers. Keeping larger business interests in views, brands need to find new ways to satisfy consumers’ needs. They need to scale up digital capabilities and leverage new technologies like virtual fashion shows, digital showrooms, sample sign-offs in sourcing offices, livestream commerce, and 3D design tools, to expand their businesses.

Hybrid sales model

Often, digital sales of fashion brands tend to be lesser than store sales. To balance this, retailers need to adopt hybrid sales model that leverages both physical and digital channels. They need to identify the financial, diversification and acquisition opportunities offered by these channels besides opportunities to acquire new partners and stabilize businesses.

Companies also need to introduce new tools and strategies across the value chain to safeguard operations against the damaging effects of pandemic. They need to use these tools to make long lasting changes in their business operations. Social media can also enable fashion brands to interact with their consumers. They can create meaningful shopping experience through product ratings and reviews on social media channels.

Create a sustainable product portfolio

To re-instill shoppers’ confidence, retailers and brands need to reorganize products and stores prioritizing customers’ needs. They need to use new technologies to provide shoppers with product information before they visit. They need to adopt an omni-channel approach to strengthen their connection with consumers.

With health and safety becoming new priorities for consumers, retailers need to emphasize on creating a more sustainable, ethical, and socially conscious portfolio. They also need to leverage creative advertisements to promote safe and sustainable shopping practices amongst consumers.

Aditya Birla Fashion and Retail (ABFRL) has appointed Arun Adhikari as Independent (Additional) Director on the Board of the company.

As per reports, Adhikari started his career as a management trainee with Hindustan Unilever in 1977 and was with Unilever through his full career. From 1977 to 2000 he worked in a series of increasingly senior roles across Sales, Marketing and Consumer Research in India. He also worked for two years in London at the Unilever Head Office in the Corporate Strategy group.

In 2000, Adhikari became Executive Director for Personal Care in HUL and joined the Management Committee of Hindustan Unilever. In 2004, he was appointed Managing Director for Home and Personal Care and joined the Board of Hindustan Unilever.

As a HUL Director was involved in external relationships with Government and media, investor relations, risk management, and corporate governance.

From 2000-2006 Arun was on the Executive or Governing Bodies of several industry, trade and professional associations in india including the Market Research Society of India, Indian Soaps and Toiletries Manufacturers Association, Indian Society of Advertisers and the Advertising Standards Council of India.

Arun was appointed Chairman, Unilever Japan KK in 2006 and was based in Tokyo for three years.

Adhikari retired from Unilever in January 2014 and then moved from Singapore to Mumbai. He worked with McKinsey & Company in India as Senior Advisor from May 2014 for 4 years, supporting the consumer practice and working extensively with McKinsey clients across Consumer and non-Consumer businesses on marketing and sales strategy related areas.

He is currently an Independent Director on the Boards of UltraTech Cement, Aditya Birla Capital,Aditya Birla Sunlife Insurance Co, Voltas and Vodafone Idea.

Rishi Vasudev, ex-CEO, Flipkart Fashion is launching a new Thrasio-style venture, which will acquire lifestyle brands and help them build and grow online. Known as Goat Brands Labs, the new venture will attract $20 million funds from Tiger Global. Venture capital firm Mayfield Fund and Flipkart's venture funds will also support the new venture that currently focuses on lifestyle brands only.

India’s largest Thrasio-style investment venture is being launched by Firstcry. The kid’s wear e-tailer will launch this venture with $75 million investment from Japan’s SoftBank Group Corp, TPG Capital, ChrysCapital and Premji Invest, Ananth Naryan, Former CEO, Myntra also plans to launch his venture in the same space and is finalizing a fundraise. Accel, Falcon Edge and Norwest Venture Partners have committed $25 million to the venture.

Apparel retailers in India are adopting new strategies to control dwindling store footfalls. Brands like United Colors of Benetton, Cantabil and Walkaroo are taking the D2C route and launching their own e-commerce platforms while others like Spykar, FabAlley etc, are launching promotional campaigns to sell their stock.

Discounts and D2C channels

As per a Money Control report, some retailers have also resorted to discounts on their e-commerce websites. FabAlley and Indya have adopted an aggressive pricing strategy to attract consumers, says Shivani Poddar, Co-Founder while multi-brand outlets Shoppers Stop and Pantaloons are offering 50-70 per cent discounts on their websites.

Spykar is selling old inventory at discounted rates while Vijay Sales has introduced partial booking wherein consumers need to pay only 10 per cent of the product price on booking and pay the remaining amount on receipt of product. This helps the company liquidate unsold stock, says Nilesh Gupta, Director, Vijay Sales.

Another way brands can connect with consumers is through Direct to Consumer (D2C) channels. Footwear brand Walkroo launched own e-commerce website while Benetton and Cantabil plan to follow suit in coming months. Cantabil also plans its increase warehousing strength to boost e-commerce sales, informs Shivendra Nigam, CFO.

D2C platforms enable companies connect with buyers and offer good shopping experience, adds Amarjeet Singh, Partner, Tax Regulatory and Internet Business, KPMG India.

An uncertain future

Fresh lockdowns in states including Delhi, Maharashtra, Jharkhand Chhattisgarh, Karnataka, Tamil Nadu have hit fashion retailers badly as they have been unable to reopen stores in these locations. In states where restrictions are minimal, retailers are seeing a drastic fall in footfalls. Spykar Lifestyle has not been able to open a single of its 193 offline stores due to recurring lockdowns, rues Sanjay Vakharia, CEO.

FabAlley and Indya have also not been able to open 95 per cent of stores. Cantabil was able to reopen only 12 of 300 stores across the country. Some retailers are also not able to sell goods through e-commerce channels due to changing delivery guidelines. The future of Indian retail thus seems to hang in a balance for now.

Flipkart plans to expand and improve its logistics and data storage capabilities. The e-commerce company has entered into a commercial partnership with multinational conglomerate Adani Group to achieve this goal. The e-commerce company and its payment app PhonePe both showed continued and strong growth in the first quarter of the 2022 financial year and contributed to parent company Walmart International’s overall growth.

Headquarted in Bengaluru, and incorporated in Singapore as a private limited company, Flipkart has a dominant position in apparel segment, bolstered by its acquisition of Myntra. In August 2018, US-based retail chain Walmart acquired 77 per cent controlling stake in Flipkart for $16 billion, valuing Flipkart at around $20 billion. In Q1FY22, Walmart reported a 5.1 per cent market growth led by Flipkart and Canada. However, its revenues declined by 8.3 per cent to $27.3 billio due to government-mandated restrictions in certain areas.

Dinkar Ayilavarapu, Partner, Bain & Company has been appointed the new Vice President for Corporate Strategy by Flipkart. Ayilavarapu will lead Flipkart’s corporate strategy team to strengthen its vision and OKR (objectives and key results) planning. He has over 18 years of experience and was employed with Bain & Company for 14 years in their India, New York and South Africa office. He was the part of the analyst’s Results Delivery and Technology, Media and Telecommunications (TMT) practices in the Asia-Pacific region.

Ayilavarapu was also the author of Bain & Company’s India Philanthropy Report and a member of the CII National Committee on Regulatory Affairs. He has also worked with ITC Ltd (in their Foods & Tobacco division) and with technology company Accenture. An MBA from IIM Kolkata, Ayilavarapu also holds a BSc (Hons) degree in Computer Science from Delhi University.

Heavy rain and cyclonic storm Tauktae has damaged TT Ltd’s cotton yarn spinning plant at Rajula in Amreli, Gujarat. As per India Infoline 13 districts including Amreli district were in blackout for two days.

TT’s plants have been temporarily shutdown. Its Insurance Company is appointing surveyor to assess losses. The company has taken all safety measures to take care of its employees, workman and their family.

Flagship company of the 71 years old TT Group, TT Ltd was founded by DrRikhab Chand Jain. The company covers the entire spectrum of textile sector. It is a vertically integrated concern and self-contained textile producer, garment manufacturer. ISO 9001 Certified and Govt. Registered Three Star Export House. It has 25 franchise production units at eight different locations, working exclusively for TT. Its dealer network extends to 500 Wholesalers throughout India. It is also the first Indian knitwear company to go public.

Parent company of fashion brands FabAlley and Indya, High Street Essentials (HSE) has raised Rs 25.50 crore in a fresh funding round led by existing investors Elevation Capital, India Quotient, Dominor Holding and family offices. The funds will be utilized for expanding the brands’ D2C footprint both domestically and internationally by adding more personalized solutions to proprietary web and app products and expanding brands’ presence with global eCommerce conglomerates.

The company also plans to improve in-housing key production processes such as printing and embroidering, enabling a 30-day mind-to-market production turn-around, comparable to global fashion leaders such as Zara and Boohoo. Earlier this year, the fashion house forayed into the personal care segment with the launch of an in-house brand, Indya Skin Care. It also launched a new Indian daywear brand called Earthen by Indya and a collaborative capsule collection with acclaimed designer Payal Singhal.

Over the course of 2020, HSE heavily strengthened its digital presence with new initiatives such as a subscription-based shopping experience, and catalog curation with AI-based recommendations based on customers’ affinity and data mining. The company also grew its global footprint by partnering with international marketplaces such as Namshi, Amazon US, and Zalora.

India’s sovereign wealth fund, the National Investment and Infrastructure Fund (NIIF) plans to invest in SoftBank-backed vertical e-commerce player FirstCry. The investment will be made through a secondary transaction estimated at around $150-$200 million. It will take place at a valuation of a little over $2 billion, similar to TPG, ChrysCapital and Premji Invest investment of around $315 million in the firm this March. This would take the total size of ongoing round to around $450-$500 million.

Japanese conglomerate SoftBank is the single largest shareholder in FirstCry with over 40 per cent stake. FirstCry is also looking at a potential initial public offering (IPO) in the next 12-18 months. It has spun a logistic arm-Xpresbess in 2015. It continues to see steady demand on its platform though consumption has taken a hit due to the second COVID-19 wave.

Founded in September 2010, FirstCry acquired BabyOye from Mahindra Retail in an all-stock deal worth around $50 million in 2015. Its other investors include Mahindra Group, Valiant Capital, Ratan Tata and Kris Gopalakrishnan. It currently has over 300 stores across 125 cities and a user base of over 4 million and offers more than 200,000 baby and children’s products from 2,000 brands. It competes with Hopscotch and Kids Stop Press in the online segment.