With India continuing to have one of the youngest populations in the world, most digital-first fashion and lifestyle mid-market online brands being steered forward by Gen-Z and millennial shoppers, is all set to grow into a $10 billion industry by 2028 from the current $2.4 billion.

A joint report by leading management consulting firm, Bain & Company with TMRW – an Aditya Birla Group venture with a large number of disruptor Indian brands in the fashion & lifestyle space- have together pointed out the overall online fashion market will grow to around $35 billion at a rapid CAGR of 25 per cent by FY28.

The rise of e-commerce has opened up access to the mid-level fashion category pan-India, which has seen 30 per cent growth annually since 2019, as online shopping increased drastically over the Covid years and later. Easy delivery to smaller towns along with a variety of payment modes has helped international as well as domestic brands on e-marketplaces become household names.

The next phase of growth for these brands will be led by premiumization and growing customer preference for branded clothing. The Gen-Z and millennial consumer segments will ensure that 70-80 percent of online traffic will be for digital-first brands with their growing desire to wear new and more aspirational brands.

Digital disruptor brands will drive the fashion segment

The report highlighted the key factors driving growth in the global and Indian online fashion and lifestyle market, especially for digital disruptor brands. It also aimed to identify changes in consumer behavior over rapid digitization in the last four years along with understanding how to make the best profitability from current brands in this space.

Digital disruptor brands will rapidly grow in the next phase of market evolution -- especially in certain fragmented categories -- to a $2.4 billion market over the next few years. The focus will be on including more remote markets with a digital-first operating model that enables speed and data-led decision-making.

Developments

This will greatly help big fashion houses who have many sub-brands such as TMRW, who have recently increased their brand portfolio with a tie-up with eight more brands across fashion sub-categories, including Berrylush, Bewakoof and Juneberry and is set to include some more brands in coming months to make a more complete portfolio.

Bain and Company expects over 40 digital-first fashion and lifestyle brands in the Rs 50 - Rs 100 crore revenue range to join the e-commerce bandwagon by FY28, as this segment gradually becomes more lucrative.

“If today there are only 25 such brands over Rs 100 crore, within five years there could be 50 brands over Rs 200 crore in value. I think this is quite meaningful in the context of the broader fashion market in India that has historically been super fragmented," opines Radhika Sridharan, Partner, Bain’s and Co.

National brands expect $2.5 billion in online business in FY23

In order to seize the moment, many national brands have now invested in growing their e-commerce website businesses and have almost doubled their online share constituting a $2.5 billion online business in FY23, having grown at 34 percent in the last four years.

However, the good times are slowing down as the comfort of online shopping habits are waning in post-pandemic times with a more balanced growth pattern with mall shopping and offline channels becoming more popular once again.

Bouqut; Mega retail companies that form a house of brands rather than individual brands will do better as they ride on physical and digital marketplace infrastructure and have better shared horizontal investments and capabilities in technology and data science.

A more well-developed e-commerce infrastructure that helps brands to run lean and mean operations with lower overheads is paving the road ahead for the fashion and lifestyle Indian segment.

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12 September 2023, Mumbai

In a bold move that reaffirms its stronghold in the Indian kidswear market, Gini & Jony, the beloved brand known for dressing generations of children, has unveiled its new avatar, Gini & Jony 2.0. The brand's latest transformation is marked by the addition of over 50 retail outlets in the current quarter, augmenting its already extensive network of 500+ retail points.

Commitment to quality and legacy

Gini & Jony's enduring legacy, spanning four decades, has fostered a deep connection with its customers. This connection, cultivated through stylish and comfortable clothing, has now extended to the millennial generation who grew up wearing the brand. Gini & Jony remains steadfast in its commitment to delivering high-quality kids' fashion that caters to the ever-evolving demands of Indian families.

A new era of excellence

The newly appointed CEO, Prem Ranjan, expressed the brand's commitment to professionalism and customer-centricity. He emphasized a systematic approach across all aspects of the business, from design to distribution. Gini & Jony is ushering in a new era of excellence through various initiatives within the organization.

Innovation in kids' fashion

Gini & Jony's Spring Summer 2024 collection, showcased at the exclusive preview event in Kolkata's JW Marriott from 5th to 8th September 2023, is a testament to their innovation. The collection combines sustainability with trendsetting style, redefining fashion for children. The brand's "Let Kids Be Kids" ethos takes on new dimensions with a focus on empowering children through thoughtful garment design and functionality.

Solidifying leadership

With a transformative trajectory and the introduction of their latest collection, Gini & Jony is poised to cement its position as the preferred choice for dressing the youngest members of Indian families in both style and comfort. As the brand looks ahead, it continues to evolve while staying true to its core values of quality, style, and affordability.

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Menswear brand Barcelona continues its strategic expansion in India, unveiling its latest brick-and-mortar gem in Patna's Patliputra Colony. Nestled within Zee Saheb The Supermarket's lower ground floor, the new outlet boasts an extensive denim collection alongside an array of men's casual staples, from graphic tees to checkered shirts.

This move signifies Barcelona's emphasis on tapping into non-metro markets, following recent store openings in Uttar Pradesh's Hamirpur and Goa. The brand also proliferates across various cities, including Pune, Visnagar, Mahoba, Kota, and Dapoli.

Moreover, Barcelona is eyeing an imminent initial public offering, marking a pivotal chapter in the journey that began with entrepreneur Jaimin Gupta's vision in Ahmedabad in 2015. With plans to diversify its product range, Barcelona's growth story continues to unfold.

Shoppers Stop's latest 'Fratini' collection, launched under their growth-focused private brand strategy, debuts with the 'Live Epic' campaign featuring brand ambassador Sanya Malhotra.

This campaign celebrates the confident and stylish Fratini girl, encouraging individuals to embrace life with confidence. Sanya embodies, portraying a modern woman who embraces every aspect of life without compromise.

The Fratini collection offers a wide range of dresses, workwear, and casual outfits in diverse colors and styles, catering to today's fashion-forward women.

12 September 2023, Mumbai

There is finally light at the end of the tunnel for Raymond as their shares hit a record high in the live S&P BSE Sensex earlier this month -- after facing many challenges over the last few years -- due to changing customer preferences for ready-made garments, mounting debt, and a sharp decline in revenue and other legacy issues.

Raymond’s shares as the leading branded textiles and apparel franchise in India, shot up 9.85 per cent to Rs 2,172 apiece in market trade. It recorded a new all-time high of Rs 2,240 during a recent session, making it the biggest intraday gain since December 2022.

Having built up a legacy over the years, Raymond has been facing many challenges in post-Covid years, due to growing demand for readymade garments instead of fabric and getting it custom-stitched by tailors, who are also no longer readily available or formally trained in tailoring luxury garments. However, the up-coming festive and wedding season looks optimistic and is already hiking up demand, which has led to the recent growth spurt.

Re-structuring of group divisions spurs growth

Raymond is currently focusing on three key steps to restructure the group and focus on its core business to bring back former glory. Firstly, the company has divested its FMCG business, earlier operated by Raymond Consumer Care (RCCL), into an all-cash transaction valued at almost Rs 28 billion to GCPL (Godrej Consumer Products).

Secondly, it announced the separation of its lifestyle business into RCCL, which would clearly demarcate the consumer apparel segment from other unrelated businesses such as the real estate and engineering interests of the company.

Additionality

Thirdly, Raymond has also put almost 22 billion (adjusted for tax) into the group, which also includes the promoter’s stake in RCCL. All these steps have cohesively helped in reducing debts by selling off loss-making brands, creating healthy cash to drive growth, and making the operating structure of respective businesses more profitable. It has also increased promoter’s confidence through infusing cash transactions worth Rs 11 billion for Rs 1,500 per share.

The company is currently focused on having a more comprehensive strategy to leverage full profitability of its many brands, as highlighted by the BSE. Raymond's stock recently surged almost 13.3 percent to hit an all-time high, especially after brokerage firms Motilal Oswal and Jefferies initiated coverage on the stock with a high 'buy' call and a target price of Rs 2,600 apiece.

These efforts are expected to drive future growth, with projected revenue and profit growth of 10 and 19 percent, respectively, between FY 2023-25, points out Motilal Oswal.

Smart retail strategies working well

The Raymond group finally became net debt-free after the sale of their FMCG business and currently has a significant liquidity surplus of over Rs 1,500 crore at the group level to steer ahead of future growth.

The stroke of good luck is expected to continue well past the de-merger, as there will now be two independent consumer-facing net debt-free listed entities for lifestyle as well as real estate businesses.

Wind of change

With consumers preferring to buy ready-made over tailor-made, Raymond is on an all-new high as it gears up towards the upcoming festive and wedding season with the ready-made segment having undergone a restructuring process.

All loss-making EBOs have been downsized across India along with strategic control and channelizing the retail and marketing strategies of MBO’s for brands such as Raymond, Park Avenue, ColorPlus, Ethnix, and Park Avenue among others.

With around 150 exclusive outlets to be set up annually across India, Raymond should soon be back where it belongs leading the Indian apparel industry. 

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12 September 2023, Mumbai

Reliance Retail secures Rs 2,069.50 crore investment from KKR

Investment values RRVL at Rs 8.361 lakh crore. RRVL now one of top four companies by equity value.

According to an ET report, Reliance Retail Ventures Limited (RRVL) is poised to secure an infusion of Rs 2,069.50 crore from the global investment firm KKR through one of its affiliates.

This strategic investment has led to the valuation of RRVL at an impressive pre-money equity value of Rs 8.361 lakh crore. As a result, RRVL has now solidified its position as one of the top four companies in the country by equity value, as highlighted in the press release.

It's worth noting that KKR's funding primarily originates from its Asian Fund IV, and the successful completion of this transaction is contingent upon receiving regulatory approvals and adhering to other customary procedures.

Remarks:

• The investment from KKR is a significant vote of confidence in RRVL's business model and growth prospects.
• The valuation of RRVL at Rs 8.361 lakh crore is a major milestone for the company and reflects its strong market position.
• The investment will help RRVL to accelerate its growth plans and expand its footprint across the country.

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