06 February 2024, Mumbai

India's non-food and grocery value retail market is poised for explosive growth, according to a recent assessment by Wazir Advisors. 

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Interesting data-points

The sector is poised to rise 53% from its existing $111 billion in FY23 to a pupil-dilating $170 billion by the time we reach 2026, ensuring a healthy CAGR of 15%, which remarkably outperforms the secular retail sector's estimated 10% CAGR.

This impressive growth trajectory paints a promising picture for non-food and grocery retailers in India, as the total retail sector is projected to reach a massive $1,219 billion by FY26.

Growth kickers? 

Several factors are contributing to the surge, including:

Fierce competition:

The market is becoming more and more competitive, with both domestic and international players vying for market share. Infrastructure irritants: Logistics and supply chain bottlenecks can chowk growth in smaller towns and cities.

Regulatory hurdles: 

Complex regulations and licensing procedures can create entry barriers for new players.

Despite these challenges, the future of non-food and grocery retail in India appears bright. 

By addressing these odds and capitalizing on the growth drivers, the sector is all set to play a pivotal role in India's economic development.

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03 February 2024, Mumbai

But Domestic Market Faces Headwinds

Strong export growth masks the domestic slowdown in India's cotton yarn industry.

India's cotton yarn industry is expected to witness remarkable growth of 12–14% in FY24, driven by a massive 85–90% surge in exports. 

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This export boom is fueled by a shift in sourcing away from China and rising demand for spring and summer textiles in the US and EU. 

However, the picture is not entirely rosy. A significant drop in cotton prices is likely to cause a 9-10% decline in revenues, impacting domestic demand.

Export surge driven by China shift and global textile demand

Yarn exports have already soared by 142% in the first seven months of FY24, with increased shipments to China playing a key role. 

This has pushed the share of exports in overall production from 19% to 33%. Bangladesh, China, and Vietnam remain the top buyers, accounting for 60% of Indian yarn exports.

Geopolitical risks and domestic cotton woes:

While the ongoing Red Sea conflict poses no immediate threat, its escalation could impact apparel exports and subsequently harm both domestic and export demand for cotton yarn.

Domestic cotton production is expected to dip by 6% in 2024 due to reduced acreage and uneven rainfall. This, coupled with record highs in H1 FY23 followed by a steep decline, suggests a marginal increase in cotton prices from current levels.

Yarn prices and profitability under pressure:

Yarn prices have mirrored the downward trend in cotton prices, further impacted by weak demand from downstream apparel companies. 

This is expected to result in a 9–10% decline in operating income and a 200–240 basis point drop in operating margins for spinners.

Investment outlook and future prospects:

The industry witnessed significant debt-funded capex in FY22 and FY23, but weak demand and lower realizations are currently putting major expansions on hold. 

However, ICRA expects a pick-up in capex announcements by FY25, driven by modernization needs, the "China Plus One" strategy, and potential improvements in domestic apparel demand.

Sum & substance:

India's cotton yarn industry stands at a crossroads. While the export market is thriving, domestic challenges pose significant risks. 

The industry's future success will depend on its ability to navigate these contrasting trends and adapt to shifting global dynamics.

5 Key Insights:

1. Exports Boom: Global demand pushes yarn exports up 142%.
2. Domestic Dip: Cotton price fall shrinks domestic demand 9-10%.
3. China Shift: Geopolitical factors drive sourcing away from China.
4. Prices Under Pressure: Downward trend in yarn prices squeezes margins.
5. Future Uncertain: Capex on hold, waiting for domestic recovery.

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27January 2024, Mumbai

Thriving in a $190 Billion Market

The Indian apparel retail market is a colossal force, projected to reach a staggering $190 billion by 2025. But just like a desert wind changing the sand dunes, consumer preferences and the retail landscape are undergoing a dynamic shift. 

Traditional large-format giants, once unshakeable kings, now face challenges from online upstarts, evolving tastes, and a rapidly changing ecosystem.

Market Dynamics:

• Online retail booms, forcing brick-and-mortar stores to embrace seamless omnichannel experiences and differentiated offerings.
• Rising disposable incomes in smaller cities propel large-format retailers beyond metros, blurring the lines between physical and online platforms.
• In-house brands shed their "poor cousin" image, with retailers investing heavily in quality, style, and value to boost profitability and brand loyalty.
• Eco-conscious consumers demand sustainable practices, pushing retailers towards organic materials, ethical sourcing, and upcycling initiatives.

Retail Giants and Adaptations:

• Shoppers Stop: Premium positioning with curated experiences, omnichannel presence, and strong loyalty programs. Future focus: expanding private labels, loyalty programs, and smaller formats in Tier II and III cities.
• Lifestyle: Mid-range and premium mix, expanding beyond apparel into homeware, beauty, and kids. Future focus: omnichannel, personalized shopping, and data-driven promotions.
• Max Fashion: Fastest-growing chain with aggressive store expansion and focus on budget-conscious consumers. Future focus: continued store openings, omnichannel integration, and venturing into athleisure and footwear.
• Reliance Retail: Market leader with diverse brands like Trends, Centro, and JioFashion. Future focus: JioMart online integration, value-focused stores like Zudio, and hyperlocal sourcing.
• Westside: Fashion-forward focus with in-house brands and experiential play. Future focus: private labels, online presence, and expansion into smaller towns.
• Zudio: Trendy apparel at rock-bottom prices, targeting Tier II and III markets. Future focus: maintaining low prices, expanding product range, and strengthening logistics.

Key Success Metrics:

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

What Lies Ahead:

Agility, innovation, and a customer-centric approach will define success in this dynamic market. The retailers who weave a compelling narrative of convenience, value, and personalization will stand out and thrive in the ever-changing landscape. 

As the winds of change sweep through, only those who adapt and experiment will stay ahead of the curve and continue to reign supreme in India's vibrant fashion tapestry.

5 key insights about thriving in a $190 billion market:

1. Omnichannel Integration: Seamless blend of online and offline shopping experiences. (Image of a person shopping online and in a physical store)
2. Category Expansion: Go beyond apparel to homeware, beauty, and more. (Image of a store selling clothes, furniture, and beauty products)
3. Targeted Formats: Different store types for different customer segments. (Image of a high-end store and a discount store)
4. Personalization: Customized shopping experiences for each customer. (Image of a person using a shopping app that recommends products based on their preferences)
5. Sustainability & Community: Focus on eco-friendly practices and giving back to the community. (Image of a clothing store made from recycled materials)

06 February 2024, Mumbai

SIGA Urges Repeal of Rule, Stakeholders Propose Solutions

The South India Garment Association (SIGA) has sounded the alarm on a new payment rule for Micro, Small, and Medium Enterprises (MSMEs) that they claim poses an "existential threat" to the garment industry. Introduced as part of the MSMEs Development Act, Rule 43B(H) mandates prompt payment to small businesses by buyers, with late payments now deemed income for the seller and attracting taxes on the buyer.

Industry in Peril: Threatens Jobs and Exports

• SIGA President Anurag Singhla warns of "lakhs of jobs" at stake, calling the rule a "big blow" to an industry already facing competition.
• Naresh Lakhanpal, SIGA Vice President, calls it the "worst crisis in 50 years," with clients canceling orders due to the rule's "unsustainability."
• Industry experts highlight the impracticality, as the average payment cycle is 90 days, making the 45-day limit crippling.

Potential Catastrophe:

• Estimates suggest over 50,000 garment units could be affected, jeopardizing millions of jobs across the value chain.
• Potential consequences include lower production, increased costs, and shifting orders to countries with more relaxed payment regulations.

Stakeholder Solutions:

• Industry-specific exemptions, exemptions for the garment industry, extending payment timelines, and financial support are proposed solutions.
• Phased implementation to allow businesses time to adjust is also suggested.

The Stakes are High:

The garment industry significantly contributes to the Indian economy, employing over 12 million people and accounting for 2% of GDP. 

The government's response is crucial to protecting jobs, industry stability, and the sector's contribution to the nation's economy.

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30 January 2024, Mumbai

Threads of Hope Dangle on a Fraying Loom: India's Textile Crisis Threatens Millions

India's once-booming textile industry is unraveling faster than a dropped spool. Exports have plunged 40%, leaving cotton yarn and handloom producers grasping at scraps of orders. 

In Tiruppur, a bustling hub thrumming with 600,000 workers, factories stand eerily silent, echoing with the phantom whir of absent machines. 

Textile units, choked by the slack demand from recession-hit US and European markets, cling to shortened workweeks, a desperate bid to retain some workforce. "Continued slump," warns Raja M Shanmugam, ex-president of the Tirupur Exporters' Association, "spells mass layoffs."

Challenges glore

Giants like H&M, GAP, and Tommy Hilfiger, usually thirsty for inventory during peak season, have drastically cut orders, their appetite dampened by economic woes. 

The pain runs deep in Tiruppur, a haven for hundreds of labor-intensive MSME units. Shanmugam fears their impending closure, throwing thousands into unemployment.

Macro-headwinds

But the crisis isn't just about dwindling demand. Champala Bothra, General Secretary of the Surat Textile Traders Association, points to the plight of small manufacturers squeezed by two forces: plummeting demand and the reluctance of large traders to work with them due to complex Input Tax Credit (ITC) issues. 

This lethal combination pushes them out of the global market, leaving yarn exports to bear the brunt of the decline while finished goods gather dust in choked warehouses.

Call to action

India's vibrant textile tapestry, once woven with the hopes of millions, now hangs precariously, strands fraying at the edges. 

The government's silence on industry pleas only amplifies the fear. Unless swift action tackles both external headwinds and internal roadblocks, the fragile threads of hope supporting millions of livelihoods risk snapping altogether.

5 Key Insights from "Threads of Hope Dangle on a Fraying Loom":

1. Boom Gone Bust: Textile Exports Plummet 40% 

2. Ghost Town Tiruppur: 600,000 Workers Face Layoffs 

3. Recession Bites: H&M, GAP Slash Orders 

4. MSME Meltdown: Small Manufacturers Squeezed Out

5. Hope Fading: Government Silence Deepens Anxiety

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25 January 2024, Mumbai

WHY India

Unfolding India’s growth story

Reliance Retail's final quarter of 2023 was a crescendo of success, fueled by a festive symphony across all segments. 

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Net profits soared like a triumphant finale, breaking the Rs. 3,000 crore barrier for the first time, a 32% crescendo over the previous year.

A Chorus of Growth: Enchanting India's retail landscape for years to come

This festive exuberance propelled overall revenue past the Rs. 74,000 crore milestone, cementing Reliance Retail's position as the undisputed retail conductor in India.

Imagine a vibrant Indian bazaar on Diwali night, bustling with shoppers adorned in their finest attire, exchanging sweets and gifts. Each store in this bazaar is a section of Reliance Retail, playing its part in the symphony of growth.

Secular growth

The grocery section, led by star performers like Fresh Signature and JioMart, delivered a phenomenal 41% year-on-year growth, a clear testament to the appeal of convenience and quality during the festive rush. 

Think families stocking up on fresh produce and delectable sweets, drawn in by the promise of a hassle-free and delicious celebration.

Much more

Fashion and lifestyle, under the baton of Ajio and other formats, sashayed to a 28% growth, proving that style never goes out of season. 

Picture dazzling sarees and kurtas alongside trendy apparel, captivating shoppers eager to dress up for the festive occasion.

Exuberance

Even the consumer electronics segment, powered by Reliance Digital and MyJio Store, plugged into a 19% surge, thanks to timely new launches and flagship models that hit the right note with tech-savvy customers. Imagine excited millennials and tech enthusiasts snapping up the latest smartphones and gadgets, eager to upgrade their experience.

This harmonious performance wasn't just spontaneous; it was meticulously orchestrated. Reliance Retail's strategic maestro added 252 new stores to its network, expanding its reach to an impressive 18,774 stores across India, ensuring every customer was included in the festive melody. 

Think of new Reliance stores popping up across the country, like additional instruments joining the orchestra, amplifying the sound of success.

There is a lot of uptick in the story

Digital and "New Commerce" initiatives, like platforms empowering local Kirana stores, continued their upward climb, now contributing a significant 19% to the overall revenue, proving that technology can amplify even the smallest voices. 

Imagine small Kirana stores, traditionally considered solo instruments, equipped with digital tools and platforms, allowing them to join the grand orchestra and contribute to the overall symphony.

Customer engagement reached new heights, with 320 million transactions and a 24.7% surge in registered users, crossing the 293 million mark, confirming that Reliance Retail had truly captured the hearts and wallets of the audience. 

Picture a wave of happy customers streaming through Reliance stores, their joyful engagement akin to the enthusiastic applause of a captivated audience.

Exemplary

Mukesh Ambani, Chairman, and Managing Director of Reliance Industries, stood before the applauding crowd, acknowledging the segment's triumphant performance and emphasizing the company's unwavering commitment to enriching customer experiences through innovative brands and offerings, promising an even more captivating encore in the future. 

Visionary; Imagine Ambani, like a charismatic conductor, taking a bow before the audience, thanking them for their support and hinting at even greater performances to come.

It is much more than what meets the eye

Reliance Retail's festive quarter wasn't just about numbers; it was a testament to the company's ability to conduct a symphony of growth, driven by strategic precision, technological innovation, and a deep understanding of the Indian consumer. 

The curtain may have fallen on this quarter, but the melody of success promises to continue.

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03 February 2024, Mumbai

Indian Textiles Stumble: Inflation, Imports, and Sustainability Woes Threaten Growth

Outlines:

• Lackluster Sales: Despite holiday discounts and the wedding season, Indian retailers saw a meager 4% sales growth in December 2023, highlighting broader economic woes.
• Regional Disparity: South India bucked the trend, driven by high-value purchases like cars and houses, while discretionary spending took a hit across the rest of the country.
• Inflationary Squeeze: Rising production costs due to expensive cotton, complex taxes, and logistical hurdles are hampering India's competitiveness with countries like Bangladesh and Vietnam.
• Import Surge: A flood of cheaper ready-made garments is eroding profits and stifling job creation in the domestic industry.
• Sustainability Concerns: Environmental issues like water pollution and textile waste add another layer of complexity to the sector's revival.

Deeper Dive:

• Global Headwinds: The slowdown in international trade and declining exports to key markets like the US and EU further exacerbate the industry's difficulties.
• Potential Untapped: Despite these challenges, India's strong natural fiber production and adaptability offer significant growth potential.
• Innovation & Sustainability: Embracing ethical and sustainable practices can help India differentiate itself in the global market and unlock its vast potential.

Actionable Insights:

• Cost-reduction strategies: Exploring alternative materials, diversifying supply chains, and improving operational efficiency are crucial to combat inflation.
• Investing in technology: Adopting digital solutions can streamline processes and enhance competitiveness.
• Sustainable practices: Addressing environmental concerns through renewable energy and responsible waste management can attract eco-conscious consumers.

In essence

India's textile industry faces a multitude of challenges, but its untapped potential and strategic adaptation can pave the way for a vibrant and sustainable future.

5 Key Insights:

1. Discounts Fizzle: Holidays fail to spark textile sales.
2. South Soars: High-value spending lifts regional tide.
3. Cost Crush: Inflation, taxes stifle global competitiveness.
4. Import Inrush: Cheap garments flood market, threaten jobs.
5. Green Challenge: Sustainability adds layer to revival fight.

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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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24 January 2024, Mumbai

Reliance Trends Redefines Its Appeal

Forget the image of overflowing bargain bins and a discount-driven frenzy. Reliance Trends, the ubiquitous apparel giant within the Reliance Retail behemoth, is shedding its "value king" crown and weaving a new narrative where trend-conscious threads, seamless omnichannel experiences, and strategic expansion hold the needle.

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While affordability remains a cornerstone, Trends is now more than just a destination for budget-conscious shoppers. 

It's redefining its appeal, catering to diverse segments, embracing digital integration, and venturing beyond metros to become a one-stop shopping champion for the evolving Indian consumer.

Here is a look at this transformation and how Trends is stitching together a future that promises convenience, variety, and value for the modern Indian shopper.

Riding on a reshaping market

The Indian apparel market is projected to reach a staggering $190 billion by 2025, and Reliance Trends is weaving itself into its very fabric. But the landscape is shifting.

Online and offline experiences are morphing into one, demanding seamless omnichannel journeys. Shoppers crave more than just clothes; they seek homewares, beauty, and more under one roof.

Beyond the familiar metros, Tier II and III cities are buzzing with rising disposable incomes, attracting retail expansion. 

This dynamic defines the market Trends is navigating, one where value remains king but convenience, variety, and a strategic eye beyond brick-and-mortar reign supreme.

Strategies for Success

Reliance Trends isn't just a value king anymore. They're spreading out across India with over 1,400 stores with brands like Trends, Centro, and JioFashion, catering to every wallet and whim. From trendy threads in "HyperModa" to premium picks, they're stitching affordability into every segment. 

They're also playing tech maestro, wielding JioMart for seamless online integration, click-and-collect options, and in-store kiosks that blur the lines between physical and digital.

But Trends isn't just about clothes anymore. 

They're sniffing out the demand for holistic experiences, adding homewares and kidswear in select stores to become the one-stop shop for families. 

What’s more, Trends is venturing into Tier II & III cities, with over 1,400 outlets and tapping into the rising disposable incomes in these untapped markets.

5 key insights:

1. Value Redefined: Beyond bargains, trendy threads for every wallet.
2. Omnichannel Maestro: Blurring lines, click-and-collect, digital in-store.
3. More Than Apparel: Homewares, kidswear, family shopping destination.
4. Tier II & III Expansion: Rising income, untapped markets, local champion.
5. Convenience & Variety: One-stop shop, convenience is king (besides value).

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