27 July 2022, Mumbai:

Dark stores supermarket

Dark stores are often located off the high street yet close to high-demand communities. Other industries, including apparel and durables, might as well be located outside the city. They are modest-sized neighborhood warehouses for receiving, processing, and storing orders. They are simpler to automate and were created to make choosing rapid and affordable.

Within a specified service time commitment, they can handle click and collect services and last-mile deliveries for various online buying platforms. Dark storefronts might be the best combination to experiment with as merchants battle for customer acquisition and retention based on speed and cost.

Merchants were battling issues with profitability and growth even before COVID-19 prompted retailers in India and around the world to reconsider their operating strategies. Then COVID-19 arrived, with no sign of foot traffic and increasing online customer demand for new categories every day.

ALSO READ Reimagine: How Future Retail Space Will Look Like

Retail industry overview

For over a decade, retailers have experimented with back-end or dark stores, often without the tag. Why are we talking about them now, given this?

The solution can be found in the shrinking retail margins, intense competition, and soaring customer expectations. Last but not least, the COVID-19 pandemic has accelerated the use of dark storefronts.

Customers have registered on retailers' websites in record numbers thanks to the lockdown, which has kept them indoors. India has become more favorable for the expansion of e-commerce due to the recent embrace of digital technology.

ALSO READ Virtual Release of USFIA's Ninth Annual Fashion Industry Benchmarking Study

Dark stores trend

By 2020, there will be over 550 million Internet users in India, giving 41% of the population access to online shopping sites. With more than one-third of the population having used one or more of India's more than 50 wallet providers, the landscape of digital payments is also evolving.

Customers now find it simpler to shop online because of all of this. All of those mentioned above, along with changes in consumer buying habits during the present lockdown, have opened the door for a business model centered on dark businesses that can satisfy customers' expectations for online shopping and affordable, quick delivery. 

RELEVANT NEWS Ralph Lauren debuts metaverse offering the holiday-themed experience, dubbed “The Ralph Lauren Winter Escape”

Dark store theory

Dark stores are becoming more and more popular among participants worldwide in various industries, including food, fashion, footwear, consumer durables, etc. Multiple chains of supermarkets served as the early adopters of the approach, which gained traction in the U.K. in an organized fashion.

The idea quickly attracted the interest of some of the top international merchants in the US and then in Europe, East Asia, and Australia. Several well-known supermarket chains worldwide operate or are experimenting with dark stores.

RELEVANT NEWS  Opening up retail will accelerate business recovery: RAI

Retail industry in India

The bulk of these stores are more significant than 100,000 square feet and have specialized in-house equipment, including food processing, cold press systems, butchering lines, etc. 

RELEVANT NEWS D2C brands: Transforming Retail Scenario

As an example, Wendy's, Chick-fil-A, and other fast-food chains have established "ghost" kitchens that function just to handle delivery orders - no dining room or carryout - allowing businesses to enter markets where they do not run physical stores. According to Wendy's, ghost kitchens will be a key component of its expansion plan, even in markets where it doesn't have any physical locations. In order to reach a wider audience, some brands also use shared retail or "ghost kitchen" sites.

RELEVANT NEWS  Opening up retail will accelerate business recovery: RAI

How Secular Is Trend?

Retail industry trends

As per the KPMG report," Increasingly, more and more players across the globe are adopting dark stores across sectors, including grocery, apparel, footwear, consumer durables, etc. Today multiple globally known supermarket chains are running or experimenting with dark stores with the majority of them spread over more than 100,000 sq.-ft with in-house specialized capabilities. Internal estimates by some of the companies using dark stores globally suggest that adoption of dark stores adds three to four percent to the bottom line through a mix of higher customer orders and lower costs".

Join our community on Linkedin

26 July 2022, Mumbai:

Emerging retail paradigm driving retailers to reimagine 

Consumers across the globe adapted online shopping during the COVID period. They began trusting the e-commerce market that exploded with delivery platforms and marketplaces witnessing new-user growth of 50%.
Today's millennial consumer is informed, picky & needs research underpinning, and is outcome-driven with macro-economic factors undergoing a sea change in recent years.

The dynamic consumers in the face of continuous disruption are the key drivers transforming the trade landscape presenting a new paradigm of, opportunities & challenges as the new norm.

D2C Brands In India

Studies indicate that the decade 2021-2030 will see D2C brands like Clovia, Atomberg, Furlenc attract significant attention and investments as they keep growing. The market thrives with the launch of super apps Driven by Gen Next entrepreneurs, the current D2C market in India is thriving with the launch of super apps by big companies like the Tata group and Reliance Group.

In fact, big players are in the frays, for example, the Aditya Birla Group is looking to set up a new subsidiary for building a portfolio of New Age, digital brands (D2C brands) across fashion, beauty, apparel, and allied lifestyle segments.

d2c brands news:

Studies indicate that the decade 2021-2030 will see D2C brands like Clovia, Atomberg, Furlenc attract significant attention and investments as they keep growing.

KPMG India reports that there are more than 800 D2C brands in the country today. The D2C sector is worth $44.6 billion currently, projected to touch $302 billion by FY 2030. Further to one of the Financial Express reports," The latest report reveals that D2C brands are estimated to be $60 billion industry by FY27, registering a CAGR of about 40%.".

Driven by Gen Next entrepreneurs, the current D2C market in India is thriving with the launch of super apps by big companies like the Tata group and Reliance Group. In fact, big players are in the frays, for example, the Aditya Birla Group is looking to set up a new subsidiary for building a portfolio of New Age, digital brands (D2C) across fashion, beauty, and allied lifestyle segments.

TATA Group forays into Super App

It has launched the ‘House of Brands’ business, TMRW to roll out and back digital businesses. TMRW is looking to create a portfolio of fashion and lifestyle brands by acquiring and incubating over 30 brands in the next three years.

The format also enables multiple founders to operate within its ‘house of brands’ platform that shares a common vision and capabilities, as shared by the company. Meanwhile, startups like Globalbees, Mensa Brands, Thrasio, Good Glamm Grup, and GOAT Brand Labs will join ABRFL to build a new brand portfolio, says Ashish Dikshit, Managing Director.

Boosting brand-customer relationships

D2C fashion brands serve customers across all marketing channels. This model does away with any middleman barriers such as wholesalers, retailers, or distributors and offers better prices and faster delivery times with higher profits. D2C also enables fashion brands to utilize new technologies to boost brand-customer relationships and bridge the supply-demand gap.

For example, the digitally immersive store introduced by premium lifestyle brand Van Heusen helps enhance the fit and fashion experience of shoppers. 

RELEVANT NEWS D2C player Cloudtailor goes offline

Adopting omnichannel strategies to boost engagement

To reach their target consumers, D2C brands are leveraging the services of social media influencers. They are also adopting the omnichannel model to boost brand engagement and encourage repeat purchases with long-term loyalty. Many new small and medium-size D2C players are entering the apparel retail segment. However, only a few have the resources, and detailed know-how to invest in design development, team building, raw material sourcing, and manufacturing. 

Eastman Brands, the division of Eastman Exports Global Clothing, Tirupur has introduced the ‘White Label’ concept for the apparel segment, D2D (Design-to-Delivery) and D2C (Direct-to-Consumer).

The concept allows a product or a service produced by one company to be rebranded by the other companies to make it appear as if they have made it.

RELEVANT NEWS  India’s retail scenario transforms with the arrival of D2C brands

Helps brands launch new products

Stakeholders believe the D2C brands segment enables new retailers or brands and labels to launch their products as no big product development, lead times, and investment is required. S Kannan, the CEO, of Eastman, explains, that the ‘small order quantity concept is going to be a massive business in the next few years and the company is trying to cater to this segment as soon as possible

Ensuring small orders remains a problem for nearly all brands and start-ups and for that they keep searching for manufacturers/vendors who can support them, and work with small factories which are ready to take small quantities.

Product category also matters in the case of smaller orders like Bewakoof.com which focuses on T-shirts since it is comparatively easy to source and has fewer issues like fit. The brand works with a few vendors having 50 stitching machines.

Market to reach $100 billion by 2026
D2C brands in India sector are expected to be the biggest drivers of the retail market in India with their size expected to reach $100 million by 2026. In 2021, these brands clinched around 174 deals to raise $1.81 billion in capital.

This not only resulted in the creation of thousands of new brands but also gave enablers and digital sellers new growth opportunities by launching disruptive models such as e-commerce roll-ups, houses of brands, etc.

Join our community on Linkedin

30 July 2022, Mumbai:

The fashion business in India

Indian fashion is renowned for its colorfulness, elegance, and cultural history. It highlights the nuance and beauty that have endured for many years. It has grown over time and is not only cozy, elegant, and aesthetically pleasing.

The fashion business in India has made a dramatic entrance onto the current global scene.

It is a fusion of vibrant customs. From ethnic to western, salwar kameez to high-street design, India's fashion business has undoubtedly through several changes.

ALSO READ Reimagine: How Future Retail Space Will Look Like

Textile Industry: An Overview

India's fashion business benefits from having tens of thousands of years of rich heritage and knowledge behind it, as well as from the fact that the fashion for sewn clothing has existed in India since ancient times.

One of the main sectors of India's capital goods sector is the textile industry. According to a survey by the Indian Brand Equity Foundation (IBEF), India is the world's second-largest exporter of textiles.

Additionally, it is anticipated that the Indian textile and apparel sector will experience significant expansion over the next several years due to favorable demographics and rising income levels. India has a thriving fashion sector, from elaborate attire for wedding rituals to casual apparel.

ALSO READ Virtual Release of USFIA's Ninth Annual Fashion Industry Benchmarking Study

Heritage

Crewel, Chikhan, and Zardosi, traditional Indian embroidery techniques, have made their way to the international front of the fashion catwalk, showcasing Indo-Western attire as a synthesis of the best of East and West. In addition, India is known for its distinctive blend of cotton and silk sarees, including those from Kanjivaram, Mysore, Pochampalli, Jamdani, Blucher, Pithani, Benarasi, Bandhini, and Sambhalpuri, among others.

RELEVANT NEWS India Fashion Week Australia to feature veteran & upcoming designers 

In India, the fashion industry has grown by USD 100 billion, and over the next five years, the online fashion market is predicted to increase by 15%.

Offline, the industry is forecast to develop at a CAGR of 8–10%. India's fashion business is highly lucrative in scope and variety, especially for women.

The corporate appearance has been increasingly popular in today's society due to the rapid development of information technology. Still, the rebirth of the ethnocultural look has become somewhat dominating, popularising the older styles of art and craft.

RELEVANT NEWS Fashion Week 2022: Designers’ business well promoted

Visual Business

Visual Brand Strategy for Your Fashion

Visual branding is an important piece of the puzzle to growing brand recognition & loyalty for your .

The corporate appearance has been increasingly popular in today's society due to the rapid development of information technology. Still, the rebirth of the ethnocultural look has become somewhat dominating, popularising the older styles of art and craft. 

RELEVANT NEWS Indian designers eye Dubai as the city transforms into global fashion hub

Pandemic & Its Effect

The pandemic caused a significant slowdown in the fashion industry in 2020. People started investing in designer masks and comfortable clothing in place of designer clothing. The Covid-19 pandemic profoundly impacted the worldwide fashion business, causing anything from changes in consumer behavior to digital fashion weeks.

However, one positive outcome was that the fashion business became wiser regarding social and environmental responsibility. We discussed the season's hot topics of sustainability, optimism, and digitalization with famous fashion choreographer and Runway Director Jagnoor Aneja. She provided us with a list of the newest fashion trends.

RELEVANT NEWS Fashion designers ride on NFT bandwagon

How Secular Is Trend?

The availability of clothing sizes has changed globally due to the increased knowledge of body positivity and body shape acceptance. Now they range from pregnancy to size-inclusive fashion to plus size.

In addition to using regular sizes, several designers also provide plus-size options in their collections.

Plus-size models dominate the fashion industry, from editorial shoots to ramp walks.

Curvy women have suddenly gained popularity as new fashion icons.

Join our community on Linkedin

26 July 2022, Mumbai:

Physical fairs

After a long pause due to Covid19, mega physical fairs are coming back in fashion.

Before the pandemic reached India, the garment and apparel industry had trouble surviving. Until 2019, the garment and apparel industry accounted for most of the export revenue. Textiles and apparel accounted for over 15% of total earnings.
According to KPMG, the sector employed 4.5 crores, of people, making it one of the biggest employers in the country, additionally giving insight perspective on supply chain reconfiguration and India's growing role in a diverse global market post-COVID-19.
Even before the introduction of Covid-19 in India, the industry was still a long way from its zenith.

The pandemic worsened existing issues and caused companies to deal with an unprecedented interruption in everything from production to supply networks. As a result, it raised the grave concern of whether or not the industry would survive this upheaval.

Physical activity events

The pandemic is expected to negatively influence exports, with second-order effects on domestic trades and exports domestic sales. The pandemic has negatively impacted the majority of India's export markets (the US and EU together account for roughly 60% of the country's total apparel exports in value terms), resulting in order cancellations and order delays that have increased inventory levels and increased working capital needs.

The last quarter of FY20 saw a dry-up in apparel orders, problems with working capital, and a lack of clarity on tariffs and incentives, mainly as exporters from Bangladesh, Sri Lanka, and Vietnam are given privileged access.

ALSO READ  Milano Unica: Sitip presents Cosmopolitan Fashion-tech, for urban tailoring with super-performing fabrics

The closure of all of India is also having an impact on domestic consumption. Due to the availability of apparel/clothing for the next summer season, new store openings have ceased, and even domestic retailers are experiencing an inventory build-up.

Furthermore, domestic pricing may suffer if exporters dump their stocks on the domestic market, resulting in even smaller margins. This could cause short-term blips like lower spending and casual labor employment. 

Physical current events

If the crisis persists and there is a statewide lockdown, it would negatively affect consumer sentiment because stores and malls will be closed while maintaining social distance, safety, and health. The length of the recovery cycle would be directly impacted by the outbreak's scope and the lockdown.

According to one AEPC report," For AEPC, it was a year of complete changeover. The Council embraced digitalization and now it functions seamlessly across both physical and virtual worlds. Apart from the 24x7x365 virtual exhibition platform, we have been conducting online B2B meetings and webinars to attract foreign buyers and apprise apparel exporters of opportunities".

The CITI has asked the government to swiftly announce a relief package for the textile and apparel sector to lessen the crisis the capital- and labor-intensive textile industry is now experiencing in the wake of the coronavirus outbreak.

Since apparel is one of life's necessities, the online textile business saw a surge in sales even under lockdown. Because the online textile sector operates entirely online with no opportunity for physical or human touch, the lockdown had no adverse effects on it.

Due to its independence from offline businesses like wholesalers, semi-wholesalers, retailers, intermediaries, etc., the online textile industry even saw a surge in sales. 

Types of physical events

Retailers with an online presence have a great chance of becoming unicorns (a company worth over $1 billion) of the New Age India because of the growing trend in the online textile industry. The pandemic was in full-fledged effect when the lockdown was implemented, and it was the summer shopping season.

Due to all these advancements, businesses in the online retail sector saw a rise in revenue sheets. The Indian online textile market is fully justified in creating new unicorns. Most customers were pleased with their online buying experiences while the store was under lockdown.

Way Forward: To integrate the textile value chain
After pressing hard on the pause pedal due to the pandemic, mega physical B2B fairs are coming back in fashion/apparel. Indian textile & apparel exhibition organisers are gradually commencing operations.
Albeit India's textile and apparel industry is quite certainly undergoing structural changes to retain, consolidate & expand network/distribution channels through physical B2B trade fairs and exhibitions.

In accordance with the empirical evidence in summary the foregone conclusion is that this physicality tool is here to stay.

Join our community on Linkedin

22 July 2022, Mumbai:

USFIA Speaks Out in Favor of Removing 301 Tariffs on Apparel, Home Textiles, and Footwear.

Today the U.S. Fashion Industry Association joins other retail and fashion industry groups who are speaking out about the pernicious impact of the Section 301 tariffs on both the American fashion industry and American consumers.

Our message is clear -- Americans, not China, are the losers here. American businesses and consumers have paid more than $145 billion in extra tariffs that have not discouraged the behavior that triggered the original 301 investigation.

ALSO READ  China loses 2nd biggest export market tag for "Indian Cotton Yarn"

Tariffs are a direct, regressive tax on the American consumer—it affects consumers at all income levels, from the single parent struggling to make ends meet as they purchase back-to-school necessities for their kids, to the consumer of high-end fashion manufacturing in the United States, and every American family in between.

However, the average low-income U.S. household spends a higher portion of its income on apparel and footwear than wealthier Americans, meaning that tariffs on apparel and footwear have hit struggling families more than anyone else. For example, the tariff on a cashmere sweater is 4%, while the tariff on a lower-cost acrylic sweater is 32%.

ALSO READ China Penalty Tariffs on Finished Textiles & Apparel 

In USFIA’s statement, we highlight the fact that these tariffs have negatively impacted the American jobs created by American brands and retailers. Trade supports high-quality, high-paying jobs, but these tariffs have discouraged America’s most innovative and iconic brands from hiring due to the increased sourcing and production costs.

These tariffs have also not encouraged a large-scale shift out of China as companies diversify their sourcing base. China is the leading textile supplier of fabrics and accessories in the world and there are currently no realistic options for sourcing destinations that can viably replace China entirely.

RELEVANT NEWS  Anti-China Sentiments: Indian Textile Sector Is In A Sweat-spot 

We also rebut the claims that removing these tariffs will hurt U.S. workers and do nothing to fight inflation. This is the predictable response of protectionists and ignores the reality of the situation.

Rather, we agree with U.S. Treasury Secretary Janet Yellen that tariffs increase domestic prices and raise costs to consumers and businesses due to higher cost inputs and that lowering U.S. and Chinese tariffs could help ease inflation.

RELEVANT NEWS How Real Is the Shift Of Apparel Orders From China To Vietnam

Secretary’s Yellen’s observations are supported by the U.S. Congressional Budget Office, which estimated that the tariffs would cost the average American household nearly $1,300 in 2020 alone, and by a recent study from the Peterson Institute for International Economics, which found that cutting the Section 301 tariffs would directly correspond to a reduction in the consumer price index. 

RELEVANT NEWS Covid Induced Supply Chain Constraints Of China And Its Impact On the Textile Sector

According to the 2022 USFIA Benchmarking Survey, which was released earlier this week, increasing production or sourcing costs are the #1 business challenge facing the U.S. fashion industry in 2022. Removing these tariffs would help both American consumers and businesses at a time of extreme inflation.

RELEVANT NEWS  (China + 1) Strategy: Driving Global T&A Supply Chains

These tariffs have done nothing to solve China’s Intellectual Property (IP) policies and practices.

From the experience of USFIA member companies (who source and sell products around the world, including and especially in China) the best way to address these concerns is action at the multilateral level that includes other global trading partners – and USFIA’s member companies are no stranger to IP violations.

Let’s find a solution that does not use American companies and American families as hostages to outmoded protectionist ideas.

Join our community on Linkedin

30 July 2022, Mumbai:

Indian textile industry an overview

The consumer social point of view dominates discussions in the textile business, ignoring its effects on other industries, the Indian export dilemma, and the environment.

India is one of the biggest producers of textiles, employing 68 million people indirectly and 51 million directly. Significant issues are emerging in the textile business due to shifting government policy at the state and federal levels. The threat of rising interest rates, labor costs, and worker pay is another significant one.

The centers of India's textile and apparel industries are located in cities like Bangalore, Mumbai, Tirupur, and New Delhi.

These producers can produce the full selection of knitwear and woven clothing at affordable prices without sacrificing quality. The Indian textile sector has its drawbacks, such as limited access to cutting-edge technology and a failure to adhere to international standards in a fiercely competitive market.

ALSO READ  How Much Is Depreciated Currency Supporting the Indian Textiles Sector 

Raw material shortage:

Due to environmental concerns, specific units in China and Europe have been shut down, which has led to an increase in the price of primary raw materials. There are also many other factors, such as weather, which are affecting the raw material supply.

The cost of raw materials has increased due to unpredictable market conditions, weather, policies, and other factors.

Environmental issues:

Environmental compliance isn't always the priority for importers of textiles and apparel. Infrastructure bottlenecks:

India's infrastructure remains to be of a poorer condition than that of many other Asian nations.

ALSO READ  Rupee@80: The Tale Of the Indian Textile Sector 

Indian textile industry analysis

The textile sector is attempting to concentrate on alternatives and plan its return to normalcy during this lockdown while the world battles the ongoing outbreak of the terrible COVID-19 virus.

This situation has hampered the economic forecasts, and several sectors' business models have also been altered. Following the shutdown, all industries and textile organizations will implement new on-site safety measures and sanitization procedures. 

RELEVANT NEWS Globally China Plus One Policy, Is Indian Textile Anecdotally Gained!

Indian textile industry opportunities challenges, and suggestions

The Indian apparel market, anticipated to generate USD 74 billion in 2020, is now predicted to decline by roughly 10 to 15 percent. It significantly impacts employment; it was expected that the textile industry would lose approximately one crore jobs.

Diversification of apparel and textiles beyond cotton and forays into the artificial fiber & synthetics sector could represent a significant turn in the Indian textile industry.

With 3.5 crore employees, the textile industry is the second-largest employer after the agricultural sector. India is now China's rival even in terms of overall production.

More foreign purchasers like Walmart, Gap, and other retailers are visiting India due to the country's minimum wage increase, child labor reduction, and worker security measures in compliance with international norms. 

100% FDI is allowed in the textile sector under the automatic route. As per one KPMG report, "Importance of joint ventures in the Indian context has been highlighted for setting up infrastructure for high-value functional products".

RELEVANT NEWS  Indian Textile Industry: Will India Miss The Boat Again

Skill Set Issue:

The cotton textile industry is frequently plagued by labour problems. In fact, a low level of skill formation required of the labour force is normal.

There is a critical scarcity of skilled labor. Designers aware of the needs of western clients are hard to find. The productivity, even among industry workers, is appallingly poor.

If an American worker's productivity is 100, an Indian worker's productivity is merely 13. Textile is a poor place to invest because of strikes and union hooliganism.

In India, 35% of the overall production cost comprises raw materials, substantially more than in other nations. 

RELEVANT NEWS Indian Textile Industry: Challenges & Opportunities

Productivity Issue:

Despite having the most significant area dedicated to cotton production (26%), India only produces 9%.

To improve output, it is necessary to develop high-yielding cotton varieties. For producers, fluctuating prices and the unknown supply of raw materials are primary headaches.

RELEVANT NEWS Anti-China Sentiments: Indian Textile Sector Is In A Sweat-spot 

Indian textile industry analysis

The sector has the potential to contribute significantly to the Hon’ble Prime Minister’s vision to become a USD 5 trillion economy in the next few years owing to significant value addition across the textile value chain.

The article has tried to articulate the secular trends including trade scenario, market opportunities, key growth drivers, and the way forward.

Join our community on Linkedin

26 July 2022, Mumbai:

How is 'traditional retail' transitioning to 'consumer commerce'

Retail businesses are better described as a customer-centric approach but given the new paradigm of it transitioning to a digital business landscape connecting the critical pieces viz front, middle, and back offices help navigate the Future Consumer Commerce Retail Space.

The expansion of the organic food sector has been noted as one of the major trends in India's food retail market. The demand for natural food has evolved into a requirement over the past few years, although it was mostly a trend in the early 2010s.

According to industry predictions, India's organized food retail and grocery business will expand at a CAGR of 8% between 2021 and 2025.

The organic food industry is anticipated to grow at a CAGR of almost 20% over the same period. The statistics demonstrate the enormous influence the organic food market will have on the food business, both in terms of growth and trends.

Traditional retail formats in India

In the contemporary world, the retail shopping pie emanates largely in-store, online, or via mail buying. Instead, they can be integrated, combining it seamlessly by interplay/interoperability in myriad ways putting pulse by closely understanding customer shopping needs.

In India, where the demand for organic food has increased over the past few years, there has been a significant shift in consumer awareness, pricing, and transparency. Grocers and brands now need to connect every stage of the value chain to a discriminating market and governmental rules as customers become more aware and sensitive of the items they purchase.

Priorities aside, it's critical to recognize a fundamental shift: customers are seeking out better options. A noticeable change in social patterns is a significant driver of the rising demand for organic food.

Traditional retail environment

The sacrifice that consumers make when they choose food products that are grown and processed using chemicals are now being recognized and appreciated by consumers, which naturally affects the decisions they make when they go grocery shopping.

In today's hyperconnected digital world, digital stores are displacing physical storefronts, they also give businesses a chance to improvise with original concepts.

A powerful tool that retail establishments may use to leverage their brand is recognizing and responding to the changing requirements of their customers. The best way to adjust to the shifting needs is to combine the digital and physical worlds. 

Traditional shopping experience

Even though the future of retail in the post-covid era is uncertain, anyone with a knack for improvisation can succeed and make money with their retail locations. Therefore, physical and mortar retailers won't disappear for a very long time.

This progression, combined with other factors, has caused a rise in two types of retailing: store retailers and non-store retailers like direct sales, catalogs and mailers, TV home shopping, and lastly, virtual stores or online retailing. Consumers are now considered king, and businesses are vying for their place in the hearts of consumers.

Odds are stacked up against Traditional shops and businesses staring at challenging and trying conditions. The demand for physical offices and buildings has decreased due to the development of dependable, affordable remote corporate collaboration solutions like teleconference phone and video conferencing systems (like Skype).

For example, the digitally immersive store introduced by premium lifestyle brand Van Heusen helps enhance the fit and fashion experience of shoppers. 

Traditional shopping essay

The retailing sector must advance along with changing consumer behavior as in Future-Ready Retail. It appears that brief internet journeys are increasing while filling the buckets with products is falling. In-store retail and technology work together to eliminate traditional central store purchases and upend the entire market.

Traditional retail formats in India

Innovation tests regular food stores by offering more than simply price breaks. Because of all the change, today's retailing leaders must develop cutting-edge, customer-focused shopping experiences to satisfy the needs and demands of contemporary consumers.

The most likely scenario is that offline retail will remain the mainstay and mainstream channel, but how space is leveraged will likely change.

The layouts of today's stores do not meet the needs of today's customers. Future stores must have a variety of customer-focused features.

Join our community on Linkedin

23 July 2022, Mumbai:

As the rupee plummeted to a new low of breaching 80 per dollar last week, exporters expected the weakening domestic currency to help a wide range of industries, particularly labor-intensive ones like textiles and apparel, agriculture, footwear, and handicrafts — where margins are typically tight and services industries like IT.

According to a Business Standard report, Textile industry players are buoyant that the weak rupee will help the trade & commerce, which is a net exporter, to the extent of a 5-10% likely rise in profit margins albeit in the same breath trade pundits opine that for some the joy may be short-lived gains may not be lasting & enduring. 

Since over 44% of the foreign loans obtained by Indian enterprises were unhedged, some smaller and mid-sized companies are anticipated to experience tough times as the Indian rupee remains around its lowest level relative to the US dollar.

The Reserve Bank of India's statistics indicates that Indian businesses raised about $38.2 billion during the fiscal year that ended in March. Only 56% of these loans are hedged, and the remaining foreign loans are left unprotected, exposing the companies to the risk of currency volatility.

The general trade belief in the textile sector is that the falling rupee will help enhance India’s competitiveness @ the global marketplace leading to increasing the export of textiles.

Albeit there is a greater need to pay the attention to the context against the movement in the currency of the country we are competing with for a realistic understanding.

ALSO READ How Favourable Is Rupee's Precipitous Fall For Indian Textile Sector

There may be natural cover in foreign exchange revenues for some of the unhedged loans. According to experts, the rupee is predicted to weaken much more this year due to the massive maturity of foreign debts. Therefore, Indian enterprises will have to take cover immediately or book losses.

"While the exporting businesses, particularly those that export software, will benefit from the weakening rupee, the importing companies—if they maintained their unhedged positions—may suffer substantial financial consequences.

However, no significant corporation will permit them to retain their foreign exchange liabilities unhedged, especially given the unstable geopolitical environment brought on by the Russia-Ukraine war, according to Prabal Banerjee, an international finance specialist.

ALSO READ  Falling Rupee: Increasing Exports 

According to him, smaller and mid-sized businesses that wish to save costs take out unhedged loans. Foreign loans, also known as external commercial borrowings (ECBs), have become a significant source of funding for the Indian corporate sector.

In addition to providing a relative cost advantage due to persistently low global interest rates, it supports both the country's demand for credit and its economic expansion. As per surveys by the Bank of Baroda, ECBs currently make up a sizable portion of India's external debt, accounting for 36.8% as of December last year. 

RELEVANT NEWS  Indian Apparel Exports: An Overview

The majority of the rated corporations, according to rating agency Moody's, have safeguards in place to reduce the impact of currency changes.

These include natural hedges in revenue and costs with US dollar denominators or links, certain US dollar financial hedges, or a combination of these elements. These assist limit the adverse effects on cash flow and leverage, even in the case of a more severe depreciation scenario.

RELEVANT NEWS How Much Is Depreciated Currency Supporting Indian Apparel Exports

According to Moody, over half of the 23 India-based companies it rates have natural hedges that lessen their exposure to rupee weakness.

Corporate executives claimed that a weak rupee increases the landing cost of imported goods, allowing domestic producers to hike prices. Despite the recent decline in metal and oil prices due to recessionary concerns, these benefits will be negated by increased currency volatility due to rising interest rates. 

RELEVANT NEWS Covid Induced Supply Chain Constraints Of China And Its Impact On the Textile Sector

"To control inflation, the central bank had to increase repo rates several times. The cost of interest for businesses has gone up as a result.

"Additionally, companies like ours have payments and receivables in dollars. "This is because 50% of our revenue comes from foreign markets.

RELEVANT NEWS   Indian Textile Industry: Will India Miss The Boat Again

The engineering major is not the only business considering these tactics to reduce the risks associated with commodities and currencies.

Firms in the infrastructure, capital goods, and cement sectors must use outward and inward covers to safeguard margins from currency fluctuation.

Analysts claim that smaller players have challenging hurdles as costs rise, increasing the amount of working capital they need.

However, for the gains to materialize, the rupee must stabilize at a depreciated level in the international market. 

However, the genuine concern is that country could lose the currency edge as the peer currencies are also under constant pressure i.e. currencies of its competitors devaluate proportionately.

By economists' estimates In the last 10 months, the rupee's exchange rate with the dollar has fallen 8.7%, from 73.6 to 80, and sectors like textiles as per insiders operate at a wafer-thin ballpark margin of 2-3%, therefore depreciation in the rupee makes a real difference.

Join our community on Linkedin