India's retail sector is on the verge of a significant growth spurt, fueled by the remarkable recovery witnessed last year. 

Over the next four years, an additional 35 million sq ft of mall space is set to be added, representing an investment of over Rs 20,000 crore.

Key Highlights

• Tier II Cities Driving Mall Growth: The majority of the mall space expansion will be concentrated in Tier II cities, contributing to a 25% increase in overall mall space.
• Mall Owners' Revenue to Grow 7-9%: Despite substantial capital expenditure plans, mall owners are projected to achieve 7-9% growth in revenue for the current fiscal year, maintaining stable credit risk profiles.
• High Occupancy Rates: The optimistic outlook for the retail sector is expected to support a consistently high occupancy rate of 95%.
• Diversified Consumption Patterns: CRISIL Ratings emphasizes the importance of diversified consumption across various categories in bolstering retailers' operational performance. Sectors such as jewelry, restaurants, sports, and electronics have experienced double-digit growth in the current fiscal year, while the apparel and footwear sectors have also displayed a robust recovery.
• Stable Credit Risk Profiles: Credit risk profiles have remained stable this year, attributed to strong operating performance and healthy balance sheets. The debt-to-EBITDA ratio is expected to improve slightly, transitioning from 3.2 times in the previous fiscal year to 3 times in the current fiscal year.

Overall Outlook

The Indian retail sector is poised for sustained growth in the upcoming years, driven by increasing disposable incomes, urbanization, and a growing preference for organized retail. 

The expansion of mall space, particularly in Tier II cities, is expected to further propel the sector forward.

5 Key Insights :

1. Tier II Boom: Mall growth explodes in smaller cities. 
2. Retail Rockets: 7-9% revenue surge for mall owners. 
3. Consumers Diversify: Jewelry, restaurants, sports join apparel/footwear surge. 
4. Credit Stable, Debt Dips: Healthy balance sheets, improving financial ratios.
5. Organized Reigns: Urbanization, rising incomes fuel retail preference.

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Driven by Impressive Retail Recovery

India's mall space is set to expand significantly in the next two to three years, thanks to the retail sector's impressive recovery last year. An additional 35 million sq ft of mall space is expected to be added, driven by ongoing investments estimated to surpass Rs 20,000 crore in the next four years.

Key Highlights

• Tier II Cities to Witness Strong Mall Growth: The expansion of mall space will be mainly concentrated in Tier II cities, resulting in a 25 per cent rise in the total mall space.
• Mall Owners' Revenue to Grow 7-9%: Despite hefty capital spending plans, mall owners are projected to achieve 7-9 per cent revenue growth in the current fiscal year, keeping their credit risk profiles stable.
• Occupancy Rate to Remain High: The positive trend in the retail sector is expected to maintain a high occupancy rate of 95 per cent.
• Diversified Consumption to Support Retailers: CRISIL Ratings highlights the vital role of diversified consumption across various categories in supporting retailers' operational performance in the medium term. Sectors such as jewelry, restaurants, sports, and electronics have witnessed double-digit growth this fiscal year, while the apparel and footwear sectors have also shown a strong recovery.
• Credit Risk Profiles Stable: CRISIL Ratings' reports show that credit risk profiles have stayed stable this year, owing to a solid operating performance and healthy balance sheets. The agency foresees a marginal improvement in the debt-to-EBITDA ratio, moving from 3.2 times in the previous fiscal year to 3 times in the current fiscal year.

Overall Outlook

The Indian retail sector is poised for continued growth in the coming years, driven by rising disposable incomes, increasing urbanization, and a growing preference for organized retail. The expansion of mall space, particularly in Tier II cities, will further provide a boost to the sector.

28 November 2023, Mumbai

The global innerwear industry is experiencing a remarkable surge, fueled by the rising spending power of a style-conscious youth demographic. Innerwear, once a hidden segment, is now taking center stage as a global fashion trend. India's innerwear sector has witnessed impressive growth, particularly post-pandemic, driven by the pervasive influence of social media.

Industry Dynamics:

• Innerwear companies are strategically pursuing revenue and profit growth to optimize earnings.
• The youth segment, with its immense sales and expansion potential, is a key target market.
• A recent Textile Value Chain (TVC) report reveals the innerwear market segmentation:
• Men's wear: 82%
• Women's wear: 15%
• Kids' wear: 3%
• Analysts anticipate significant growth in the men's innerwear segment from 2020 to 2025.

Market Trends:

• The overall innerwear market valuation stood at $1.9 billion in FY20, projected to reach $3.1 billion by FY25, with a CAGR of 10.3%.
• The women's innerwear segment, worth $4.4 billion in FY20, is estimated to grow at a CAGR of 14%, reaching $8.5 billion by FY25.
• Kids' wear, valued at $14 billion, is expected to grow at a CAGR of 10.5%, reaching $23 billion by FY25.

These figures underscore the promising outlook and substantial growth potential across various innerwear segments.

Competitive Landscape:

• Major players like Jockey, Zivame, Van Heusen, Rupa, Dollar, Enamor, Clovia, Marks & Spencer, Nykaa, and Amante are fiercely competing in the Indian innerwear market.
• New entrants like Reliance Retail and Nykaa are making their mark, leveraging their strong online presence.
• The landscape is complex, with Reliance Retail holding a dominant position in the men's wear segment, while Zivame and Clovia lead in the women's wear segment.

Key Factors Driving Growth:

• Rising disposable income, particularly among the youth
• Increased awareness of fashion and style
• Growing focus on comfort and quality
• Proliferation of e-commerce platforms
• Expansion into smaller cities and towns

The Indian innerwear industry is poised for continued growth, driven by these factors and the increasing demand for stylish and comfortable innerwear.

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02 December 2023, Mumbai

In a strategic move to diversify its supply chain and reduce reliance on Chinese vendors, Walmart, the retail behemoth, is ramping up imports from India. The company's imports from India have witnessed a remarkable surge, climbing from a mere 2% in 2018 to a substantial 25% in the first eight months of this year.

Video Insights

Winsome lose some

This shift comes at the expense of China, whose share in Walmart's imports has dwindled from 80% in 2018 to 60% during the same period.

This strategic decision reflects Walmart's proactive approach to mitigate the risks associated with overdependence on a single supplier.

The escalating political tensions between the US and China, coupled with rising import costs from China, have further fueled Walmart's drive to diversify its sourcing network.India, with its burgeoning manufacturing sector and well-established factory infrastructure, has emerged as a compelling sourcing alternative for Walmart.

Going steady

Recognizing the potential, Walmart has been steadily expanding its operations in India since 2018. In a testament to its commitment, Walmart pledged to import $10 billion worth of goods annually from India until 2027.

Currently, Walmart imports a diverse range of products from India, including toys, electronics, bicycles, pharmaceuticals, packaged food, dry grains, and pasta. This shift is poised to inject a significant boost into the Indian manufacturing industry, providing manufacturers with access to a vast global market.

• Rajesh Kharabanda, CEO of Freewill, aptly summarizes the positive implications of this shift, highlighting the trust placed by global retailers in India's manufacturing prowess and the utilization of its well-developed factory infrastructure.

• As Walmart continues to strengthen its sourcing ties with India, the Indian manufacturing industry is poised for an era of growth and prosperity. This strategic partnership is mutually beneficial, with Walmart securing a reliable and cost-effective supply chain while India's manufacturing sector gains access to global markets and opportunities.

  5 key insights :

  1. Walmart Diversifies Supply Chain

  2. India Becomes Key Sourcing Partner

  3. Global Retailers Trust India's Manufacturing

  4. Mutual Benefits for Walmart and India

  5. Indian Manufacturing Poised for Growth

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30 November 2023, Mumbai

Beyond Economics: From Smart Textiles to Sustainable Practices

Video Insights

Evolving Consumer Preferences Drive Digitalization

• As consumer preferences shift towards convenience and personalization, digitalization has emerged as a driving force in the textile and fashion sectors. This digital transformation is paving the way for innovations like smart textiles, which are expected to reach a market value of approximately 5.55 billion USD by 2025.

AI and IoT Revolutionize Textile Production

• Traditionally reliant on manual labor, the textile industry is now embracing AI and IoT innovations to enhance efficiency and productivity. AI-powered defect detection systems are streamlining production processes, while smart clothing embedded with AI and IoT sensors is enabling the collection of biometric data from wearers.

AI and Automation: A Double-Edged Sword for Workers

• The integration of AI and automation in textile manufacturing is creating new opportunities for innovation and productivity gains. However, this transformation also presents challenges for workers, potentially leading to job displacement and the need for reskilling and upskilling initiatives.

AI's Impact on Fashion and Textiles: From Trend Prediction to Sustainable Practices

• AI is playing a multifaceted role in shaping the future of fashion and textiles. AI-powered algorithms are being employed to predict trends, automate design processes, and promote sustainable practices by optimizing resource utilization and reducing waste.

AI: A Catalyst for Transformation in the Textile Industry

The old-fashioned textile industry, long struggling to adapt to modern demands, is now relying on AI and automation to drive improvement. AI is serving as a catalyst for change, enabling digital transformation within the textile and apparel sectors to address challenges and enhance efficiency, sustainability, and customer satisfaction.GIST 

• AI and other digital technologies are transforming the textile industry.
• This transformation is driven by evolving consumer preferences, which are shifting towards convenience and personalization.
• AI is being used to automate tasks, improve efficiency, and predict trends.
• This is leading to job displacement for some workers, but it is also creating new opportunities.
• Overall, the digital transformation of the textile industry is a positive development that is making the industry more efficient, sustainable, and customer-centric.

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28 November 2023, Mumbai

The textile and apparel industry stands at a pivotal juncture, poised to embrace digital transformation and unlock a world of possibilities for enhanced efficiency, sustainability, and competitiveness.

However, the path to digitalization is not without its challenges, including financial constraints, expertise gaps, resistance to change, data privacy concerns, and interoperability issues.
To effectively navigate these challenges and accelerate the adoption of digital technologies, the textile and apparel sectors can implement strategic approaches that foster collaboration, knowledge sharing, capacity building, and government support.
Overcoming Financial Constraints:
Government Subsidies and Grants: Government agencies can provide financial incentives to incentivize the adoption of digital technologies, reducing the upfront costs for businesses.
Partnerships with Technology Providers: Collaborations with technology providers can enable access to affordable digital solutions and shared infrastructure, lowering the financial burden on individual companies.
Phased Implementation: Implementing digital technologies in phases, starting with pilot projects, can provide valuable insights and cost-effectiveness before a full-scale transformation.
Addressing Expertise Gaps
Training and Education Programs: Textile and apparel companies can invest in training and education programs to upskill their workforce in digital technologies.
Knowledge Sharing Platforms: Establishing knowledge-sharing platforms and communities within the industry can foster collaboration and the exchange of expertise.
Industry-Academia Collaborations: Partnerships with universities and research institutions can provide access to specialized knowledge and expertise in digital transformation.
Overcoming Resistance to Change:
Compelling Business Cases: Demonstrating the tangible benefits of digital technologies in terms of cost savings, efficiency gains, and improved customer experiences can encourage adoption.
Change Management Strategies: Implementing gradual changes and adopting a phased approach can minimize disruptions and ease the transition to digital processes.
Empowering Employees: Empowering employees with training and involvement in the digital transformation process can foster a sense of ownership and reduce resistance.
Addressing Data privacy and security concerns:
Robust Data Governance Frameworks: Establishing robust data governance frameworks and implementing stringent cybersecurity measures can protect sensitive data and build trust among stakeholders.
Transparency and Communication: Open communication regarding data privacy practices and transparent data handling protocols can alleviate concerns and build trust.
Compliance with Regulations: Adhering to data privacy regulations and industry standards can demonstrate a commitment to data protection and ensure regulatory compliance.
Overcoming Interoperability and Integration Challenges:
Standardization of Data Formats: Adopting standardized data formats and communication protocols across the supply chain can facilitate seamless data exchange and integration.
Interoperability Testing and Validation: Implementing interoperability testing and validation processes can ensure compatibility and efficiency between different digital systems.
Open-Source Solutions and Collaboration: Utilizing open-source solutions and fostering collaboration among technology providers can accelerate the development of interoperable solutions.
By embracing these strategies and overcoming the challenges, the textile and apparel industry can unlock the transformative power of digitalization, propelling it towards a future of enhanced sustainability, efficiency, and global competitiveness.
A CASE STUDY: Frontier.cool Inc.
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02 December 2023, Mumbai

WHY India

India's mall space is set to witness a remarkable growth of 35 million square feet in the next two to three years, fuelled by the retail sector's strong rebound in the previous year. Continuous investments from various sources further bolster this expansion, projected to exceed Rs 20,000 crore over the next four years. 

Private equity, global pension funds, and sovereign wealth funds are expected to contribute significantly, accounting for approximately 15% of these investments.

• Tier II cities are poised to be the primary drivers of this growth, with mall space in these regions expected to increase by 25%. Despite substantial capital expenditure plans, mall owners are anticipated to achieve revenue growth of 7-9% in the current fiscal year, maintaining stable credit risk profiles. 
• This positive trend is expected to sustain a high occupancy rate of 95%.
• Diversified consumption across various categories is crucial for retailers' long-term success, as emphasized by CRISIL Ratings' Associate Director Saina Kathawala. 
• Categories such as jewelry, restaurants, sports, and electronics have witnessed double-digit growth in the current fiscal year, while the apparel and footwear sectors have also demonstrated a robust recovery.
• CRISIL Ratings attributes the stable credit risk profiles this year to solid operating performance and healthy balance sheets. 
• The agency expects a marginal improvement in the debt-to-EBITDA ratio, from 3.2 times in the last fiscal year to 3 times in the current fiscal year.

Net net

India's mall market is poised for significant expansion, driven by strong retail sector recovery, continuous investments, and diversified consumption patterns. 

This growth is expected to benefit mall owners, retailers, and the overall economy.

5 key insights :

1. Retail Sector Rebound Drives Mall Growth

2. Continuous Investments Fuel Expansion

3. Tier II Cities Lead Mall Boom

4. Diversified Consumption Boosts Retailers

5. Stable Credit Profiles for Mall Owners

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29 November 2023, Mumbai

WHY India-Next big market

Key Insights:

India's retail landscape is set for a significant expansion, with an estimated 38 million sq. ft. of new retail space expected to be available in the top seven cities by 2027.

International brands are flocking to India, with 24 brands actively seeking retail spaces.

The rise of omni-channel retailing is driving demand for brick-and-mortar stores.

Consumers are seeking immersive shopping experiences, leading to increased footfalls and higher rental rates.

Video Insights

Emerging Trends:

Delhi-NCR is emerging as a retail hotspot, with a projected 31% of new supply.

New Gurugram and Greater Noida West are emerging as potential Grade A retail destinations.

Data Points:

The first half of 2023 saw a 24% surge in retail space leasing compared to the same period in 2022.

Fashion & clothing accounted for 38% of total lease activity in the first half of 2023.

Malls to Witness Significant Growth in Trading Values and Rental Incomes in FY 2024, ICRA Predicts

ICRA, one of India's leading credit rating agencies, has projected a strong upward trajectory for the retail industry, with malls set to reap substantial benefits. 

The agency anticipates a remarkable surge in trading values of up to 4-5% in FY 2024, indicating a robust recovery from the pandemic's impact. 

Furthermore, ICRA expects rental incomes to witness a healthy growth of 8-10% during the same period.

These positive projections stem from the overall success of retail across India, which has witnessed a resurgence in consumer spending and demand. 

As footfalls in malls continue to increase, retailers are expanding their presence, leading to higher occupancy rates and an overall revitalization of the retail sector.

Prognosis for future

ICRA's optimistic outlook for malls is further reinforced by the growing popularity of omni-channel retailing, which seamlessly blends online and offline shopping experiences. 

This approach has driven consumers back to physical stores, seeking immersive and engaging shopping experiences that e-commerce platforms cannot replicate.

As a result of these factors, malls are poised to play a pivotal role in India's retail landscape, with FY 2024 expected to be a year of significant growth and consolidation for the industry.

Future Outlook:

India's retail space market is expected to reach a value of $2 trillion by 2032.

Overall, the JLL India report paints a positive picture of India's retail landscape, with strong growth expected in the coming years.

Gist

• Soaring middle class
• Rapid urbanization
• Evolving consumer preferences
• Increasing disposable incomes
• Growing adoption of e-commerce

Key Insights

• Retail boom in top seven cities
• Influx of international brands
• Omni-channel retailing trend
• Demand for immersive experiences

Emerging Trends

• Delhi-NCR as retail hotspot
• Grade A retail destinations
• Fashion & clothing dominance

Data Points

• 24% surge in retail leasing
• Robust recovery from pandemic
• Healthy rental income growth

Prognosis for future

• Pivotal role of malls
• Omni-channel retailing boost
• FY 2024 as a growth year

Future Outlook

• $2 trillion retail space market
• Strong growth in coming years

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25 November 2023, Mumbai

In a momentous stride towards bolstering bilateral cooperation and fostering economic growth, the textile sectors of India and Switzerland have joined forces through a groundbreaking Joint Declaration signed by the Confederation of Indian Textile Industry (CITI) and Swiss Textiles on November 23, 2023. 

Video Insights

Momentous occasion

This remarkable agreement marks a pivotal moment in the textiles industry, paving the way for enhanced trade, innovation, and sustainable practices.

At the heart of this strategic alliance lies the 19th Joint Economic Commission (JEC) meeting between India and Switzerland, held on November 24. Dinesh Nolkha, Vice Chairman of CITI, played an instrumental role in this gathering, which delved into the intricacies of the Joint Declaration and charted a course for fruitful engagement with the Swiss Textile Industry.

Win-win

CITI's Chairman, Rakesh Mehra, eloquently captured the essence of this collaboration, emphasizing its shared vision to elevate bilateral cooperation, streamline trade, and catalyze economic growth within the textile sector. 

Both trade associations have pledged their unwavering commitment to the development of a comprehensive Trade and Economic Partnership Agreement (TEPA), poised to revolutionize the landscape of textiles.

Recognizing the immense potential of India's textile market, renowned for its precision, quality, and innovation, Swiss Textiles is eager to explore new avenues for trade, technology exchange, and investment within the textile value chain. 

This partnership holds immense promise for fostering growth, innovation, and global competitiveness in India's vibrant textile sector.

United we stand

The Joint Declaration meticulously outlines the key aspects of eliminating trade barriers, securing market access, strengthening mutual cooperation, encouraging investments, and adhering to sustainable practices. 

The proposed TEPA, a cornerstone of this alliance, will serve as a catalyst for collaboration in research and development within the textile sector, presenting a transformative opportunity for both nations.

Empowering Textiles

This historic landmark in the bilateral relations between India and Switzerland signifies a shared commitment to reinforcing the textile industry, propelling economic growth, and creating employment opportunities. 

The combined efforts of India and Switzerland will undoubtedly reshape the global textile landscape, paving the way for a brighter, more sustainable future.

Five key insights :

1. Textile Alliance: India and Switzerland forge groundbreaking alliance.

2. Enhanced Trade: Joint Declaration promotes trade, innovation, and sustainability.

3. Shared Vision: CITI and Swiss Textiles collaborate for economic growth.

4. TEPA Commitment: Trade associations pledge comprehensive agreement.

5. Sustainable Future: Alliance aims to reinforce textile industry and create jobs.

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