10 July 2023, Mumbai

To be honest, the notion that Indian consumers are flocking to retail outlets to make purchases may not be entirely accurate. 

Despite the optimism expressed by analysts and retail experts regarding the resurgence of physical retail, many brands are not experiencing the expected increase in customer footfall. So, what is the true situation for India's growing retail spaces?

India's retail industry is projected to recover and grow at nearly 10% CAGR, reaching $2 trillion in the next decade, despite challenges. The COVID-19 pandemic has reshaped consumption patterns, highlighting the complex reality of India's retail growth.

Slowing Discretionary Spends 

A recent report by PwC, published in early April 2023, sheds light on why discretionary spending has not met expectations this year. The report revealed that 74 percent of surveyed individuals felt the need to curtail non-essential spending due to uncertain financial situations. 

Financial Concerns; Ravi Kapoor, Partner, and Leader of Retail & Consumer at PwC India, explains that the survey underscores the ongoing financial stress experienced by consumers, with 74 percent expressing deep concerns about their financial situation. 

This sentiment is likely to have a restraining effect on spending in highly discretionary categories such as electronics and luxury goods.

Retail Leasing Soars 

Despite the decline in consumer spending, retail leasing is expected to reach 5.5-6 million square feet in 2023, the highest level since the peak of 6.8 million square feet in 2019, according to a report by CBRE. The primary driver of retail space demand in 2023 is expected to be leasing in newly completed malls.

Signaling Confidence

Economists have been predicting a more financially stable consumer base as India's GDP growth remains strong and is projected to solidify further by the end of 2023, providing stability for businesses and salaried workers. 

It is anticipated that the financial uncertainty felt by many Indians will be replaced by a more confident approach in 2024. Although not guaranteed, this projection is pushing retailers to prepare for the return of discretionary spending in 2024.

Attractive Deals

Attractive discounts and deals are currently being offered in high-street commercial spaces, making them a sought-after investment for both investors and retail businesses. With favorable leasing contracts and malls providing multiple-benefit deals, 

Quick Serve Restaurants (QSRs) and fashion brands, in particular, are seizing the opportunity to invest and prepare for a surge in spending next year. Malls are also creating new sections to attract customers with innovative and creative approaches. 

Among all regions in India, the Delhi-NCR region seems to be the most favored by brands for expansion.

Leading Brands Push Forward

Leading retail players such as Aditya Birla Fashion & Retail, with brands like Shopper's Stop and Trends, are displaying signs of bullish physical retail expansion. 

Jubilant Foodworks, the Indian franchisee of Domino's Pizza and Popeyes, Restaurant Brand Asia, the local franchisee for Burger King, and Westlife Foodworld, the master franchisee for McDonald's, are also not holding back despite a weak performance in the fourth quarter of the fiscal year 2022-23. 

According to rating agency ICRA, the top five QSR brands in India are planning to add 2,300 stores between the fiscal year 2023-24 and fiscal year 2024-25, with an estimated capital expenditure of Rs. 5,800 crores.

Growth is the way forward

Fashion brands are following a similar expansion trajectory, with growth seen across apparel, accessories, footwear, and kids' wear. 

For instance, Tata's Zudio plans to add another 130 outlets by the end of fiscal year 2023-24. Shopper's Stop will expand its department store model by 24 stores and add more beauty stores during the same period, while Westside aims to have a total of 214 outlets by then. 

Retailers across India are planning to accelerate their expansion plans, expecting fewer disruptions from a potential third COVID-19 wave. Many top retailers, including Reliance Retail, Shoppers Stop, and Aditya Birla Fashion & Retail, have reported better-than-expected sales before COVID-19 during the October-December quarter of this fiscal year. Reliance Retail and Aditya Birla Fashion & Retail recorded their highest-ever quarterly revenue and profit.

Gain Momentum

The growth in sales can be observed across all channels, with both physical stores and e-commerce experiencing increased revenues due to the surge in online sales during the pandemic. Reliance Industries, for example, witnessed footfall levels reaching around 95 percent of pre-COVID levels in its stores, indicating a complete recovery of its retail business. 

The company saw rising demand across various consumption categories, including consumer electronics, apparel, footwear, and grocery. 

Similarly, Aditya Birla Fashion & Retail reported a 55 percent growth in sales, while Bata India's sales surpassed pre-COVID levels. Titan, known for its jewelry business, saw a 36 percent increase in revenue, with other segments also surpassing pre-COVID sales.

Retailers Adapt; Retailers in India experienced a boost in-store footfall during the Diwali season as COVID-19 infections declined and restrictions eased. This positive trend led to a decrease in discounts and a reduction in the number of sale events held.

Expansions Fuel Growth

Encouraged by the growth, retailers are ramping up their expansion plans. Shoppers Stop, for instance, announced its intention to expand its store network to Tier II markets, which offer significant growth opportunities. 

The department store chain plans to open 8-10 stores in fiscal year and another 10 in fiscal year 2023. Reliance Retail also aims to accelerate its growth momentum and expand operations as the situation normalizes. 

The company opened 1,700 stores between April and December 2021 and plans to continue rolling out new stores at a faster pace. 

Apparel brands are also strategizing expansion of their brick-and-mortar businesses in the third quarter. 

Shoppers Stop, for example, plans to increase its private-label offerings and open 20 department stores and 20 beauty stores over the next six months and two years, respectively. The focus is on deepening its presence in smaller towns with smaller-sized stores to improve efficiency.

Sales Flourish Across Channels

The positive growth trajectory has led to increased optimism and aggressive expansion plans among retailers. 

Reliance Retail, Tata-owned Trent, Aditya Birla Fashion & Retail, and Shoppers Stop, among others, have all seen sales surpass pre-COVID levels during the festive season. 

This boom has prompted them to announce new expansion plans, including store expansions, the launch of new store formats, and the addition of new product categories.

Anticipating a Confident Future

Positive Trends; the Indian retail sector is experiencing a mixed scenario. While discretionary spending has not met expectations, there is still significant retail leasing activity and optimistic projections for future consumer spending. 

Retailers adapt by offering attractive discounts, exploring new strategies, and expanding their physical store presence. 

The growth in sales across various channels, particularly during festive seasons, has further fueled expansion plans. 

With improving economic conditions and increased consumer confidence expected in the future, retailers are gearing up for a potential surge in spending. They are investing in the necessary infrastructure to capture the market's potential.

Latest Textile Events

06 July  2023, Mumbai

The Potential of the Indian Denim Industry; The global denim market is projected to reach $64.1 billion by 2020.

India's denim industry has demonstrated consistent growth, with a current manufacturing capacity of approximately 1.1 billion meters per year. The industry operates at utilization levels of 80-85 percent. 

What all you need to know

Despite these impressive figures, the Indian denim manufacturing sector only contributes 5 percent to the global market, reflecting the overall performance of the textile industry.

Advantages of India as a Denim Manufacturing Hub

Unleashing the Potential; However, experts believe that denim is the only segment within the Indian textile industry with significant potential for growth. Global denim manufacturers are increasingly considering India as an emerging export region due to its adherence to quality standards, cost-effectiveness, and availability of a skilled workforce. 

Domestically, the demand for denim wear is driven by rising disposable incomes, the westernization of work culture, and the growing popularity of denim jeans as business casual attire. 

Furthermore, the younger generation in India, influenced by globalization, considers denim an essential part of their daily wardrobe.

Importance of Textile Industry in Make in India
The textile industry plays a vital role in the Make in India initiative, offering immense potential for growth and employment opportunities.

The government has undertaken various measures to support the sector, such as providing financial aid and subsidies, establishing special economic zones, and streamlining regulations.
The Make in India scheme has already proven to be beneficial for the textile industry, attracting investments from multinational corporations, thanks to the increasing presence of organized retail, favorable demographics, and rising income levels that are expected to drive textile demand.
Government Measures
To capitalize on these opportunities and achieve sustainable growth, India should focus on medium-term policy priorities. Firstly, it is crucial to maintain macroeconomic and financial stability.
Additionally, India should continue to liberalize trade and foster greater trade integration to fully leverage its current exports and production structure.
Sustainable Growth
Mission-Driven Execution; One strategy to streamline the sector is by establishing large-scale clothing parks and shared textile manufacturing infrastructure. Upgrading outdated equipment and technologies should be a key priority to modernize the industry.

Furthermore, India needs to develop a comprehensive plan specifically tailored to the textile industry. Once the plan is in place, the nation should adopt a mission-driven approach to diligently execute it.

Emerging Opportunities 

India possesses several advantages for denim manufacturers. It is one of the few countries with a presence across the entire textile value chain, from cotton production to garment manufacturing. 

Additionally, India has a large skilled workforce and offers quality products at competitive prices. 

Most textile companies in the country have adopted global safety and environmental compliance standards to remain competitive internationally. 

Walmart's ambitious plan to export goods worth $10 billion annually from India by 2027, will support the Make-in-India program. It also discusses the Production-Linked Incentive (PLI) scheme, aimed at encouraging investment in textile manufacturing, particularly man-made fibers, and technical textiles. 

Furthermore, India's demographic factors, such as an expanding purchasing power and a modernizing fashion sense, contribute to the growth of the sector. In fact, India is ranked as one of the top destinations for retail investments among emerging markets.

Challenges and Opportunities in the Indian Denim Sector

Despite rapid growth in the Indian denim manufacturing industry in recent years, there are still challenges to overcome.

Technological expertise remains an issue, and the "Make in India" initiative must provide specific support to the indigenous denim industry for it to be successful. Integration of technology and capacity building is crucial to increasing fabric production, both for domestic consumption and exports.

The Role of the "Make in India" Initiative in Denim Manufacturing

The "Make in India" initiative holds immense potential for the Indian denim industry. Its vision has the power to transform the industry's perception and increase India's contribution to the global denim market. 

Continual Growth; To realize this vision, the denim manufacturing sector needs supportive mechanisms and effective implementation. 

Once these are in place, India's domestic denim market and its export capabilities will become unparalleled.

India's Position in the Global Textiles and Garment Market

India's affordability in terms of raw materials and labor, advancements in textile technology, and the "Make in India" policy make it an attractive destination for foreign investment in the textile and garment business.

The initiative aims to not only position India as a global producer but also cater to the growing consumer base. This also applies to the global fashion industry.

From Mass Production to Handwoven Heritage; Unleashing the Potential of Indian Handicrafts By Balancing Industrialized and Handmade Textiles in Make in India.

Bridging the Gap in Global Textiles

Recognizing the potential of India's textiles and garment category, the government has allowed 100 percent foreign direct investment (FDI) in the sector. Previously, protectionist measures limited international companies from conducting business in India without partnering with local entities.

Impressive Manufacturing Capacity; While India has natural advantages in cotton production, cheap labor, and rich history, it has lagged behind other ASEAN countries such as Myanmar, Bangladesh, and Vietnam. The importance of free trade agreements that facilitate.

Latest Textile Events

05 July  2023, Mumbai

Luxury brands in India have shifted their focus to target affluent young individuals who aspire to have a luxurious lifestyle. 

Over the next five years, the Indian luxury market is projected to experience a robust growth rate of ten percent. This has attracted a wave of global brands seeking to enter the Indian market through strategic partnerships.

What all you need to know

Gen Y and Gen Z to Dominate

According to Bain & Company, by 2025, Generation Y and Generation Z will constitute 70% of the global luxury market, and India is no exception to this trend.

The Indian fashion market is primarily fueled by the trend of premiumization, along with the increasing popularity of e-commerce and a growing emphasis on private labels. Additionally, the entry of international brands has further contributed to the market's expansion. 

Notably, affluent Generation Z consumers are flocking to high-end stores, displaying a strong desire to indulge in luxurious purchases and spend significant amounts of money at present.

Luxury Brands Flock to India's Booming Economy

Recognizing the immense growth opportunities in the world's fifth-largest economy, luxury brands have been flocking to India. In the fiscal year 2022, Indian consumers spent a total of $8 billion on luxury goods, as reported by Claudia D'Arpizio, the senior partner and global head of fashion & luxury at Bain & Company. 

The 21st edition of Bain & Company's luxury study predicts a rapid growth rate of three and a half times in the Indian luxury sector until 2030, attracting an additional 35 to 40 million consumers from the middle and high-income groups. These consumers, influenced by social media, have developed a strong appetite for luxury as a lifestyle choice.

The key strategy for luxury brands is to capture these consumers at a young age and witness their growth over time. They have redefined their target audience, focusing on young consumers from Generation Z and Generation Y, as they realize that their profitability lies in catering to this demographic. 

Traditional high-end glamour and lifestyle print media are no longer the primary means of reaching this audience. 

Luxury brands have embraced social media as their new best friend, capitalizing on the ecosystem it provides. Influencers with millions of dedicated followers have become the new arbiters of what's hot and what's not.

Collaborative Partnerships

The advantage of influencers is their ability to appeal to both Generation Y and Generation Z, as the former often desires a more youthful aesthetic. 

In India, several influential figures are making a significant impact. Luxury influencers hold more sway in the luxury and fashion sectors compared to film stars. 

Dilip Kapur, the founder of Indian luxury leather accessories brand Hidesign, attests to the success of Indian luxury influencers in spearheading their brand's community-level growth.

Defining Their Unique Style

What distinguishes high-end Indian Gen Z consumers is their conscious awareness of their shopping habits, surpassing their counterparts in developed markets. 

Embraces Sustainability; A 2022 Credit Suisse Research Institute report reveals that Gen Z and millennial consumers in India are more inclined to purchase sustainable products compared to those in developed countries.

Driving Luxury Brand Success in India

However, like their Western counterparts, Indian Gen Z individuals favor the fusion of luxury and streetwear styles. This generation sees no reason why everyday life cannot be luxurious. 

Achim Berg, a senior partner at McKinsey and global leader of its apparel, fashion, and luxury group, explains that combining statement luxury pieces with fast fashion is a major trend, unlike 10-15 years ago. 

Fashion designer Manish Malhotra, who recently launched "Diffuse" aimed at Gen Z, affirms that his new line strikes a balance between couture and streetwear, which resonates with younger generations.

Shifting Away from Traditional Print Media; Social Media Becomes Key Channel; Social media collaborations have become vital for luxury brands to master and fine-tune their targeted messaging. 

Social Media Landscape

India has been ranked as the seventh most valued national brand. With a notable 32 percent increase in its brand value, India has ascended one position in the list of the most valued national brands.

They leverage the assistance of social media influencers and celebrities who embody the brand's values and are relatable to their target audience. 

Often, these influencers are not exclusive brand ambassadors, and luxury brands find it advantageous to collaborate with other luxury brands, popular high-street retailers, or fast-fashion brands to stay on-trend and remain relevant.

Latest Textile Events

08 July  2023, Mumbai

The EU Commission has introduced regulations to promote sustainability and circularity in the textile sector.

These regulations align with the EU Strategy for Sustainable and Circular Textiles, holding producers accountable for their products' entire lifecycle and encouraging sustainable management of textile waste throughout the EU.

What all you need to know

Waste reduction

The main objective of the proposal is to transform the industry by accelerating the separate collection, sorting, reuse, and recycling of textiles. This will increase the availability of used textiles, create local jobs, reduce consumer costs, and mitigate environmental impacts. 

A crucial element of the proposal is the mandatory and harmonized Extended Producer Responsibility (EPR) schemes for textiles in all EU Member States.

Under these schemes, producers will bear the costs of textile waste management, incentivizing waste reduction and the design of circular products based on their environmental performance. 

The proposal includes common EU rules for extended producer responsibility, intending to facilitate separate textile collection by 2025. 

Green financing

The funds generated by producer contributions will be used to invest in infrastructure for collection, sorting, reuse, and recycling, with an emphasis on efficient sorting for reuse and prioritizing recycling for non-reusable items. 

Social enterprises engaged in textile treatment will benefit from expanded business opportunities and a larger second-hand market.

Disruptive innovations

The proposal also promotes research and development in innovative technologies like fiber-to-fiber recycling to enhance circularity.

In addition, measures are being taken to address illegal textile waste exports by clarifying waste and reusable textile definitions and ensuring environmentally sound waste management during exports through forthcoming waste shipment regulations.

The revision of the Waste Framework Directive will separately address food waste. The proposal will undergo a review by the European Parliament and Council through the legislative procedure.

Conservation of resources

The European Commission is determined to enforce regulations for sustainable fashion by 2028 to address its environmental impact. Textile consumption ranks as the fourth-highest contributor to environmental and climate effects, following food, housing, and transport. 

Major fast fashion companies like Inditex and H&M are actively seeking ways to reduce water and energy usage and increase the use of recycled textiles. 

The Commission plans to introduce 16 legislations that will hold fashion companies accountable for their environmental consequences. 

These measures will pose challenges for fast fashion brands, as they will require waste collection or financial contributions. 

The Role of Recycling 

The EU aims for durable garments that prioritize reuse and easy recycling by 2030. Currently, the EU discards 5.8 million tonnes of textiles annually, equivalent to 11 kg per person, contributing to rapid landfill and incineration rates worldwide.

To address deceptive eco-labels, the Commission will implement regulations effective next year. 

Furthermore, EU governments have agreed to ban the destruction of unsold textiles, promoting their reuse and recycling. The ban's implementation is expected to take around six months. 

Apparel industry experts in Bangladesh believe that the country is fully equipped to cope with the European Union's decision to end fast fashion by 2030.

Growing Greenwashing concerns

The EU has recently expanded its eco-design rules for textile products and urged major companies to disclose the volume of unsold inventory they hold. The new rules mandate companies to refurbish their clothing designs to meet specific criteria, including disclosing information on the garment's shelf life and the amount of recycled materials used. 

Each reviewed garment will be provided with a digital product passport to verify its recyclability and prevent greenwashing. The rules also prohibit the destruction of unsold or returned goods.

Coordinated policy framework

To ensure conformity, Bangladesh is collaborating with brands like H&M, M&S, and G-Star. Ziaur Rahman, Regional Country Manager for H&M-Bangladesh, Pakistan, and Africa, expresses support for the European Commission's efforts to establish a coordinated policy framework and a level playing field. 

Rahman emphasizes the importance of collaboration between local authorities and brands to enable the transformation of the entire industry.

BGMEA vision 

Bangladesh apparel manufacturers have renewed their vision to align with international strategies. 

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) unveiled their renewed vision, which includes reducing greenhouse gas emissions by 30% by 2030, increasing the use of sustainable materials by at least 50%, and reducing the blue water footprint by 50%. 

The sector also aims to reduce energy consumption by 30% and use at least 20% renewable energy. Additionally, apparel manufacturers plan to invest $1 billion in sustainable communities, ensure complete sustainability in data reporting, increase the number of green factories by 80%, and improve production efficiency by 60%. 

The BGMEA is working with the European Commission and the Circular Fashion Partnership (CPF) initiative, funded by P4G, to achieve a long-term transition to a circular fashion.

Circularity

The recent decision by the European Parliament to ban the destruction of usable surplus stock and returned goods, combat aggressive and false advertising, and introduce reduction targets for material and consumption footprints aligns with the European Commission's Strategy for Sustainable and Circular Textiles. Stakeholders commend the parliament's actions and urge the European Commission to develop a robust plan for managing and reducing clothing waste in the EU. 

Companies are encouraged to take responsibility for their textile waste, including supporting waste management efforts in countries like Ghana and Kenya that receive excessive amounts of second-hand clothes from Europe. 

Experts emphasize the importance of the textile industry adhering to social and environmental rights and call for a swift ban on destructive practices across all product categories. 

They urge the European Commission to embrace the parliament's ambition by establishing binding reduction targets for the EU's material and consumption footprints.

Latest Textile Events

06 July  2023, Mumbai

The European Union's implementation of new ESG laws necessitates that apparel brands disclose extensive information about their supply chains, including supplier names, working conditions, and environmental impact. 

What all you need to know

New ESG Laws Drive Supply Chain Transparency

Failure to comply with these laws carries significant penalties, making it crucial for brands to ensure ethical sourcing and manufacturing. This requires full visibility into operations, which can also confer a competitive advantage.

However, the textile supply chain is intricate, involving multiple players in sourcing, manufacturing, and distribution. This often leads to information silos, hindering executives' ability to respond swiftly to disruptions. The pandemic has underscored the importance of supply chain visibility, as even minor disruptions can have far-reaching consequences. 

Brands that recognize the significance of visibility at every stage of the supply chain can enhance agility, and resilience, and avoid major ESG violations.

The Triple-A Supply Chain: Agility, Adaptability, and Alignment in a Globalized World

In today's supply chain landscape, achieving optimal performance goes beyond mere speed and cost-efficiency. The most successful supply chains embody the principles of agility, adaptability, and alignment. 

This concept, known as the triple-A supply chain, has received significant attention in both academic and trade literature and has been widely integrated into various supply chain management curricula.

Global village

As the world becomes increasingly globalized and interconnected, supply chains have grown more complex and interdependent. This heightened complexity has made it challenging to maintain the necessary visibility required for effective management. 

As a result, leaders worldwide have had to adapt their managerial approaches to cope with these changes and ensure their supply chains remain efficient and resilient.

Growing ESG concerns

Moreover, the interconnectedness of diverse stakeholders in the supply chain has given rise to unforeseen environmental and social concerns. Navigating these relationships and their potential impact on the supply chain has become a crucial aspect of modern supply chain management. 

In this context, Professor Lee's emphasis on the triple-A supply chain remains highly relevant and significant.

To ensure ethical sourcing and avoid penalties

Improved supply chain visibility not only helps prevent ESG violations but also offers significant benefits for apparel brands. It enables informed decisions regarding inventory management, product development, and logistics.

To address the challenge of limited visibility, technology solutions such as production tracking software and digital quality management and inspection tools are available. 

Brands can utilize these solutions to closely monitor global suppliers, maintain constant communication, establish safeguards and approvals, and receive timely updates on all activities. Technology solutions offer solutions to help achieve.

Benefits of Agile Methodology 

Achieving agility and resilience in supply chains relies heavily on having visibility. Resilient supply chains demonstrate the required agility and responsiveness to effectively sense, predict, and respond to changes, especially during turbulent times. 

Within these resilient supply chains, incorporating an agile methodology into distribution or wholesale operations yields numerous advantages. 

Enhanced Supply Chain Visibility

By establishing enhanced visibility throughout the entire supply chain, organizations can anticipate and proactively address potential disruptions before they escalate into significant problems. 

Low Resilience Levels in Supply Chains; According to a recent survey conducted by Gartner, only 21% of respondents currently possess a highly resilient network, indicating that they have both good visibility and the capacity to quickly adapt sourcing, manufacturing, and distribution activities. 

Prioritizing Resilience; This suggests that increasing resilience will become a prioritized goal for many organizations as they navigate through the ongoing crisis.

Pathbreaking

In terms of corporate citizenship and ESG performance, sportswear brand Nike has recently ranked first in 3BL Media's evaluation of the top corporate citizens in the United States. 

The evaluation assessed the environmental, social, and governance (ESG) transparency and performance of the 1,000 largest publicly traded U.S. companies.

Triple Bottom Line

The textile sector faces a complex landscape of conflicting sustainability reporting frameworks and standards. ESG, often referred to as the Triple Bottom Line represents a sustainability tripod that companies must prioritize in addressing supply chain ESG concerns and taking actionable steps towards achieving sustainable goals. 

The sector is responding to growing regulatory compliance and government actions, driven by conscious and evolving end-users.

Given the textile sector's heavy environmental impact, it is no surprise that it is considered one of the biggest polluters. 

With increased global attention to climate change, incorporating ESG principles into core business strategies has become crucial for companies. 

Competitive edge

Doing so enhances credibility, reputation, and competitive advantage. ESG factors such as carbon emissions reduction, renewable energy use, and fair labor practices help mitigate the sector's negative impact on the environment and society. 

In making a sound business case, environmental, social, and governance (ESG) considerations are paramount for business and investment decision-making.

Moreover, ESG factors serve as a robust yardstick for evaluating a firm's/project's performance and risk. In many instances, investors prioritize environmental issues over conventional business metrics, highlighting the importance of ESG in investment decision-making.

Supply chain visibility brings benefits beyond ESG compliance

A shifting approach towards result-based financing, focusing on green growth, has become the new norm. The complex landscape of conflicting sustainability reporting frameworks and standards that guide businesses and investors in ESG disclosure may become more apparent as awareness and regulatory oversight increase.

According to McKinsey & Company, achieving sustainable goals is a comprehensive organizational challenge that often requires product portfolio transformation. Therefore, organizations/companies must prioritize supply chain ESG concerns.

Investors prioritize ESG considerations

ESG investing surges as companies incorporate sustainable goals; ESG investing raises concerns as well. 

Bloomberg reports indicate that investors poured around $120 billion into ESG ETFs in 2022, marketed as comprising companies with a strong and credible ESG performance history. 

This figure is projected to reach $1 trillion by 2025 as investors seek to mitigate risks associated with ESG disputes and potential claims.

In conclusion

In today's globalized and intricate supply chain landscape, the principles of agility, adaptability, and alignment play a vital role in ensuring the success and sustainability of supply chain operations. 

Leaders and managers must continuously strive to optimize their supply chains with a focus on these key factors to stay ahead in an ever-changing business environment.

Latest Textile Events

03 July  2023, Mumbai

European Parliament Takes Bold Steps; In a decisive move to combat the detrimental effects of the "take, make, dispose" model on the environment, health, and economy, the Environment Committee of the European Parliament has made its stance clear. 

What all you need to know

Over a year ago, the committee proposed a regulation to establish eco-design requirements for sustainable products, aiming to replace the current focus solely on energy-related products. 

Now, with an overwhelming majority of 68 votes in favor, 12 against, and 8 abstentions, the committee has adopted its position on revising the EU's eco-design framework.

New product passports 

The adoption of this report in July 2023 will mark a significant milestone in Europe's journey toward a circular economy. The report will provide guidelines for the European Parliament's negotiation roadmap, facilitating directives and dialogues with individual European nations to bring about the necessary legislation. 

Members of the European Parliament (MEPs) emphasize the importance of easily accessible and comparable product passports online, enabling consumers to make informed choices. The report also recommends a ban on the destruction of unsold textiles, footwear, and other products, one year after the law's implementation.

Aim to promote transparency and longevity in the fashion industry

Under the new framework, manufacturers will be prohibited from setting product lifetime limits through design features. They will be required to provide software updates, spare parts, and accessories for an appropriate period, ensuring product longevity for the benefit of both the planet and consumers' finances. 

Every product should be easily repairable, and repair guidelines must be readily available. 

Mandatory product passports will provide transparent, authentic, and updated information, allowing consumers and businesses to make informed decisions, facilitate repairs and recycling, and increase awareness of the environmental impact of their purchases.

Circular Economy Practices Drive Sustainability

In response to the pressing need for ecological responsibility, businesses across various sectors have embraced sustainable supply chain practices, aiming to minimize the unintentional environmental damage caused by manufacturing and purchasing processes. 

Alongside this, the concept of circular economies has emerged as a powerful driver of environmental sustainability, emphasizing innovative approaches that harmonize ecosystems with economic growth.

Integrating Ecological Considerations into Supply Chain Management

This paper conducts a systematic literature review, focusing on four key themes: drivers, barriers, practices, and indicators of sustainable performance within the textile and apparel industry's adoption of a circular economy. 

While this industry plays a crucial role in employment and economic growth, it has also gained notoriety as one of the most polluting sectors globally. However, positive changes are underway as the industry embraces sustainability norms to reduce its environmental impact and improve working conditions.

Key themes

To achieve these objectives, the textile and apparel industry is implementing new technologies and processes to minimize waste, water usage, and carbon emissions. 

Ethical sourcing and fair labor practices are also gaining increased attention. As the industry transitions toward a circular economy model, the focus is on minimizing waste generation and maximizing resource efficiency through strategies like recycling and reusing materials.

Minimizing Environmental Impact

Through the adoption of circular economy practices, the textile and apparel industry demonstrates its commitment to innovation and reshapes its role as a promoter of sustainability. 

This transformation is critical not only for mitigating environmental damage but also for ensuring the industry's long-term viability. 

By fostering collaboration and prioritizing sustainable performance, the industry paves the way for a future where ecological concerns take center stage in decision-making processes.

Sustainability reporting standards protocol

MEPs also urge the Committee to prioritize specific product groups in its first working plan, including iron, steel, aluminum, textiles (especially garments and footwear), furniture, tires, detergents, paints, lubricants, and chemicals. 

Economic operators will be required to report the number and percentage of products discarded, along with the reasons, thereby enabling the Commission to identify products for a potential destruction ban. 

Furthermore, the International Sustainability Standards Board (ISSB) has developed global sustainability reporting standards that will become mandatory in various countries from January 1, 2024.

These standards will measure companies' protection against environmental risks and other sustainability issues, including labor practices.

Conscious consumerism gains traction 

The rise of sustainability in the fashion industry has been a long time coming. The movement gained momentum after disastrous events, such as the Rana Plaza collapse in Dhaka in 2013, highlighted the harsh realities of the textile and apparel industry. 

Consumers became more conscious of the provenance of their garments, and sustainability and ethics-driven consumers emerged. 

These consumers understand the impact of climate change and the consequences of a wasteful consumption culture, leading to a shift in the narrative from "fast fashion" to "less is more."

Fashion industry adapts to changing consumer demands 

Today, approximately 85% of consumers are aware of their behavior's effect on the planet, with 34% willing to spend more on sustainable and ethical products. 

The fashion industry has taken notice, with initiatives like the Horizon program supporting young 

European entrepreneurs in building sustainable and ethically sourced businesses.

However, there remains a dilemma for consumers, particularly amidst a recession, as they strive to balance their ethical values with the need to survive rising prices.

The sector embraces innovation for a more sustainable future

While fast fashion continues to dominate the market linking circular economy priorities with social benefits such as fair wages, and good working conditions, augmented by transparency in business practices, may open new business opportunities for the apparel and textile sectors.

Latest Textile Events

07 July  2023, Mumbai

US Readymade Garment Imports Drop by 11.86% in Early 2023

The US import of readymade garments from around the world declined by 11.86% to $13.21 billion in the first two months of 2023 compared to $14.99 billion in the same period last year, according to the US Department of Commerce's Office of Textiles and Apparel.

Trigger point

The decrease in imports is attributed to a combination of factors, including a slowdown in the economy due to the Russia-Ukraine war, high inflation, and interest rates, leading to reduced consumer spending. 

As a result, imports are expected to grow slowly in the coming months.

US apparel imports have experienced a remarkable 27.4% growth in value in 2021 compared to the previous year, driven by a strong US economy and robust consumer demand. This growth surpasses the rebound seen after the 2008 global financial crisis, which was only 13%.

It is anticipated that consumption will gradually recover and reach pre-pandemic levels in the coming years, with a projected value of US$2,007 billion by 2025.

China and Vietnam are the top two importers in the US market, with 21.08% and 18.31% shares, respectively. 

However, China's import of apparel to the US decreased by 29.65%, and Vietnam's readymade garment imports fell by 10.62% in the same period.

Growth faces headwinds

Bangladesh, Indonesia, and Cambodia also experienced declines in their apparel imports to the US, while India's readymade garment exports to the US market grew by 0.41%.

In the European Union (EU), apparel imports decreased by 2.03% in the first two months of 2023 compared to the same period last year. China remained the top supplier with a 26.27% share, but its imports to the EU fell by 13.11%. Bangladesh's imports increased by 5.47% during the same period.

The average price of imported garments in the EU increased, with varying price hikes among different countries. 

Bangladesh saw an 8.75% year-on-year increase in the unit price of garment items, while China had the lowest price hike with 3.97% and Indonesia had the highest with 22.97%.

Dynamic situation

The global market for apparel imports is constantly evolving, and the EU's imports highlight the need to adapt to changing economic conditions.

The US experienced a decline in apparel imports in April 2023, with China's share reducing by 5% since 2021 and India's share increasing by 2%. However, apparel retail sales in the US showed a slight improvement in May 2023.

Similarly, the UK and EU saw decreases in apparel imports, with China and Bangladesh being the top suppliers. The UK showed some diversification in its buying basket, while the EU's diversification was relatively less.

Indian diary

Indian apparel exports continued to decline, with May 2023 exports estimated to be 14% lower than in May 2022. The industry is concerned about the impact of geopolitical events and cautious spending in the EU and US markets.

India's textile and readymade garment exports, as well as gems and jewellery exports, have been declining in recent months, affecting these labor-intensive industries. 

The country's ambitious target of increasing exports to $100 billion in the next five years may be challenging to achieve.

The cotton yarn sector in India has faced challenges due to high prices and import dependency, affecting spinning mills and the knitwear sector. The slowdown in the US and EU markets has also impacted Asian exporting hubs like Tiruppur in India.

The EU

EU Apparel Imports Dropped by 7.62% in Early 2023, Vietnam and India Thrive EU apparel imports from the world experienced a significant decline of 7.62% during January-April 2023, reaching a total of US$29.83 billion.

The number of clothing imports also saw a steep downturn of 15.45%.

Winners and Losers in EU Apparel Imports

Among the top ten sourcing countries for EU apparel, Vietnam and India demonstrated positive growth, while imports from other countries declined notably.

Bangladesh: Decline in Imports

In terms of EU apparel imports from Bangladesh, there was a 6.25% decrease in dollar value, amounting to US$7.06 billion from January to April 2023, compared to US$7.53 billion during the corresponding period in 2022. The number of imports from Bangladesh also declined by 12.48% during this period.

China and Turkey:

Decrease in Imports EU imports from China witnessed a dip of 17.07% in dollar value and 21.05% in quantity. Similarly, during January-April 2023, the EU's imports from Turkey, the third-largest apparel source, declined by 13.68% in value and 24.66% in quantity.

India and Vietnam:

Slight Growth Despite Quantity Decline In contrast, the EU's imports from India and Vietnam experienced slight growth of 0.45% and 3.41%, respectively, in value terms. However, imports from both countries declined by 8.17% and 7.26% in quantity, respectively.

Decline in Imports from Other Sourcing Countries

Simultaneously, the EU's imports from other top sourcing countries, such as Cambodia, Pakistan, Morocco, Sri Lanka, and Indonesia, decreased by 5.59%, 7.52%, 16.61%, 17.16%, and 7.99%, respectively, in value terms.

Unit Price Analysis

Analyzing the unit price (USD value/kg), the EU's cumulative unit price of imports from Bangladesh increased by 7.12% (from US$16.98 to US$18.19). This rise reflects higher raw material and production costs, signaling progress toward the higher price segment. Average unit prices of imports from other countries also experienced an upward trend during the mentioned period.

The State of Fashion 2023: Resilience in the Face of Uncertainty

The seventh annual State of Fashion report, jointly presented by The Business of Fashion and McKinsey & Company, delivers a sobering outlook for the fashion industry in 2023. 

The report highlights a forthcoming global slowdown, attributed to macroeconomic tensions and a decline in consumer confidence, which threaten to erode the gains made in 2022. Moreover, a worldwide recession looms over the fashion industry in the coming year.

Global Slowdown and Recession Expected in Fashion Industry

As the industry grapples with these challenges, inflation emerges as the primary concern. However, opportunities lie in exploring down-cycle exposure and promoting sustainability. 

Fashion executives are anxiously looking toward 2023, as the negative effects of deteriorating macroeconomic and geopolitical conditions in the latter half of 2022 continue to cast a shadow over the industry.

Prognosis

According to the BoF-McKinsey State of Fashion 2023 poll, an overwhelming 85% of fashion executives believe that inflation will continue to pose challenges in the market. 

Additionally, 58% of these executives express concerns about the fashion sector being adversely affected by the energy crisis and disruptions in the supply chain resulting from geopolitical unrest, particularly the ongoing conflict in Ukraine.

In the face of these circumstances, the fashion industry is expected to witness the return of dichotomies that have historically shaped the business. 

McKinsey projects a global sales growth of 5 to 10 percent for luxury items, while the remainder of the industry may experience growth rates ranging from -2 to +3 percent in 2023.

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05 July  2023, Mumbai

On October 4, 2019, Japanese retailer Uniqlo opened its first store in India, at New Delhi’s Ambience Mall, a new milestone for the company in what it believes will be one of its most important markets in the world.

The India launch also marked the debut of Uniqlo’s concept of LifeWear - apparel that comes from the Japanese values of simplicity, high-quality, and longevity, made for everyone, everywhere.

Today, Uniqlo has nine stores in India, with seven in Delhi-NCR and one each in Chandigarh and Lucknow. Mumbai and Bangalore stores are next on the list.

India to be the biggest South Asian production hub

Bangladesh is one of its most important manufacturing hubs, Uniqlo is now planning to set up its second South Asian manufacturing hub and has chosen India specifically for its domestic market which represents a huge growth opportunity for the brand.

USP; While the Bangladesh manufacturing hub follows the export model as do the current Indian ones, the Uniqlo manufacturing hub in India will follow the domestic sales model to support the Japanese label in its expansion across the country.

The brand is serious about Indian consumers as they see clothing preferences in India are aligning with international trends which is an advantage for Uniqlo to leverage. The new partnership will be a team of 20 Indian manufacturing houses.

India was the dormant but now active choice

Experts say, despite its clear visibility in terms of availability of raw materials, skilled labour force, manufacturing infrastructure, and relatively lower energy costs, India has been overlooked by most international fashion brands as the preferred partner as they are fully aware of the risk exposure.

First hand; Reiterating the brand’s strategic move, CEO, Tadashi Yanai says, Uniqlo’s ambition is to be the best retailer across India. The company is set to make a high-value investment to ensure local manufacturing partners are able to deliver as per Uniqlo’s standards.

It must be noted that globally, Uniqlo does not own a single manufacturing unit but partners locally. Called ‘Core Partner Factories’, Uniqlo has 227 factories in China, 54 in Vietnam, 33 in Bangladesh, 13 in Indonesia, and 16 factories in India and Japan among several other locations.

Currently, Uniqlo’s core partner factories in India include Shahi Exports, Brandix Lanka, Tangerine Designs, Maral Overseas, Shingora Textiles, Silver Spark Apparel, SM Lulla Industries Worldwide, and Penguin Apparels.

The Uniqlo Strategy for success in India

Surprisingly, when Uniqlo launched in India, it did not compete with high-street Zara and H&M. Instead, adding a whopping 25 percent to their pricing, worked. Uniqlo India reported a profit of Rs 21.4 crore for the fiscal year ending March 2022 compared to a loss of Rs 36.1 crore in the previous financial year.

The Japanese retailer’s India sales jumped 63 percent year on year to Rs 391.7 crore in 2021-2022. The other part of the strategy was deep penetration of a certain area, known as the cluster approach. Again, it worked as other regions wait in anticipation.

Fast Retail’s performance upbeat

Uniqlo’s parent company Fast Retailing has been doing consistently well across the globe.

As per its first-half results, the company said its revenue was  $10.2 billion, and operating profit rose to $1.53 billion, due to its strong performances from operations in several regions, including India where it generated a significant increase in both revenue and profit.

Uniqlo also stated regions like India have reported significant revenue and profit gains as they enter a full-fledged growth phase.

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01 July  2023, Mumbai

Fashion runways are witnessing a revival of smart and durable workwear styles in response to the increased demand for practical, comfortable, and inclusive fashion choices in the post-pandemic era. 

Workwear, including coveralls, uniforms, and overalls in denim or canvas with practical features and a multitude.

An overview

Revival of utilitarian workwear trends, driven by comfort and inclusivity, emerges post-pandemic, propelled by celebrities and Gen Z influencers.

High-tech innovations and sustainability shape its future.

The Rise of Utilitarian Clothing

Utilitarian clothing, encompassing workwear, army wear, sportswear, and streetwear, has expanded its presence in everyday fashion, thanks to the normalization of dressing-down days.

The influence of punk, skinhead, and football hooligan subcultures during the 80s has contributed to the ongoing trend of workwear clothing.

From Trendsetting Celebrities to Everyday Wardrobes

Sales Soar in Post-Covid Era; The comfort-focused dressing habits that emerged during the pandemic have significantly boosted workwear sales, particularly in the US market. This fashion culture has now gained popularity across Europe and other countries, finding its place in various casual settings.

Classic workwear pieces like overalls, cargo pants, jeans, and jackets are highly adaptable to different body shapes and sizes. Celebrity endorsements from icons like Rihanna, Kaia Gerber, Sydney Sweeney, and former US President Barack Obama have further popularized workwear in everyday life. 

Additionally, Generation Z and millennials are leveraging platforms like Instagram and TikTok to promote this fashion segment.

Workwear Redefines Changing Work Culture

Workwear fashion in India has witnessed a remarkable resurgence, combining practicality and style. This revival echoes the evolving work culture in the country, where traditional formal wear has given way to fashionable yet comfortable attire. 

The driving force behind this trend is the growing demand for workplace comfort and functionality. Indian workwear has become incredibly versatile, offering a wide array of styles and fabric choices. 

Spearheads the Fashion Culture

In a fascinating turn of events, many celebrities and individuals have embraced workwear as their go-to style. For instance, Timberland's renowned steel-toe work boots, originally designed for industry professionals, are now worn by a wide range of people, from plumbers to software engineers.

Timeless workwear staples such as Dickies' Classic Bib Overalls, known for their multiple pockets, have made a comeback and become a fashion statement for men in various casual settings.

Carhartt's famous hats and beanies, cherished for their quality, warmth, and personal style, have transcended their original purpose and are now worn by people of all ages. High school girls, in particular, adore them in vibrant rainbow colors.

Both Dickies and Carhartt, as century-old brands, have experienced a remarkable resurgence in the fashion scene, reimagining their image in the post-pandemic years.

Projections

According to a Grand View Research report, the global workwear market was valued at $16,773.3 million in 2021, and it is projected to grow at a compound annual growth rate (CAGR) of 5.6 percent from 2022 to 2030.

The sale of workwear is further propelled by sportswear brands. With their emphasis on durability, flexibility, and comfort, global sportswear players like Nike, Marmot, Puma, Adidas, Patagonia, Under Armour, Burton, ASICS, Columbia, and The North Face are integral to the workwear fashion movement.

Fashion Meets Function

Wearing well-fitted workwear is now considered a reflection of professionalism, especially in the manufacturing and corporate sectors. This demand is expected to continue driving the product's popularity.

While Kanye West and Julia Fox showcased workwear during New York Fashion Week, they were not the initiators of this trend. 

The rise in workplace accidents and fatalities worldwide has not only emphasized the need for appropriate work apparel and footwear but also given it a modern fashion twist, making it suitable for both casual settings and runway shows.

Denim or canvas coveralls, uniforms, and overalls, featuring numerous functional pockets and intricate details, are now gracing European fashion runways alongside women's evening gowns and men's tuxedos.

The Future of Workwear

High-Tech Innovation, Inclusivity, and Sustainability Shape Fashion Trends. 

The rising popularity of high-tech innovative outfits, designed for a perfect fit rather than a one-size-fits-all approach, as a fashion statement, presents immense opportunities for brands to thrive in the future. 

Workwear's resurgence is driven by a generation's embrace of gender fluidity, body positivity, authenticity, and environmentally friendly design choices. 

Embracing this trend, both men and women in India have embraced the blend of practicality and fashion, redefining their professional wardrobes to suit the changing times.

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