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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30 November 2023, Mumbai

Beyond Economics: From Smart Textiles to Sustainable Practices

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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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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. 

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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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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.

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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

Latest Textile Events

25 November 2023, Mumbai

The Men's Underwear Index (MUI), a barometer of the country's economic health, is charting a downward trajectory.

Page Industries, the proprietor of the Jockey and Speedo brands in India, witnessed a revenue and volume decline of 8.4% and 8.8%, respectively, in the September quarter.

Trade dynamics

To manage excess inventory, many brands are resorting to unsustainable business practices.

The market, valued at $6.3 billion and accounting for 9% of India's overall fashion retail segment, remains largely disorganized and fragmented.

The demand slowdown is attributed to a high base, particularly in the athleisure wear segment.

Additional points

Consumers have curtailed spending on non-essential apparel items since Diwali last year, owing to factors such as inflation, rising interest rates, job losses in sectors like startups and IT, and an overall economic deceleration.

Sluggish consumer demand and bloated inventories continue to be a great concern.

The market is also facing stiff competition from digital-first brands like XYXX, Damensch Almo, Bummer, and Freecultr, which entice consumers with attractive pricing.

Five key insights :

1. MUI down: The Men's Underwear Index (MUI) is declining, reflecting economic weakness.

2. Page Industries' decline: Page Industries, a major underwear brand, saw revenue and volume drop.

3. Unsustainable practices: Brands are resorting to unsustainable practices to manage excess inventory.

4. Fragmented market: The men's underwear market is largely unorganized and fragmented.

5. Demand slowdown: Demand is slowing down, particularly in athleisure wear.

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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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24 November 2023, Mumbai

The Value Fashion Market in Small-Town India

The value fashion market in small-town India is booming, fueled by rising incomes and consumer expectations. Zudio, the flagship brand of Trent, is a prime example of this trend, facing stiff competition from other prominent retailers.

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Zudio's Rapid Growth and Strategy

NZudio has experienced rapid growth since its launch in FY'17, expanding to over 350 standalone stores and generating revenues of Rs 3,540 crore. 

The brand's franchise-owned company-operated model has been instrumental in reducing inventory costs, attracting the attention of national retailers like Yousta (Reliance Retail), Style-Up (ABFRL), and InTune (Shoppers Stop) who have adopted a similar strategy.

Market Analysts' Forecast

Market analysts from Motilal Oswal Financial Services predict a steady 6 percent CAGR growth for the value fashion segment from 2020 to 2026. 

However, with rising disposable incomes and favorable demographic trends, the growth rate is expected to surge to a remarkable 23 percent CAGR.

Unorganized Dominance and Regional Retailers' Lag

Despite the segment's growth potential, unorganized retailers still hold a dominant position, accounting for nearly 57 percent of the market. 

Regional retailers have yet to make a significant mark in this domain.

5 key insights :

1. Booming Market: Rising incomes and consumer expectations drive growth.
2. Zudio's Success: Rapid growth, 350+ stores, Rs 3,540 crore revenue.
3. Franchise Model: Inventory cost reduction, national retailer adoption.
4. Market Forecast: 6% CAGR growth, potential for 23% CAGR.
5. Unorganized Dominance: Regional retailers' presence limited.

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