Recovery in the textile and apparel sector in Q2 FY 21 is likely to be led by increasing demand in the domestic and overseas market, says India Ratings and Research (Ind-Ra) report. It estimates volumes in both segments will reach 80 per cent over September 2020. Both man-made fibers and cotton segments will benefit from low raw material prices in the third quarter. Ind-Ra will continue to monitor demand recovery in domestic as well as export markets of the US, Europe and China.

Topline to decline by 15 per cent

As per Ind-Ra, in Q1 FY21, cash flows in the textile sector were impacted by weak profitability and supply chain disruptions. Though the moratorium announced by the Reserve Bank of India (RBI) under COVID-19 relief package provided adequate liquidity support, the agency expects topline of textile players to decline 15 to 35 per cent year-on-year(Y-O-Y) and operating profits to decline 20 to 50 per cent Y-O-Y.

In August 2020, textile prices across the globe staged a broad recovery from the lows of April-May 2020. International cotton prices (US) recovered by 4 per cent month-on-month (M-O-M) in August 2020 while Indian cotton prices increased by 5 per cent M-O-M. Plant utilization of pure man-made fiber and yarn manufacturers was badly impacted. Prices of fiber and yarn remained steady though discounts were offered to boost sales. Cotton yarn and blended yarn prices largely remained flat, despite demand recovery. Moreover, cotton season procurement was at about 10 per cent higher prices with operating utilizations still remaining below optimum levels.

Discounts, loans bring relief

Quick supply restoration led to a decline in fabric and apparel prices in August 2020. From July-August 2020, industry players not only offered discounts to boost sales but also generated internal liquidity. They were relieved by the disbursement of COVID-19 bank loans, promoter-led infusions and the ability of apparel prices to remain modest in 2HFY21.

From June-July 2020, readymade garment exports recovered significantly, says Ind-Ra. Supported by restocking at global retailers and global sector consolidation, order book buildup remained strong in August 2020 Large apparel and readymade garment manufacturers were able to resolve labor mobility and availability concerns as they benefitted from the shift in market share to India, it adds.

Though COVID-19 has moderately impacted the global demand for home textiles , the US-China trade war has provided a strong impetus to home textiles exports from India. This demand for home textile exports is likely to sustain in 2HFY21 at healthy levels, says Ind-Ra. The agency also expects Indian players to increase their market share in terry towels and bed linens.

Brands as well as online fashion and beauty marketplaces Myntra and Nykaa expect a strong rebound during the festive season after a weak first half impacted by the COVID-19 pandemic. Myntra expects sales to double during the festive season compared to last year. The retailer is working towards scaling up festive season to two times that of last year. Marketing initiatives will be led by celebrities having a wide audience appeal cutting across regions.

Nykaa expects to grow 50 per cent on n omnichannel basis. Its fashion category is expected to become a Rs 500 crore business at an MRP or retail price level and grow by 6-7 times. The retailer expects a strong pickup in its makeup category, especially colour cosmetics.

In terms of brands, MamaEarth expects sales to grow three times over last year. It has been building stocks over the last four weeks. Though facing supply chain challenges, the brand expects to have enough stock by early October. Ethnic brand Raisin plans to launch more than 40 styles that work for intimate gatherings and festive celebrations. The brand expects online sales to contribute 35-40 per cent of its business.

A report by KPMG and Retailers Association of India indicates, there will be increased adoption of online shopping, contactless payments and consumers placing safety over price, range and convenience post COVID-19. Shoppers will return to physical stores over the next few months as India hits peak festive season. Hence, retailers should shift focus to in-store safety and convert existing businesses to delivery-oriented ones, apart from tying up with delivery and logistics service providers in order to provide direct-to-home services.

According to the report entertainment, physical shopping, dining out could see a surge with gradual opening up of physical marketplaces. Harsha Razdan, Partner and Head, Consumer Markets and Internet Business, KPMG, though there will be uptick in demand, it will restricted to categories such as durables and apparel. According to him, demand will taper off again in January till the vaccine comes, and the job situation improves.

Kumar Rajagopalan, CEO, RAI, says an assurance of no localized lockdowns will fast-track recovery of sales during the upcoming festive season to almost the same levels as last year or perhaps just 20 per cent short of last year’s figures. This will prompt offline retailers to expand their direct to consumer reach, by upping investments online and expanding omni-channel reach.

As Redseer Consulting, around three lakh jobs are likely to be created by various e-commerce and logistics companies during this year's festive season. Most of these jobs are temporary, created by platforms to help them prepare for surge in orders during the various sale periods. However, about 20 per cent of these temporary workers are retained at the end of festive season, says RedSeer.

About 70 per cent of these three lakh jobs are expected to be offered by online platforms Ecomm Express and others. Around 60 per cent of these jobs will be in the logistics sector, while the remaining will come from warehousing and customer service sectors.

RedSeer expects daily average e-commerce shipments during festive days to jump by 1.8X jump to 22 million as compared to last year. It expects the total shipments during festive sales for the first event to grow by 60 per cent y-o-y (year-on-year) over CY2019 (calendar year) to reach 150 million.

According to the firm, the rise of Tier II+ shoppers will drive an increase of shipments as the purchase value of these consumers will be lower than their metro/Tier I counterparts.like Amazon and Flipkart, while the remaining will be by logistics players like

According to Redseer Consulting, the number of online shoppers in India will nearly double to around 50 million during the festive season this year.

This year’s bonanza sales will gain from the COVID-driven adoption among shoppers from Tier II and III cities, said a RedSeer report. The rise of new models like video- and WhatsApp-based shopping will become mainstream as companies try to serve their clients better

Given the expected festive sales performance, RedSeer estimates e-commerce in India to reach $38 billion (Rs2.8 lakh crore) in sales for all of 2020, up 40 per cent year-over-year.

During the first set of festive sales days, India’s e-commerce sector is expected to clock $4 billion in gross merchandise value (GMV), the Bengaluru-based firm estimates.

Lower value, long-tail categories will do well. Fashion is expected to pick up as activities and social gatherings increase after a lull for almost six months due to the raging pandemic. Home and home furnishings will also do better than previous years due to the high demand for upgrading work-from-home and study-from-home equipment.

A survey by the Retailers Association of India (RAI) has revealed, in August Indian retailers witnessed a marginal recovery in business compared to July, even though localized lockdown in some states during Unlock 3.0 phase interrupted the growth of retail in the country.

The Survey say, retail sales shrank 52 per cent from a year earlier in August. The only category that showed a significant improvement in August was consumer durables, though their sales were still 23 per cent less than a year earlier. Sales in the food and grocery category declined by 46 per cent, footwear by 47 per cent, apparel and clothing by 54 per cent, sports goods by 58 per cent and beauty and wellness by 56 per cent all recorded sales around half of August last year.

The southern region fared slightly better with a 46 per cent sales decline, followed by East with a 52 per cent decline and West & North 54 per cent decline on a y-o-y basis. Across regions, large retailers performed marginally better than medium-sized ones.

Despite unlock 4.0 orders by the Central government, local authorities in some states continue to impose partial lockdowns, which is dampening consumer sentiment and hampering recovery, the association said. It appealed to the Department for Promotion of Industry and Internal Trade and the home ministry to instruct these states to adhere to the central government’s guidelines as any shutdowns should be very carefully calibrated to ensure a balance between lives and livelihoods.

Designer Anita Dongre believes, COVID-19 has made Indian brands realize the importance of sustainable fashion production. Her company, House of Anita Dongre, sources ethically produced materials besides adopting innovative and environmentally sensitive production processes. Its 11,000-sq. mt. headquarters near Mumbai conforms to the guidelines of the Sustainable Apparel Coalition and uses natural lighting, water conservation and biodegradable packaging.

A FashionScope report from McKinsey & Company highlights, sustainability is gaining ground in India as veteran Indian designers like Rohit Bal, Ritu Kumar and Rajesh Pratap Singh are reviving forgotten local weaves besides empowering artisan communities and using earth-friendly fabrics. Delhi-based designer Gautam Gupta has introduced natural handspun fabrics crafted from banana, bamboo, coffee beans and natural silks while designer Aneeth Arora launched two new labels: Pero Recycle and Pero Upcycle, to focus on environmental conservation.

Renewed interest in eco-friendly technologies and materials

Some of the biggest Indian fashion houses are factoring in ecology as a major growth driver. There is a renewed interest amongst them for new, more eco-friendly technologies, materials and production methods such as hemp from the Bombay Hemp Co. For instance, the Aditya Birla Group’s brand Liva has launched a clothing line made from biodegradable fiber derived from wood pulp.

Similarly, leading textile manufacturer and fashion retailer, Raymond Group has launched an eco-friendly range of fabrics called Ecovera in collaboration with Reliance Industries. These fabrics are made from recycled plastic bottles using biofuels and energy efficient processes.

Likewise, the flagship company of Aditya Birla Group, Grasim Industries has launched Liva-branded Viscose Staple Fiber. This man-made, biodegradable fiber is seen as replacement for cotton in apparels, home textiles, dress materials and knit wears. Nelson Jaffery, Head-Design, Liva says, there is enhanced mindfulness amongst consumers towards eco-friendly fabrics as they seek sustainable brands and slow durable fashion.

Launched in 2018, Aslee uses bamboo, hemp and native nettle fabrics to craft hemp and bamboo T-shirts as well antibacterial socks made from 70 per cent bamboo. The company launched biodegradable bamboo face masks during the pandemic as an alternative to the single-use disposable masks.

Rise in sustainability events

Sustainability is also being embraced by event organizers like the Lakme Fashion Week, which has been promoting Indian handlooms and textiles since 2012. Fashion Design Council of India launched the concept of ‘phygital’ fashion events. Fusing the elements of physical and digital, these events help FDCI curtail expenses and tread lighter on earth. Sunil Sethi, Chairman opines, COVID-19 has catalyzed increased sensitivity towards the environment, and given fashion leaders time to rebuild a sustainable future.

Analysts expect the online market for secondhand clothes, shoes and accessories to grow post pandemic. As Tanisha Saxena, who owns a sustainable brand store, advises, millennials should buy fewer but value-driven classics that endure through time and trends. They should also make their fashion consumption more responsive towards society as well as the environment, Dongre sums up.

COVID-19 is leading to a reevaluation of the luxury business model in India. With the luxury market expected to contract 39 per cent in 2020, businesses across the country are being forced to either to adapt or perish, says latest McKinsey report. While some of these are resorting to new distribution channels, others are opting for an extension of their product lines, services and product categories.

Diversification for apparel makers

Luxury apparel and accessory makers, Dior and Loreal are making disinfectant gels at their facilities. Luxury British heritage label, Burberry has launched reusable and sustainable masks with anti-microbial technology so have designers like Anita Dogre and Shivan and Narresh. Delhi-based affordable luxury leather goods brand Damilano, is focusing on its ecommerce platform as is Ensemble which is shifting most of its offline inventory to its webstore.

While some brands are launching classic collections that last long, others are introducing smart casual collections. Besides offering private client appointments for physical store shopping, these brands are also providing personal shopping and styling sessions on Zoom or video chat.

Similarly luxe automobile makers like Lamborghini, Mercedes Benz. BMW and Tesla are shifting production to hospital ventilators, protective plexiglass shields and other medical devices. Mercedes-Benz India has launched a new e-commerce platform ‘Merc From Home’, which enables customers to purchase their favorite Benz from the comfort and safety of their home’. Pre-owned car maker, Big Boy Toyz is seeing a 75 per cent surge in its online sales.

Spurt in demand for home fitness equipment

The restriction of most fitness freaks to their homes increased demand for home fitness equipment. To explore this demand, Louis Vuitton launched a stylish range of home fitness equipment including dumbbells and skipping rope. The brand has also introduced a set of opulent playing cards under its homeware line to engage its patrons. According to McKinsey, companies that prioritized customer service witnessed a stronger rebound from the 2008 crisis. In the current scenario too, customer focus will prove to be the gamechanger.

As stores reopen, fashion brands hope to apply their e-commerce learning -- to coax consumers back to stores. Besides updating their websites, these companies also plan to add features like artificial intelligence and virtual changing rooms for a seamless online and on-site customer experience. While Raw Mango has replaced pop-ups with an online store, designer Anita Dongre uses online operations to boost her robust overseas business. Companies that built strong relationships with their online audiences may continue to hold an advantage by investing in areas that would reward them quickly. For instance, Myntra recently launched customized web pages to connect with Middle Eastern audiences.

Similarly, Tarun Tahiliani started using payment links to send invoices directly to consumers’ inboxes instead of relying solely on cart payments. As he points out, since the products offered by the brand are of higher-value, they require more customer engagement. The brand’s customers need to connect with its team to satisfy their doubts.

New ways to connect with consumers

During the pandemic, many companies learnt new ways to connect with their consumers. To reach online shoppers, Myntra revisited the ‘Myntra Fashion Superstar’ competition, first launched in October 2019. Raw Mango replaced pop-ups to reach an international audience with an online store.

One of India’s oldest multi-designer stores, Ensemble teamed up with the Baradari project to explore the impact of social issues as part of an online campaign to raise funds for the handicrafts industry. Some of the other brands hired professionals to train their internal teams to use social media and other virtual tools. Designer Masaba Gupta learnt to create an educational fashion content, while designer Monica Shah, Co-owner of couture label Jade, employs videos to engage its online audiences. These videos include Q&A sessions that make the design process or selection of a lehenga online easier.

Many designers are also using discounts to woo their price-sensitive shoppers. Brand Bodice has been able to boost sales of pared back neutrals and flowing lounge pants by offering a 20 per cent discount. The popularity of these items helped the company sustain its business through difficult times.

Luxury resorts to markdowns

Luxury and couture companies have resorted to markdowns. As times have changed, people are now willing to shop for high-value products, says Tahiliani. There is growing demand for lehengas, saris, gowns and statement dresses, in India and abroad, says designer Rahul Mishra who launched his collection Butterfly People at Paris Digital Haute Couture Week A/W 2020/21. The collection includes intricate masks and craft-heavy dresses. It also includes classic and artisanal pieces along with avant-garde and experimental silhouettes. Some brands also plan to capitalize on the upcoming festive season in India. Ekaya for example aims to tap the gifting sentiments of customers during this period to launch a range of handwoven scarves and pocket squares.

The pandemic has encouraged many Indian textile and apparel brands, including Reliance, Arvind, Aditya Birla, Donear Group, Raymond Siyaram and few start-ups to enter the market for anti-viral clothing in India. Peter England, a menswear brand from the Rs 8,743-crore Aditya Birla Fashion and Retail recently launched a range of antiviral shirts and masks. The company has launched many products across categories such as work from home collection, disposable masks, reusable cloth masks, antiviral shirts & masks and the latest offering is Neem Tulsi Collection. The company is now gearing up to launch trousers, denims, T-shirts & loungewear.

Donear Industries launched anti-viral fabrics in April this year. The group has collaborated with men's wear brand Zodiac to launch anti-viral shirts called Securo. The cost of products ranges from Rs 250/m onwards.

However, Dr C Jagadeesh, Senior Consultant -Internal Medicine, Apollo Hospital, has doubts about the use of these garments. There is not enough scientific data on whether people using these clothes get less infected compared to others, he says. According to him, it is doubtful that these fabrics are able to reduce the transmission of infectious diseases.

In turn, companies confirmed that their products are tested at various labs in India and outside and they have virus resistant properties to ensure safety by inhibiting the persistence and growth of viruses and bacteria on its surface.

Credited for launching the first edition of DFU Publications in 1989, Surendra Tulsidas Savai, President, Mumbai Textiles Merchants Mahajan, passed away on September 15, 2020. He was 81 years old. Savai was the Emirates Chairman of Mumbai Textiles Merchant & Federation of Association, Maharashtra (FAM). He remained the President of Mumbai Textile Mechants Mahajan for 30 years. He was also the Chairman, Joint Action Committee of Textile Traders Association, Director, New Piecegoods Bazar Co and Kalupur Commercial Cooperative Bank, and Trustee, Mumbai Port Trust.

Savai was also the trustee of Godiji Jain Temple Trust, Pydhonie- Mumbai as well as Motisha Jain Charitable Trust, Byculla-Mumbai. He was trustee of Mangrol & Chorwad Jain Temple Trust and Shrimad Buddhisagar Murtipujak Gurukul Jain Swetambar Sangh.

He is survived by his son Ajay, daughter-in-law Sonal, and daughters Smita and Jalpa. Due to the COVID-19 pandemic, no prayer meeting has been organized but a Zoom meeting has been arranged.

The Confederation of All India Traders (CAIT) estimates that COVID-19 pandemic has inflicted a loss of about US$253 bn (Rs 19 lakh crore) to India's retail industry in the past five-months, this is based on the estimates collected from figures received from 20 major cities in various states.

The entire retail trade, which is often called a growth engine of the economy, is pasing through its worst period in the current century and is in great dilemma never seen before. According to Praveen Khandelwal, Secretary General, CAIT, the pandemic has resulted in great turmoil for domestic trade to the extent that even after 'Unlock-4', traders across the country are "highly depressed". "The retail market is gripped with acute financial crisis as even the supplies made in November-December, the payment of which was to be released in February-March is still pending and there is no hope of its early realisation." he added.

CAIT appealed to Union Minister for Finance and Corporate Affairs Nirmala Sitharaman to advise banks not to charge any interest or penalty from traders for the time being. "If immediate steps are not taken about 20 per cent of the shops in India will have to close down their shutters and it will give rise to unemployment in the country," as per the association.