22 June 2023, Mumbai

Growth for retailers in May 2023;According to the Retailers Association of India's latest Retail Business Survey, retailers experienced a 7% growth in May 2023 compared to the same month in 2022. Jewellery and apparel were the leading categories driving this growth.

Eastern India saw an 8% increase, while South India and West India saw growth rates of 7% and 6% respectively. However, retailers in North India only witnessed a 5% growth in May compared to last year. Kumar Rajagopalan, CEO of the Retailers Association of India, noted that while moderate growth is being observed, it should be considered in light of the extraordinary growth experienced in April and May 2022.

Sales trends awaited for next quarter

The coming three months will be crucial for drawing definitive conclusions. A report by Motilal Oswal Financial Services also indicated softer demand scenarios and weak footfall in the lifestyle products segment.

Jewellery and apparel categories drive the growth

Categories such as food and grocery, quick-service restaurants, and consumer durables reported moderate growth, while sports goods, furniture, and lifestyle products saw lower growth rates.

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21 June 2023, Mumbai

Online shopping a quintessential convenience for urban lives across India has penetrated territories physical retail brands couldn’t reach earlier.

As per estimates by 2026, e-commerce in India will be worth over $200 billion and by 2027 India will have over 427 million e-commerce users.

With such unprecedented growth, it is only natural for fashion retail to take on a head start and ride this ever-growing wave and become a substantial contributor to the overall e-commerce sector.  

E-commerce fashion retailers ride on the success

Numerous fashion e-commerce websites that have mushroomed over the years including Myntra, Ajio, Kanchan Fashion, Meesho, etc, are now household names.

A Statista’s report highlights India’s fashion market will be around $14.4 billion by 2023 as fashion continues to grow since 2019 at a CAGR of 18.5 per cent. This incredible growth can be attributed to several factors, including the convenience of online shopping, attractive discounts, and a wide range of choices.

Increased access and the reach of e-commerce have eliminated geographical barriers, allowing consumers from the most remote corners of India to access the latest fashion trends. 

Fundamental tailwind

While figures indicate e-commerce is still in its inchoate stage in India, contributing only 10 per cent of the nation’s retail, there is enormous scope compared to e-commerce’s global share in retail which stands at 19 per cent and is expected to become 25 per cent by 2026.

In fact, a June 2022 retailer’s summit in Mumbai estimated fashion contributes around 12 per cent of all sales on e-commerce and this share is expected to touch 30 per cent by 2027. 

Advantages for fashion in e-commerce

The fashion retail sector experienced the taste of outreach through e-commerce wherein it had the largest swathe of the nation as its catchment area.

Fashion retail no is longer limited to urban pockets where it found profitability through physical presence. Today, fashion products are being shipped to every nook and crannies of India, places that weren’t even on fashion’s radar. 

Moreover, e-commerce has given a well-deserved platform for new fashion designers and fashion start-ups who earlier were unable to broaden their market due to operational and marketing costs involved in physical retailing. The popularity of social media that does the marketing for e-commerce has been a relatively inexpensive tool and a welcome opportunity for such designers and businesses.

Technically, today a start-up fashion house can have a similar reach as Ajio or Trends Online. 

Also, physical spaces were a barrier for a fashion brand as it put forward its inventory as its portfolio or collection is now as big as its collection thanks to e-commerce.

Intrinsic advantages

Fashion brands have the luxury of showcasing their complete inventory in the digital space. This highlights their style, sizes, and niche creations to the best advantage.

This can also be extended as a democratic platform where new brands can compete with established labels and domestic brands with international ones on an even playing field. 

What’s more, the restrictive environment of physical space can be set aside to offer convenience and a board for creative inspiration. AI has developed sophisticated software that enables digital trials at the click of a tab over the tedious physical trial of a large number of outfits in a tight changing room.

Metaverse or meta-averse?

The Metaverse provides an extraordinary canvas of a world of fashion to experiment with styles, outfits, and accessories and create individual looks. 

Overall, e-commerce’s transformative impact has created opportunities for job creation, economic growth, and investments, shaping the future of the Indian fashion industry.

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22 June 2023, Mumbai

Cautious optimism; Cautionary consumer behavior, and lackluster sales impact fashion retailers as prices rise. Retail sales have been weak, prompting early end-of-season sales. Analysts anticipate slower revenue growth of 10% this year, down from 51% in the previous year.

Softening demand currently but H2 is to pick up

Demand for lifestyle products remains soft across categories and regions, though June shows modest improvement. Retailers Association of India reports 7% sales growth in May, with moderate growth in jewelry and apparel but lowest in sportswear since the pandemic.

ICRA expects demand pressure to continue in H1, improving during the festive season.

Headwinds

However, inflationary headwinds will moderate revenue growth in FY24, with listed retail entities projected to see a 10% decline in revenue and a 5.7% drop in profit margins. Since 2022, tepid demand persisted due to high raw material costs passed to consumers.

Spring-Summer 2023 collection prices remain high due to previous cotton price increases, but cotton yarn prices are softening. Retailers offer advanced discount sales to stimulate demand and clear inventory. Footfall decreased by 7-8%, potentially due to consumers prioritizing experience-led expenses over apparel.

Consumer Spending and Overall Footfall

Consumers may be shifting their spending from apparel to experience-led expenses like food and beverages, resulting in a decline of 7-8% in overall footfall across the country.

Bottom-line

The combination of cautious consumer behavior, lackluster sales, inflationary pressures, and shifting spending patterns poses challenges for fashion retailers.

The industry expects a moderate growth rate for the current financial year and anticipates improved demand during the festive season.

Retailers are adjusting their strategies by offering discounts and managing inventory to navigate these challenging market conditions.

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19 June 2023, Mumbai

Lulu Group has unveiled its inaugural Lulu Hypermarket in Tamil Nadu's Coimbatore.

Opens Large-Scale Store  

The grand-scale store, situated in Lakshmi Mills, Pappanaickenpalayam, offers an exceptional shopping experience to the residents.

The hypermarket boasts an extensive range of products and services, including ready-to-eat food, fresh produce, electronics, beauty products, and home appliances. The Government of Tamil Nadu's Minister for Industries, Investments, and Commerce, T.R.B. Rajaa, inaugurated the store on June 14 alongside Lulu Group's members.

Expansion Plan Includes Logistics Hub   

With an investment commitment of Rs 3,000 crore, Lulu Group plans to undertake various projects in the state, such as a logistics hub and a rice mill.

Expects to Generate Employment Opportunities  

Spanning approximately 1.1 lakh square feet, the hypermarket is set to create over 5,000 employment opportunities.  

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14 June 2023, Mumbai

Several lifestyle, apparel, and footwear brands have started mid-season and flash discounting ahead of the usual end-of-season sales (EOSS). This move comes in response to weakened demand over the past two months. Normally, EOSS launches by the end of June, preceding the arrival of fresh season merchandise.

Market Exhaustion and Demand Slowdown

However, brands have opted to cut prices or will soon begin a sale period.

Brands Deviate from Traditional Schedule

The decision to discount earlier than usual is driven by a slowdown in the overall market and the desire to clear existing inventory before new stock arrives in July. The market experienced spending exhaustion, resulting in lower growth rates even for premium products. In March and April, the overall growth dipped to 6%, marking the slowest sales expansion in over 14 months, according to the Retailers Association of India.

Brick-and-Mortar Stores Compete with Online

Retailers are now strategically discounting to compete with online retailers and fulfill mandatory quality control measures, such as obtaining BIS licenses. The aim is to exhaust the current inventory and prepare for the arrival of fresh stock.

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22 June 2023, Mumbai

One of the top credit ratings agencies in India, ICRA has projected that on the back of the success of retail across the country, malls will be big beneficiaries as their trading values could increase as much as 4 to 5 percent in FY 2024. ICRA is confident malls are going to increase their rental incomes between 8 and 10 percent.

In the retail sector, jewellery and electronics will see healthy growth while food and beverages, beauty, apparel, accessories, and entertainment will continue to see higher footfalls and sales.

Malls continue fast-forward growth

The rental income of the country’s top six cities witnessed robust growth of 78 percent YOY in FY2023, even though it was on a much-lower based FY2022. This growth is at least 25 to 27 percent higher than pre-Covid times and reinforces economic growth and attitudinal recovery of consumers as they are spending more on non-essentials.

As Anupama Reddy, Vice-President and Co-group Head of corporate ratings points out, this is being driven by higher revenue shared backed by increasing retail trading values and an increase in levels of occupancy across malls.

While malls enjoyed 90 to 95 percent footfalls before the pandemic, now they attract anywhere from almost 125 to 127 percent footfalls.

Many Indian malls have been enjoying high occupancy rates and will be renewing leases at higher rates this year. ICRA has marked mall retail operators’ status as stable.

ICRA states, higher disposable income and preference for experiential shopping, especially for premium product categories, are expected to support retail malls in the medium term.

Many fashion and beauty stores are adding interactive features, such as AI-driven virtual assistants, to synergise the online and offline experience and create experiences beyond just shopping. Consumer confidence continues to recover from the historic low recorded in June 2020.

As per RBI’s Consumer Confidence Survey of May 2023, household spending was buoyant over the last year on the back of higher essential and non-essential spending. This is expected to support retail sales for the mall tenants.

How are iconic high streets faring?

The standard for exceptional shopping experience before the flood of malls took over metros and cities, the fashionable high street did not have the convenience of “all-under-one-roof” and the cool and sanitized environment of modern and plush malls.

India has had some major high streets such as Colaba Causeway in Mumbai, Connaught Place and Khan Market in Delhi, Brigade Road and Indiranagar in Bengaluru, and Park Street and New Market in Kolkata.

Unveiling the Charms of High Streets

While shopping malls are the better fit for premium and international labels, high streets offer the convenience of a range of budgetary options, a personalized service built over customer relationships of generations, and of course the opportunity to get on with a bargain.

Moreover, iconic high streets also have the gravitas of hosting chic labels on their own. Most importantly, a vast percentage of mall foot-fall is deemed as the popcorn crowd, in for some entertainment and a lot of window shopping whereas a high street shopper is more likely purpose-driven.

The Enduring Allure of India's High Streets

Proof that India’s famous high streets continue to be popular is amply demonstrated by the fact that Delhi’s Khan Market is one of India’s most expensive retail rental sites.

According to a Frank Knight report, in terms of efficiency, high streets offer 100 percent efficiency due to low maintenance costs, whereas in the case of shopping malls, the efficiency can range anywhere between 50 to 60 percent depending on the grade of the shopping mall.

This is largely due to high maintenance costs for common areas, central air conditioning, and escalators.

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16 June 2023, Mumbai

Equity Prohibited in E-commerce Platforms; The new policy aims to prevent entities from holding equity in sellers or selling private labels on e-commerce platforms, ensuring fairness.

What all you need to know

Detailed Regulations Under Consumer Protection Act

Regulations are being formulated to provide comprehensive guidelines, addressing enforcement concerns effectively.

Direct Sale Restrictions and Transparency Assurance

The policy ensures no direct or indirect sale of products to registered sellers, while catalogues and search results will be transparent to consumers.

FDI Distinctions in E-commerce Models

Foreign direct investment (FDI) is allowed in marketplace models, but not in inventory-based models involving direct sales to consumers.

Leveling the Field Amidst Concerns

To address complaints of FDI norm violations, predatory pricing, and preferential treatment, the government is closely monitoring the e-commerce landscape.

2020 Rules Barred Affiliated Entities

Introduced under the Consumer Protection Act, the rules opposed by foreign-funded and Indian companies prevented affiliated entities from selling on e-commerce platforms.

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Planet Fashion, a division of Aditya Birla Fashion and Retail, has expanded its reach in Mumbai with the opening of two new stores.

Strengthens Retail Presence

Spanning 1921 sq ft in Lokhandwala and 1400 sq ft in Dombivali, these outlets will showcase a wide range of fashion options, including casual wear, denims, and seasonal clothing, as well as formal attire such as shirts, trousers, suits, and blazers.

Offers diverse fashion portfolio

The brands featured in these stores include renowned names like Louis Philippe, Van Heusen, Allen Solly, and Simon Carter. Farida Kaliyadan, the COO of Planet Fashion, expressed her excitement about providing customers with an enhanced retail experience through these new locations.

Exceptional retail experience

With 164 stores across 143 cities in India, Planet Fashion continues to offer premium brands under one roof, catering to the diverse fashion needs of its customers.

10 June 2023, Mumbai

To achieve its target of an 18% boost in khadi sales, KVIC is focusing not only on expanding its presence beyond the Delhi store but also on nationwide expansion and capitalizing on the online marketplace.

What all you need to know

Additional stores are in the pipeline as part of KVIC's growth strategy, enabling wider reach and customer accessibility.

Maintaining Price Competitiveness

The Khadi & Village Industries Commission (KVIC) is implementing measures to maintain price competitiveness and market viability following a significant increase in wage rates. By exploring cost-sharing options with Khadi institutions, KVIC aims to minimize price hikes and ensure affordability for consumers.

The move comes after a long period without wage revisions, prompting the need for adjustments.

Alignment with Market Prices and Collaborations Drive KVIC's Innovations

KVIC aims to align the prices of its products, including mustard oil, with market rates while maintaining superior quality. Collaborations, such as the partnership with NIFT, facilitate engagement with a younger audience, with plans for specialized stores, including the first one at IIT Delhi.

Competitive Edge

Establishing solid foundations through government-owned entity partnerships further strengthens KVIC's position.

Exciting product launches, ranging from Khadi denim in collaboration with Arvind Mills to new aprons and innovative saree designs, are on the horizon, fueling KVIC's future growth.

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