The Indian casual and sportswear market has evolved significantly over the last couple of years. The industry has witnessed rapid growth, driven by growth in income levels, changing lifestyles and the entry of foreign players after liberalisation. Technopak shares more insight on this segment.
Industry Overview
The Indian apparel market was worth Rs2.1 lakh crore in 2012; it is expected to grow at a CAGR of 9 percent to reach Rs 3.2 lakh crore by 2017. Within apparel, the growth rate of casualwear is expected to be higher than the growth rate of other apparel categories.
Analysis of Casualwear Categories
Casualwear is a broad term that encompasses a wide spectrum of clothing, from business casuals to beachwear. While the men’s casualwear market has higher penetration and is more mature than that for women, the latter has picked up pace in recent years and is presently growing more rapidly.
Casualwear comprises categories such as T-shirts, denim, skirts, etc. while sportswear and activewear are also closely related. High-performance fabrics like moisture management finish, dry-fit, etc. make up a part of sportswear, and are therefore different from activewear. Again, activewear is usually used for light jogging, yoga, walks, or simply lounging.
The segment, as a whole, is a high-growth category. The flexibility of knit fabric, along with its easy maintenance and the comfort it offers, has enabled T-shirts to become one of the most popular categories within casualwear. It has widespread acceptability among Indians across different income groups, age brackets, and geographies.
Men’s T-shirts, valued at Rs 5,980 crore, dominate the category with a contribution of approximately 90 percent. The women’s market is, however, in the nascent stage primarily due to low adoption in semi-urban and rural areas. Women’s T-shirts also face stiff competition from ethnic substitutes as salwar-kameez. Further, denims are considered to be among the prominent products within casualwear. It is worn by all three consumer segments, viz. men, women and children, and for almost all activities in a day, e.g. eating out, going to college, clubbing, social outings, shopping, etc.
The Indian denim market was valued at Rs 8,980 crore in 2012, and is expected to grow at a stunning CAGR of 15 percent to reach Rs18,430 crore by 2017. Indians across age groups and gender are showing greater propensity to buy denim clothes. Denim has even started competing with formalwear thanks to casual Fridays at workplaces and the growing acceptance of denim among Indian women. There have also been innovations in denimwear, e.g. stretch denim, which addresses the challenges of fit and comfort, and wider availability of colours, finishes and wash-effects. Casual tops or shirts are part of yet another category that is of utmost importance in the casualwear segment. While the women’s casual tops’ or shirts’ market was worth Rs 700 crore in 2012, the men’s casual shirts’ market was estimated at a staggering Rs 8,560 crore, and is still growing rapidly due to high growth in the branded segment. Casual shirts have also gained popularity among the youth and college-going students in both urban and rural India. The men’s casual trousers market was worth Rs 6,720 crore while the women’s casual trouser or skirts’ market was worth a mere Rs 470 crore in 2012.
Sportswear and Activewear
This category is dominated by the men’s market, with the women’s market showing positive signs of accelerated growth. Overall, the growth of this segment’s is the result of an increase in income levels as well as growing health consciousness among all sections of people. More and more Indians, especially in the urban areas, are joining gyms and engaging in physical exercises to stay fit. There has also been a greater interest in sports among the urban population. This has combined with the need of today’s consumers to be aspirational and quality conscious, thus leading to the category increasing in both value and volume, and brands continuing to remain important.
On average, consumers are not highly specific about the perfect attire for casual physical activities such as walking or jogging. For more serious activities like gym, yoga, and various sports, they prefer to wear specific sportswear. Therefore, innovations and value addition by apparel makers for such attire have the potential to translate into higher price premiums. The presence of international sportswear brands in India has also instigated the growth of this segment.
Increasing Urban Population
While India’s total population has increased 2.5 times in the last five decades, the country’s urban population has increased nearly five times, which is twice the percentage increase of the total population. It is also estimated that by 2020, about 35 percent of India’s population will be urban. This implies that more people will come to dwell in urban areas, where exposure to better branding, organised retail, and heightened consumerism is a norm. Hence, the casual and sportswear categories will witness an increase in both value and volume as the consumer base widens.
Aspirational, Younger India
India is a predominantly young country with a median age of 26 years and 64 percent of the population is under 35 years old. Even by 2023, the median age is expected to be only 29 years, implying that the youth will continue to comprise the largest percentage of the population even a decade from now.
This young class is highly aspirational, brand conscious, and are well connected via the internet and social media. Members of this class are likely to spend more money across different casual and sportswear categories as opposed to their predecessors; their fashion consciousness will continue to rise in tandem with the influx of international brands and the influence of various media. Variety in styles and designs, along with the high quality of products remains the top priority. Apparel companies need to consider these key factors when devising a long-term strategy for their target markets.
Increasing Organised Retail
The share of organised retail in the apparel category has increased from 14 percent, in 2008, to 19 percent, in 2013, and is expected to grow further in the years to come. This change in the retail scenario is an indication of consumers’ increasing expectation of higher product quality and improved access to products as a result of wider distribution, which is a key feature of organised retail. Several international casualwear, sportswear, and sportswear-inspired casualwear brands have leveraged this growth and expanded their operations within India. Large showrooms and other retail formats have also been used to promote this segment.
Occasion-Specific Clothing
About a decade ago, apparel consumption was primarily need based, and functionality and price were the key factors considered by consumers prior to making a purchase. Today, while price and basic functionality are still a consideration, factors like quality, looks, and branding have also become important.
Consequently, many companies today invest heavily in establishing a brand name, building brand familiarity, and preference, and always keep an eye on the latest fashion trends. There is also a deliberate attempt by consumers to wear different clothing on different occasions. The fashion basket has, thus, expanded to include newer sub-categories like nightwear, partywear, gymwear, etc. Design-based assortments,
bespoke jeans at the higher end of the market, eco-friendly apparel labels, etc. are some
of the apparel sub categories that are likely to gain more momentum going forward.
Launch of Women’s Casual and Sportswear
The organised women’s market for casual and sportswear has traditionally not witnessed the same level of growth as the men’s market. However, retailers and brands now realise the importance of this segment. Also, as more women are now embracing western clothing and trying on casualwear such as denimwear, different sportswear and activewear. New brands and products are being launched by apparel makers, and packaged with targeted discount schemes and loyalty programmes to woo the women
Consumers.
Another trend in the women’s casualwear market is ‘contemporary ethnicwear’, e.g. women wearing kurtis and denim jeans as a combination. This is viewed as being trendy and fashionable in today’s times. Companies have also acknowledged this trend by offering such unique and valued combinations. Still, given the dynamic nature of today’s fashion, it is difficult to predict whether this trend will be sustained in the long run.
Casualwear at Work
As a result of modernisation and the greater degree of acceptance of different personal preferences, various companies across the country have begun allocating one day of the week, i.e. Fridays, for casualwear, whereby employees can come to work wearing more comfortable casual clothing, which often comprise an informal shirt and denim jeans. Thus, casualwear is considered ‘cool’ even in a professional and formal setting such as the workplace. While it was the MNCs that started this popular trend, even Indian companies wanting to portray themselves as progressive have adopted this clothing policy.
Increased Casual and Sportswear Sales From High Digital Penetration
Online shopping provides the convenient remedy of buying products, which are then delivered at one’s doorstep without the hassle of spending time in a physical store.
More Indians than ever are, for the first time, buying casual and sportswear online. These sales, on average, supplement in-store sales, and do not imply that people buy less from in-store. As a result, there is hardly any ‘cannibalisation’ of store-sales resulting from increased online sales.
The increasing digital penetration is an important driver enabling higher online sales of apparel. Between 2013 and 2019, the number of smartphone users is expected to surge to 365 million from the current 65 million. The number of mobile phone, PC, and notebook users is also expected to increase substantially. This change is enabled by intuitive online interfaces, attractive offers, and services like cashon- delivery, EMIs, and hassle-free returns. This trend is altering the manner in which buyers pick up trends, learn about new things, and consume merchandise.
Innovations in Casual and Sportswear
A number of product innovations are occurring, especially in denim, sportswear and activewear categories. Innovations for casualwear mainly come in the form of new product designs, colour options, fibre mix, etc. For instance, denim jeans are now available in multiple colours and fabric options, and not just the traditional blue, black and grey.
This is also demand-driven, as today’s youth is willing to experiment more with their possessions, besides which they also see this as a way of standing apart from their peers.
Innovations in sportswear mainly include new fabric finishes such as aroma finish, plasma fi nish, moisture management finish, etc. Consumers are also displaying an inclination towards buying environmental-friendly apparel. The demand for casualwear clothing made of organic cotton, recycled apparel, etc. is on the rise. Companies now recognise the Indian consumer’s appetite to even pay a premium for such products and they are responding accordingly.
Indians are buying casual and sportswear online in addition to in-store. They want different styles for various occasions, are fashion conscious and aspirational, and seek greater value through brand-name products. It is evident that Indians today have higher expectations in terms of what they wear and that they take their clothing seriously. The casualwear and sportswear segments can reap the benefits of such fashion-and-quality oriented consumers, and thereby register an even swifter growth.
