ConQuest CONSULTING AND STRATEGY CLUB IIM SHILLONG
TEXTILE INDUSTRY
SECTORAL ANALYSIS
EDITOR'S NOTE ConQuest, the Consulting & Strategy Club of IIM Shillong, was founded in 2008 with a vision of delivering sustainable solutions to society by acting as a forum between the industry and students passionate about strategy and consulting. It strives to equip the students with domain knowledge and skills by facilitating consulting assignments, expert talks, online newsletters, and competitions. In this edition of Sectoral Analysis, we deep dive into the Textile Industry with a focus on the Indian aspect. With the recent advancements in the industry, both on the local and global outlook, changes in government policies, FDI, and changing facets of investment in the industry, it is imperative to have an in-depth understanding of the industry. India's textile sector is one of the oldest industries operating in the Indian economy. The industry is home to around 4.5 crore employees across the organized and the unorganized domain. The industry has been growing at a rate of 9% despite the pandemic-induced nationwide lockdowns and is expected to grow to a market size of USD 209 billion by 2029. Between April 2021and September 2021, handicraft exports grew to USD 2.13 billion, marking approximately 60% YoY growth. India has a competitive edge over other markets in terms of skilled manpower and the cost involved in production. The sectoral analysis covers the introduction and evolution of the industry to set the background for the reader, later building on with cost & growth drivers, mergers & acquisitions, Porter's five forces, government policies, and emerging trends. To keep the reader hooked to the industry and to probe further interest, we have also covered some interesting facts catering to the industry.
AANCHAL CHOWDHURY
ADITI PATHAK
DEEPALI SINGH BAGHEL
NAVAL MITTAL
PARIDHI JAIN
PRATIK RATHI
SHRUTI GUPTA
VIVEK BANSAL
YUGADHYA MATHURIA
CONTENTS INTRODUCTION
1
EVOLUTION
2
COST AND GROWTH DRIVERS
3-4
PORTER'S FIVE FORCES
5-7
COMPETITIVE LANDSCAPE GOVERNMENT POLICIES LABOUR POLICIES
8 9-10 11-12
MERGERS AND ACQUISITIONS
13
RECENT EVENTS
14
EMERGING TRENDS
15-16
INTERESTING FACTS
17
REFERENCES
18
INTRODUCTION China, the European Union, the United States, and India are the major competitors in the everexpanding textile business. The largest manufacturer and exporter of finished textiles and apparel worldwide is China. In addition to being the top importer of raw textiles and apparel, the United States is the largest producer and exporter of raw cotton. Germany, Spain, France, Italy, and Portugal lead the European Union's textile sector, which accounts for more than one-fifth of the world's total textile output. More than 6% of the world's total textile production is produced in India, which has the third-largest textile manufacturing sector. The textile industry is able to have contemporary facilities that are capable of producing fabrics with a high level of efficiency because to the fast industrialization occurring in both developed and emerging nations and the advancement of technology. The three main tenets of the sector are creating, producing, and distributing various flexible materials like yarn and garments. A variety of finished and semi-finished products in bedding, clothing, apparel, medical, and other items are produced primarily using a number of methods, including knitting, crocheting, weaving, and others. Due to the rapidly shifting fashion trends brought on by an increase in online quick fashion enterprises, fashion is the most popular application area in the region. Smart textiles, which use optical fibres, metals, and various conductive polymers to interact with the environment, are becoming more and more popular. . These aid in detecting and responding to a wide range of physical stimuli, including mechanical, thermal, chemical, and electric sources. During the period of forecasting,
this is anticipated to fuel the technical application sector of the market's expansion. Major corporations are being forced to concentrate on company reorganisation and investing in production techniques that target sustainable products as a result of rising consumer demand for sustainable products. Along with other important industries in India, the manufacturing and trading of textiles play a significant role in our economy. The export of textiles and apparel accounts for about 27% of total foreign exchange earnings. Also, approximately 14% of industrial production and 3% of the nation's GDP are contributed by the textile and apparel industry. The textile sector contributes about 8% of the overall amount of excise taxes collected. This also results in the textile industry accounting for 21% of the employment generation in India. There are 1,227 textile mills, and they can spin around 29 million spindles each year. Cotton continues to be the primary raw material used in the Indian textile industry, accounting for around 65 percent of all raw materials used. The Indian textile industry being the oldest creating numerable employment opportunities consist of cotton and jute farmers, artisans, and weavers who work in the organised, decentralised, and home sectors all across the nation. The textile business is incredibly diverse, with the capital-intensive sophisticated mills sector at one end of the spectrum and the hand-spun and hand-woven textiles sector at the other. Having said that, this industry is a booming and a dynamic industry which can never go out of demand.
1
EVOLUTION History
Evolution into Modern Textile Industry
Since very early times, India has been highly renowned for its textile products. During the colonial era, India's traditional textile industry practically vanished. However, the modern textile industry was born in India at the beginning of the nineteenth century when the nation's first mill was built at Fort Gloster outside of Calcutta in 1818. However, Bombay is where the cotton textile industry really got started in the 1850s. An early cotton merchant from Parsi who was also involved in both domestic and international trade founded Bombay's first cotton textile mill in 1854. In fact, most of the early mills were the creation of Parsi merchants who traded yarn and textile in domestic markets as well as those in China and Africa. In 1861, the first cotton mill was built in Ahmedabad, which would later become a rival city to Bombay. In the second half of the nineteenth century, the cotton textile industry developed quickly, and by the end of the century, there were 178 cotton textile mills. In 1900, the cotton textile industry was in a bad state due to the great famine, and several mills in Bombay and Ahmedabad had to be shut down for extended periods of time.
With the development of technology and techniques to speed up the production process, textile production reached a new level. The development of power looms and semi-automatic spinning wheels helped to create the modern textile industry. A British inventor introduced steam energy, which increased industry productivity, agility, and textile manufacturing. More technological developments over time shaped the textile and fashion industries. The second wave of the industrial revolution saw the discovery of electrical energy, which gave rise to several technological advancements such synthetic fibres. New techniques for cloth cutting and dyeing also emerged, expanding the creative potential of garment designers. As a result, fashion as we know it today was established. Digital Revolution of Fashion The contemporary textile industry was founded on the concept of mass production in 20th century. Although it began with the intention of producing uniforms for the military, it later expanded to the industry. The automation of the textile and fashion industries resulted into these advancements. The third industrial revolution got underway with the development of computers and robotics. Numerous textile production processes were able to be automated because to technologies like laser cutting, 3D printing, and many more. The adoption of digital technology is changing operations across the textile supply and distribution chain, from textile manufacture. Companies can work more precisely to reduce manufacturing costs and shorten the production cycle by simplifying textile production and designs.
2
COST AND GROWTH DRIVERS GROWTH DRIVERS Rising Demand & Per Capita Consumption Of Fibre Over the past few years, both the overall demand for eco-fibres and their use per person have increased tremendously. The average family income is increasing, and this, along with the continuously changing fashions in textiles, is significantly extending the world market for fibres. The demand for premium fibres and textiles is also being driven up by the world's increasing urbanisation (studies indicate that in 2020, 67 percent of the world's population lived in urban areas). The favourable demographics and the convergence of organised retail services are giving this sector a major boost. Both consumers/buyers and retailers are yearning for greater diversity in fibres and yarns.
prices, the average cost of manufacturing in the Indian textile industry is significantly lower. More than 45 million people were already employed in the textile business by 2020, and it accounts for an astonishing 12 percent of the nation's overall export volume. It makes sense that there has been an increase in reputable spinning cans maker businesses given the market potential. While maintaining the sustainability of the overall model, various renewable materials, including organic cotton, hemp, and jute, are used to produce ecofibres of the highest quality. The fibre market is expanding because of the increased sustainability.
Easy, Competitive Production Opportunities One of the main problems the global fibre market is facing is the decreasing amount of arable land due to climate change and other global warming-related issues. However, the easy access to premium raw materials balances out this possible obstacle. Additionally, the availability of these basic resources has been guaranteed via virtual platforms. These resources and the MMF recycling processes both make it simple to produce synthetic fibres. Leading yarn spinning cans leaders conduct ongoing research to improve the material's qualities, offer high-quality fibres, and guarantee total customer satisfaction. The increasing versatility of fibre design is also expanding the range of uses for fibres.
Resolution Of Environmental Concerns The need for environmentally acceptable cellulosic fibre variants is quickly rising in the face of mounting environmental worries and challenges. Redesigned HDPE cans, premium springs, and other accessories are frequently used by the leading spinning can producers, like Jumac spinning cans, to ensure greater load capacities and minimal environmental responsibilities. The cost of maintenance is carefully controlled, and the Steadily Growing Competitive Advantages production cycle efficiency is the main priority. Many significant competitive advantages are also Despite accounting for almost one-third of the boosting the global market for eco-fibres. Because world's fibre market, only 3% of all arable land is trained labour is so readily available at affordable used for cotton cultivation. To combat this, the
3
COST AND GROWTH DRIVERS largest players are actively working to maximise Wages and labour cost productivity per acre by utilising the most cutting- The need of maintaining effective control over edge, scientific farming techniques. labour and labor-related costs is shown by the Growing Role Of Technology & Usage Of Spinning steadily growing percentage of sales rupees that are spent on salaries, wages, and other perks. It is Cans the biggest factor in spinning cost and the biggest Without a doubt, innovation is now a major force factor in conversion cost. It contributes to around behind the growth of the fibre and textile industries. 14% of cotton yarn's sales value. However, there This industry is becoming more competitive than are significant differences amongst mills in the ever because to digital change. High volume incidence of labour costs, ranging from 6% to 25% investments have been made in technical of sales income. Differences in labour productivity advancement, and more time and money are being and wage rates are the main causes of the labour put into R&D and the formulation of cost- cost disparity between mills. optimization methods. Manufacturers of spinning Power Costs cans aim to produce high-quality goods at their cutting-edge production facilities using process- The cost of energy is second only to labour in driven models. All processes are being supported importance to conversion costs in spinning mills. from beginning to end, from raising textile For typical spinning mills, the SKRA norm for power production standards to developing small-scale cost is 10.50 percent of sales value. process controls. Tools for testing and quality control are likewise getting more sophisticated. ROI statistics are rising as the fibre sector becomes more "intelligent."
COST DRIVERS Raw material cost Cotton is the main raw material used in spinning mills, accounting for more than 85% of the fibre consumption there and more than 76 percent of the total fibre consumption in the textile industry 50 to 70 percent of the price of yarn is made up of cotton. Cotton prices have been observed to vary significantly within a year, by as much as 30%, with a C.V. of 7 percent on average. In addition, the cost of raw materials varies significantly among mills, by roughly 30%.
Overheads Costs incurred for general administration, purchasing and distribution, selling, insurance, travel, telephone, advertising, rates and taxes, time office and welfare costs, printing, and stationery are included in overheads.
4
PORTER'S FIVE FORCES Porter’s five forces is a critical tool to analyze the competitive landscape of an industry. It helps to determine how attractive and profitable a particular industry is.
POTENTIAL ENTRANTS
Supplier Concentration Importance of Volume Threat of forward integration
SUPPLIERS
Bargaining power of Suppliers
Threat of new entrants
INDUSTRY COMPETITORS
Rivalry among existing firms Availability & performance of substitutes Switching costs incurred by the buyers Propensity of buyer to substitute
Economies of Scale Switching costs Government policy Access to distribution channel Cost disadvantage
Threat of substitute product or services
Bargaining power of Buyers
BUYERS
Buyer to supplier ratio Buyer's purchase volume Threat of backward integration
SUBSTITUTES
5
PORTER'S FIVE FORCES Threat of New Entrants
iii. Threat of backward integration likely to increase due to attractiveness of local sourcing and production
Due to these changing forces, there is an increasingly competitive landscape in the marketplace owing to organized retailers leveraging their size and buying power to source from multiple suppliers. However, for a new entrant of substantial This parameter analyses the ease for new power and size, they can exercise its power on the businesses to enter the marketplace and disrupt suppliers. the profit share of the established business. A few barriers to entry are: Economies of scale, switching costs, investment costs, government policy, etc. The organized and unorganized sector in the textile retail sector is ruled by domestic retailers. In the organized sector, market dominance by large domestic retailers due to their expansive consumer base, operations, and geographic presence has Bargaining power of Suppliers created demand and supply side economies of scale. This has substantially increased barriers to The bargaining power of suppliers is largely dependent on the supplier concentration, entry for the competitors. importance of volume, and threat of forward The established brands in the sector have gained integration. Suppliers are in a position of power customer loyalty. Hence, to attract and retain when their concentration is high and the threat of customers, new entrants should have new forward integration is high. This affects the buyer’s promising offerings with large capital investments. profitability. This can be attributed to fewer switching costs. Bargaining power of Buyers The bargaining power of buyers depends on the following forces: i. Low buyer-to-supplier ratio ii. Large purchase volume
6
PORTER'S FIVE FORCES The textile industry in India is highly fragmented where the suppliers are in high concentration, most of which operate independently and on a small scale. This, however, lowers the impact due to the inability to create economies of scale. However, a few large suppliers like the Raymonds and the Tata Group that have amassed the power and capital to pose a threat of forward integration have become strong competitors.
Competitive Rivalry
Threat of Substitutes
The intensity of rivalry is determined by industry growth, industry concentration, diversity of competitors, and product differentiation. High rivalry makes the industry less profitable as it influences the prices and the costs involved and drives price wars among various industry players. While high rivalry makes the industry less attractive, intense competition also opens doors for increased revenue through new ventures.
The threat of substitute products is evaluated based on the availability & performance of the product, switching cost for the consumer, and the consumer's propensity to the substitute.
The unorganized sector in the textile and apparel industry in India is mostly mom-andpop stores competing in a similar segment. The organized sector accounts for only 5% of the market share yet is now driving the intense concentration of the rivals.
There is a relatively high threat of substitutes in the Indian Apparel and Textile Industry. Customers have many options ranging from small unorganized operators to large-scale manufacturers. Additionally, the presence of a large number of tailors in every nook and corner has made custommade, stitched clothes a lucrative substitute for high fashion brands with minimal switching costs.
Due to the current policies, there is increased but limited diversity in competition. Additionally, there is reduced product difference in the market segment. All these factors have derived high competitive rivalry within the industry.
7
COMPETITIVE LANDSCAPE In the long run, the Indian textile sector has always produced consistent returns. The market appears to be promising in the near future, and thus competition is expected to increase in the coming years. The following are the major players in the textile sector in various areas: Textile - Manmade
Textile - Products
Grasim Indo Rama Industries Synth
Filatex India
Welspun India
PDS
Raymond
9,311
3,901
3,828
Sales Revenue (Rs. Cr.)
95,701
3,901
3,828
Sales Revenue (Rs. Cr.)
Profits (Rs. Cr.)
7,589
268
302
Profits (Rs. Cr.)
601
248
302
Debt (Rs. Cr.)
74,560
326
358
Debt (Rs. Cr.)
3,303
740
2,327
Market Capital (Rs. Cr.)
99,773
1,633
2,307
Market Capital (Rs. Cr.)
7,430
4,765
6,396
ROE (%)
10.7
57.5
32.6
ROE (%)
15.7
32.7
16.2
Textile - Cotton/ Blended Vardhman Arvind Ltd. Textiles
Textile - Processing Sutlej Textiles
Alok Industries
Bombay Dyeing
Siyaram Silk
8,016
2,001
1,903
Sales Revenue (Rs. Cr.)
10,507
8,033
3,041
Sales Revenue (Rs. Cr.)
Profits (Rs. Cr.)
1,560
247
161
Profits (Rs. Cr.)
-252
-226
211
Debt (Rs. Cr.)
1,983
1,865
937
Debt (Rs. Cr.)
24,102
4,442
223
Market Capital (Rs. Cr.)
8,893
2,385
1,102
Market Capital (Rs. Cr.)
9,906
2,087
2,685
ROE (%)
21.8
8.7
15.2
ROE (%)
-
-
24.7
8
GOVERNMENT POLICIES The Indian government has developed a number of initiatives to support the country's whole textile industry. The following are government efforts that have been instrumental in boosting textile manufacturing and encouraging this sector to effectively serve both home and foreign markets:
Other Schemes:
Amended Technology Upgradation Fund Scheme for textiles industry (ATUFS) ATUFS is intended to encourage business owners and entrepreneurs to upgrade their technological infrastructure. Business owners in the Technical Textiles, Garments, and Weaving industries will be given a one-time capital subsidy. The garment, clothing, and technical textile industries will get a 15 percent subsidy from the central government. This program will receive Rs 700 crore from the Union Budget 2019–20. Scheme for Integrated Textile Parks (SITP) The goal of the Scheme for Integrated Textile Park is to assist the development of top-notch infrastructure facilities for the establishment of textile units. Up to 40% of the project's costs, up to a maximum of Rs. 40 crores, are covered by grants from the Government of India (GoI). Merchandise export from India Scheme The MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme) are two programs for the export of goods and services that have been created to increase the competitiveness of India's export goods on the world market. In order to level the playing field for exporters and compensate for infrastructure efficiency gains and related expenses, the government has offered incentives to exporters.
9
GOVERNMENT POLICIES National Textile policy 2000 This policy entails establishing textile factories and complexes that are both environmentally clean and technologically advanced, the private sector can contribute more. A revised draught of this proposal that aims to create 35 million jobs by luring in foreign investment was just created. The government has committed $3.27 million toward the establishment of contemporary apparel garment manufacturing hubs in each North Eastern state Foreign Direct Investment (FDI) One of India's most lenient international investment policies applies to the textile and clothing industry. In India, 100% FDI (foreign direct investment) is permitted under the automatic route. According to Automatic Route, neither the non-resident investor nor the Indian enterprise needs the government of India's consent for the investment. SAATHI Scheme A program called SAATHI has been jointly introduced by the Union Ministry of Power and the Ministry of Textile (Sustainable and Accelerated Adoption of efficient Textile technologies to Help small Industries). Energy Efficiency Services Limited (EESL), a Public Sector Undertaking under the Ministry of Power, would provide energyefficient power looms, motors, and rapier kits to Small and Medium Power Loom units as part of this initiative at no upfront cost to the units. The owner of the unit is not required to allocate any upfront capital costs in order to purchase this equipment under this project. Additionally, he is not need to manage additional costs for payback.
Scheme for Capacity Building in Textiles Sector (SCBTS) The Cabinet Committee on Economic Affairs (CCEA) authorized the "Scheme for Capacity Building in Textile Sector (SCBTS)" skill development program in 2017. The initiative hopes to have trained 10 lakh young people in all aspects of the textile industry's value chain, with the exception of spinning and weaving. This program's main goal is to provide a demanddriven and placement-oriented skilling program to help in creating jobs in the organized textile industry. The textile industry in India has made a significant and enormous contribution to the economy. The many initiatives for textile policies have a significant positive impact on the Indian textile sector. These plans' vision has the ability to improve both the country's participation in the global textile market and the perception of the relevant segments. The combination of the government's new worldwide strategy will help the textile industry create more jobs, increase the national economy, and aid India's economy in gaining international reputation.
10
LABOUR POLICIES The textile industry, which directly employs nearly 45 million people and is the second largest employer after agriculture, has long pushed for repealing onerous labour regulations that hamper business operations. The statute requiring that every company with 100 or more employees obtain authorization before making any layoffs or retrenchments from the Labour Department, which has jurisdiction over the company, has been the source of conflict. One of the most essential requests of the garment manufacturing sector that has been waiting to be passed is labour changes, which are finally thankfully being recognised. From the perspective of the industry, these changes were unavoidable, especially in light of the continuing coronavirus pandemic. These adjustments will assist the Indian garment sector in moving closer to top-tier production.
Assam, and Goa are a few more states that have made changes that have pushed Bihar and some other states to follow suit.
Businesses in India will gain from the decrease in licencing requirements and paperwork, as well as the costs associated with multiple compliance duties. This could encourage their capital investment into core business operations, enabling the creation of new jobs or maintaining employment. According to current changes in technology, work practises and nature, and workplace amenities, India's labour ministry supported the creation of the new regulations. The goal of the new labour laws is to create a system of labour compliance based on "one labour return, one licence, and one registration." Currently, to operate a firm, employers must keep up with eight registrations and four licences. They are required Countries like Bangladesh, who have duty-free to submit eight labour returns, including ones to access to the Indian market, have become fierce the EPFO, ESIC, and Chief Labour Commissioner. competitors as a result of free-trade agreements like the South Asia Free Trade Agreement (SAFTA). Industrial Relations Code Bill, 2020 The expert panel advised the administration to The laws governing trade unions, working reconsider such pacts and try to come up with a conditions at industrial facilities, and the handling solution. The group further advised that the of labour disputes will all be consolidated and government work toward promoting scale along the amended by this Code. Under the new Code, there textile value chain by supporting significant must be over 300 employees before a standing investment, corporate mergers, and cluster order is necessary. This standing order governs the expansion. The panel recommended that in order to behaviour expectations for workers engaged in assist the industry in operating more efficiently, the industrial facilities. This implies that businesses TUFS scheme's technology upgradation subsidies with less than 300 employees will have more freedom in how they manage their labour force be distributed quickly. because they won't require government evaluation The four primary states that have made progress in or permission. this direction are Uttar Pradesh, Madhya Pradesh, Gujarat, and Maharashtra, all of which have centres The Industrial Relations Code adds new requirements that must be satisfied in order to for the production of textiles and clothing. Odisha,
11
LABOUR POLICIES carry out a valid strike. The terms have a deadline for the arbitration process, which must be adhered to by employees before they start a legal strike; The sole factor at the moment is conciliation time. This may be a source of relief to many businesses in the country. Therefore, employees are prohibited from striking for 60 days following the conclusion of arbitration proceedings if they are ongoing before a labour tribunal or the National Industrial Tribunal. All industries will be subject to the new rules. Previously, employees could call a strike with between two and six weeks' notice. The use of flash strikes is forbidden by the new code. Code on Social Security Bill, 2020 The purpose of this Code is to make the social security net available to all employees and workers, including in the organised and unorganised sectors, which together makes up the majority of businesses in India (registered factories, offices, and corporate establishments). A National Social Security Board is suggested by the Social Security Code to provide appropriate programmes for gig workers, platform workers, and unorganised workers. These workers are now covered by social security programmes including as life and disability insurance, provident funds, health and maternity benefits, and skill development thanks to the Code. Additionally, the Code suggests creating a social security fund.
Additionally, the Occupational Safety, Health, and Working Conditions Code has expanded the threshold for contractor employees from 20 to 50; the relaxing of standards to permit the hiring of contract workers in all areas will make it easier for employers to comply with regulations. Further, to maintain its exports on the global market, the Indian textile industry has increased its efforts to end the use of child labour. The elimination of child labour in all forms of employment is a significant global issue. The USA in particular is highly sensitive to this issue, as are all the main importing nations. Imports of items that are on the list of products on the source nations produced by child labour or forced labour in violation of international labour standards are restricted by the Bureau of International Labour Force of the United States Department of Labour (US DoL). The US DoL included Indian cotton seeds, cotton, thread/yarn, and other commodities in the list released on September 30, 2020, based on the shipments reported by certain NGOs. The Indian corporations have been urged to check and make sure that neither their own organisation nor the organisations of their suppliers or buyers employs child labour or forced labour.
Occupational Safety, Health and Working Conditions Code Bill, 2020 Instead of the present system that necessitates several licences, the Code allows staffing organisations to employ individuals contractually from different locations with a single licence.
12
MERGERS AND ACQUISITIONS The Indian textile industry covers two broad spectrums of realities in the country. On one far end, we have highly mechanised production of fast fashion clothes; on the other hand, we have heirloom clothes being painstakingly put together by the handloom workers. In this fast-changing industry landscape, the agility of the companies genuinely defines whether they can survive in the long term. In recent years the industry has been battered by the pandemic and the rise of the digital economy through which the local boutiques took over the business giants. Weaving a new story
to as many consumer price segments as possible. The flurry of acquisitions in the designer brands like Sabyasachi, House of Masaba, Tarun Tahiliani, Abu Jani Sandeep Khosla, Manish Malhotra and many more follow the structure of a strategic acquisition. In most cases, the corporates are picking up a controlling stake in the fashion houses to ensure that the aesthetics of the brand remain intact, with the designers remaining as the creative head while the corporate can ensure the brand's longevity. This symbiotic relationship benefits both, as the buyers gain a well-established brand and acquired brands get deeper pockets and financial stability in the long run.
The period until 2017 witnessed mergers in the core textile manufacturing sector. The ending of the Agreement on Textiles and Clothing (ATC) at the end of 2004 consolidated the supplying sources worldwide, and Indian companies hoped for more export competitiveness. Anticipating domination by the global retail chains led many players to consolidate their holdings. Joint ventures and operational tie-ups continued rapidly to strengthen the marketing, co-branding, and gain entry into the Indian markets. However, with the advent of ecommerce in the space, the dynamics of the Another feather in the cap? industry started to change gradually. It is yet to be seen how this newfound corporatisation of the smaller brands unfolds in, the The Indian industry is also characterised by longer run. Even though there is the hope of boutique designer chains dealing with ethnic internationalising these designer brands and designer wear and catering to a large customer reaching a wider audience post the merger, there is base of millennials and wedding-goers. As per a a risk of diluting the couture brand value. The report by Euromonitor, the designer apparel market designers have spent years building their brands in India is sized at INR 2,043 crore and is expected and exclusivity, which is now threatened by the to grow at a CAGR of 12% during 2021-2026E. mass merchandising mindset of the conglomerates. Corporate giants like Aditya Birla Fashion Limited Nevertheless, for now, the acquisitions look like the and Reliance Brands aggressively pursued designer addition of some more feathers in the caps of the brands to diversify their product portfolio and cater corporates.
13
RECENT EVENTS Recycle Textile Federation: A recycle textile federation, headquartered in Coimbatore, has been established by more than 200 small mills from all across Tamil Nadu that recycle cotton waste into yarn and garments. The Federation intends to unite these mills across the nation to meet the industry's requirements as a whole, identify markets across the world, and guide its members to serve markets where their goods and services are required. Noting that there are 400 mills in Tamil Nadu that convert cotton waste and PET bottles into yarns and clothing, with 180 of them in Coimbatore and Tiruppur. The federation would work to bring these mills together and serve as an organisation that would represent their shared needs and demands as well as pursue national and international coordination.
Low export demand: Home textile manufacturers' operating profitability is predicted to decline by 150–200 basis points to 13 percent this fiscal year due to weaker export demand and a strong rise in raw material and transportation costs, but the sector's credit outlook will remain steady. A sizable 58 percent of these exports go to the US, the largest market in the world. Inflationary headwinds are anticipated to have an immediate impact on the market for home textiles
worldwide, with big-box retailers reducing inventory and customers reducing discretionary spending.
67th Indian International Garment Fair: The 67th India International Garment Fair will include over 1,189 foreign customers from 59 different nations who got themselves registered for the fair. Nearly 500 exhibitors and more than 2,000 international buyers and buying agencies are brought together by the IIGF to give MSME exporters from all across the nation with a direct marketing platform. Among other countries, the purchasers are travelling from the US, Brazil, Japan, UK, Spain, Australia, Poland, Colombia, Greece, Italy, Egypt, Chile, Argentina, UAE, Thailand, France, Germany, Canada, and Iran. The success of the event can be seen from the revenue of $166.17 million generated from the last year’s fair held in Jan’20. The expected growth out of this year’s fair is 10%. A new inititative added to this event is the installation of a stall where in the budding start-ups will be showcasing their offerings in the textiles & garments sector. This is aimed to provide almost 600 textile start-ups that exist currently in India, a window to the influx of investment & also increasing exports, overall scaling up the global demand.
14
EMERGING TRENDS -Laser for textiles By utilizing minimal environmental impact treatments and procedures, laser technology for textiles ushers in a green revolution. Laser marking of textiles enables a net decrease in production time and a reduction in water use of up to 60%. Additionally, it enables a variety of effects, such as bleaching and the vintage effect on jeans, to be achieved without the use of chemicals or contaminants. The laser's maximum accuracy and efficiency enable the elimination of energy and material waste for high-performance and environmentally responsible production. The early laser technology has steadily changed into the laser technology of today. The outdated laser technology was inefficient, heavy, and challenging to maintain. Modern equipment, on the other hand, is simple to use, understand, and maintain. Additionally, the previous technology required routine gas refilling and had a number of safety concerns. -Traceability and safety in production and marking Sustainability It is defined as both occupational safety and health and supply chain traceability, is a trend to be taken into account in the textile business in 2022. For laser-treated textiles, eliminating chemicals means safeguarding both the environment and the workforce. Additionally, the ability to produce assemblies without switching out any tools cuts down on the time and risks associated with machine positioning. By meticulously tracking each step, digitalization and computerization of production processes also enable greater quality control.
-Bio Textiles Artificial hearts use biotextiles. Organ transplantations have been employed to meet the needs of patients with acute organ failures as a result of rising advances and developments in the healthcare sector. Additionally, due to a dearth of organ donors and an increase in patients, there has been a global increase in demand for artificial organs. Since bio textiles are heavily utilized in the creation of artificial organs, it is expected that demand for them would rise in tandem with this market's expansion. Artificial organs like artificial hearts and kidneys are being used more frequently, which has helped patients live longer and have better quality of lives. Additionally, it is projected that rising healthcare spending and improved patient outcomes would increase demand for bio textiles utilized in artificial organ applications. The market for bio textiles is anticipated to rise in the near future as a result of the rising disposable income of individuals in the Asia Pacific.
15
EMERGING TRENDS Smart fabrics and intelligent textiles
Creativity: Customization & on-demand products Companies in the textile industry are concentrating on providing more customization and seeking for more exclusive products. Many businesses have chosen to emphasize on-demand production in an effort to combat overproduction, but this necessitates simple and efficient production procedures. The benefits of laser for textile items offer a dual solution in this situation as well. For the benefit of creativity and production efficiency, the laser's accuracy and versatility enable the attainment of one-of-a-kind and highly complicated treatments in a very short amount of time. The digital printing industry is growing and, in addition to upending old businesses, is also creating new business prospects. using technology to speed up market expansion while enabling sustainable manufacturing. We may anticipate an exciting new chapter in the ongoing digitization of the apparel sector and the retail supply chain as the next decade moves forward (after a difficult start).
Smart materials are being used by the fashion and entertainment industries to create clothes with distinctive looks. Technology that is woven into fabrics can be used to change the appearance elements of clothing, such as color, size, or shape. Intelligent textiles, also known as e-textiles, are able to automatically react to their surroundings or stimuli, such as thermal, chemical, or mechanical changes, in addition to being able to sense a variety of environmental conditions. Smart fabrics are able to detect various environmental conditions. Technology that is woven into fabrics can be used to change the appearance elements of clothing, such as color, size, or shape. Numerous well-known firms, like Under Armour, Levi's, Tommy Hilfiger, and others, as well as smaller ones, including Sensora, Loomia, Hexoskin, and CuteCircuit, provide smart clothing made from smart materials to distinguish their lines from the competition. Digital textile printing ink Digitally printed clothing features higher picture quality, vivid color, and durability. The appetite for luxurious home textile items is rising in AsiaPacific countries, which is expected to increase the market for digital textile inks. A true innovation in digital printing is a new colored ink that can print on any fabric. The use of digital printing on textile is the industry's driving force and helps to shape not only the textile sector as a whole, including fashion, but also the home décor and interior design markets, which can present a wealth of chances for individualized designs.
16
INTERESTING FACTS Nearly 3,800 liters of water are used to make a pair of jeans. 700 gallons of water to make a cotton shirt, which is more than enough to keep one person hydrated for 900+ days.
Clothes can take up to 40 years to decompose. In addition to releasing gases like methane, most fabrics are made with dyes and chemicals that can contaminate the soil and water in the ground.
The production of silk, sericulture, in China dates to 4000 BCE. However, China guarded the secret of silk production heavily for thousands of years. Eventually, a Japanese expedition managed to smuggle silkworm eggs out of China.
Kalam tribe has a tradition of wearing hats made from over 1000 green beetles. The interesting thing to note here is that these beetles only appear two months of the year, which means it takes almost 3 years to collect enough for just one headdress.
It takes the wool of 2-3 Capra hircus goats to make a single cashmere/pashmina scarf, but the cashmere fibre is eight times warmer than sheep wool.
17
REFERENCES www.grandviewresearch.com www.mordorintelligence.com www.ibef.org www.fibre2fashion.com www.texcovery.com www.otlas.com www.study.com www.economictimes.indiatimes.com/ https://in.apparelresources.com www.textileexcellence.com/ www.stylestackapparels.com Assessment of Five Competitive Forces of the Indian Apparel Retail Industry: Entry and expansion strategies for the Foreign Retailers http://surl.li/cnfjo https://www.sutlejtextiles.com/blogs/blog-post.php?id=D31
18
Follow us at: Website : https://www.iimshillong.ac.in/student-life student-clubs/conquest Facebook : https://www.facebook.com/ConQuest.IIMS LinkedIn : https://www.linkedin.com/in/conquestiims Instagram : https://www.instagram.com/conquest.iims
Write to us at: conquest@iimshillong.ac.in
ALL RIGHTS ARE RESERVED WITH CONQUEST