Fashion Retail Scenario in India: Trends and Market Dynamics

The Indian retail market is expected to demonstrate a promising year-on-year growth of 6% to reach USD 865 billion, by 2023, from the current USD 490 billion. The share of apparel in India’s retail market is 8%, corresponding to a value of USD 40 billion. In addition to fashion apparel, the growing demand for fashion accessories makes the Indian fashion market both interesting and lucrative.

Evolution of Fashion Retail 

• The distinct trends in the macroeconomic scenario, the favorable demographic dividend, retail specific policies, and consumer buying behavior, have triggered a transformation in the fashion retail market which is also reflected in the changes undergone by the Indian retail industry.
• These take the form of modernization and corporatization of retail businesses, the evolution of alternative retail landscapes, the customization of product portfolios to address the specific needs of various consumer segments, the increasing success of private labels, and the growing focus on business efficiency.

Evolving Customer Needs 

• Evolving customer needs are a challenge for Indian retailer as these require rediscovering the customer within a short time span and then rearrange the organization’s structure, retail formats, and product portfolios accordingly.
• Unlike a mature retail market, the retail market in India has to continuously focus on the process of learning, unlearning, and relearning. Again, this alone is not sufficient; the insights gained in the process must be translated into actionable business decisions.

Increasing Acceptance of Digital Technology 

• Technology has become an inevitable part of consumer lifestyles. The increasing access to the Internet, at a more-affordable cost, and the higher penetration of digital devices has influenced consumers’ buying patterns substantially.
• Today’s consumer has greater access to fashion products through the Internet and digital devices. He/she compares products, prices, brand offerings, service levels, and the feedback/opinions of fellow consumers before making any purchase decision.

Alternative Retail Landscape

• The rapid growth of alternative retail channels, e.g. direct selling, home shopping networks, and e-tailingindicates the evolution of an alternative retail landscape. The factors driving alternative retail are reach and convenience, which are directly linked with evolving consumer buying patterns like time-poverty and the increasing acceptance of digital technology.
• Traditional retail players focused more on metros and mini metros. At the same time, brick & mortar model was considered most viable. However, the trend has changed substantially in the recent years. Retail players have realized the consumption potential in the emerging sub-urban markets of Tier II and Tier III cities.
• There was a time when industry experts were of the opinion that fashion products have less potential for e-tailing due to such issues as fit and feel. However, due to the rigorous and committed efforts of the fashion e-tailing players, Indian consumers have accepted e-tailing as a convenient model for fashion purchases. 

CONCLUSION

• The Indian fashion retail industry encompasses a plethora of opportunities. But tapping these opportunities, and converting them to business value, requires a holistic understanding of the industry, starting from fiber-to-fashion retail. Fashion retailers have to go beyond the boundaries of sales, marketing, merchandising, and category management, and have to explore upstream and allied industries with accuracy.
• Often, an external agency, having a proven track record of working with the major international and Indian fashion retailers as well as textiles and apparel manufacturers, industry bodies and trade organizations, government agencies, banks and financial institutions, brings a deep and thorough understanding of the fashion market and provides effective and actionable solutions to retailers.
   
• Fashion retailers in India have to continue realigning and restructuring their models to cater to the evolving needs of this dynamic market. The opportunity in the fashion market is immense, but this opportunity exists only for those who can visualize the future and reinvent themselves in order to address the associated challenges.

Do not change to fit Fashion, Change the fashion to fit you.