BWI: Technopak Annual Textiles and Apparels Leadership Forum Outlines Industry Roadmap to Capture 15% of Global Market by 2015 from the Current 3%

Press release from Business Wire India
Source: Technopak
Thursday, October 15, 2009 03:30 PM IST (10:00 AM GMT)
Editors: General: Consumer interest, Fashion, Lifestyle; Business: Accounting & management consultancy services, Business services, Clothing & accessories, Major diversified industrial groups, Media & entertainment, Retailers; Healthcare
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Technopak Annual Textiles and Apparels Leadership Forum Outlines Industry Roadmap to Capture 15% of Global Market by 2015 from the Current 3%
White Paper Released at Event Estimates Around 9% Growth in Textiles and Apparels Sector in the Next Five Years Despite Slump, following CAGR of 13% over the Past Few Years

Mumbai, Maharashtra, India, Thursday, October 15, 2009 -- (Business Wire India) -- Technopak Advisors, one of India's leading management consulting firms hosted its first Annual Leadership Forum for the Textiles and Apparel industry in Mumbai on October 6, 2009. The by-invitation-only forum provided the platform for 150 industry stalwarts such as Mr. Sanjay Lalbhai , Chairman & Managing Director, Arvind Mills Ltd.; Mr. Arvind Singhal, Chairman, Technopak Advisors; Mr. Peter Wisbeck, Regional Manager - South Asia, Ikea; Mr. Dilip Jiwrajka, Managing Director, Alok Industries Ltd; Mr. Sanjeev Agrawal, CEO, Pantaloons, among others to debate and offer industry perspectives on the state of the regulatory framework, growth prospects and opportunities for both the domestic market and international trade; as well as the key challenges faced by the industry.

The key conclusions arrived at from the key note and panel discussions were:

-- India's current share of the apparel market is 3%. This is far below the initial projection of 15% by 2015 when the quotas were first phased out in 2005. The reason for this lost opportunity is that in spite of having the second largest textile complex after China, there is segmentation within the industry. Cotton, yarn, and fabric-manufacturers exist as lobbies working at cross-purposes rather than as one industry.

-- Rural, mass and ethnic wear are huge opportunities that are popularly overlooked in favor of urban, premium and western wear.

-- Indian domestic apparel market is currently pegged at between 12-15 thousand crores, with several high potential demographics still untapped such as teens, extra large sizes and children, among others.

-- Currently, 40% of international trade is between the European countries. Much of this presents an opportunity for Asia.

-- The textile and apparel industry is facing a liquidity crunch therefore investments are low

-- 4-5 big retailers consume 50-60% of the industries production capacity with imports having become weak.

-- Mass merchants such as Reliance, Aditya Birla, Walmart, Metro, Kafu expanding their business would be an opportunity for producers and a threat for brand owners.

-- The industry is faced by economic challenges that threaten its growth as compared to competing countries such as Egypt and China. While low cost of labour is an advantage, power and water is expensive and scarce; interest rates and capital subsidy are very high.

-- Technical textiles provide a huge opportunity as there are more than 6000 different technical textiles. However, to be able to succeed in this area in the western markets requires performance guarantees that the infant technical textile sector in India would find difficult to offer. The other barrier in capitalizing on this opportunity is lack of access to intellectual property. So while it may be possible to acquire the machinery, the technology itself is restricted. Currently 500-1000 crores are invested in technical textiles.

Technopak also released a white paper on the Indian textile and apparel industry. Some highlights from the white paper are:

Current state of Indian textile and apparel Market

-- The present size of Indian textile and apparel market is US$ 62 billion. Of this US$ 22 billion is contributed by exports while the rest US$ 40 billion is domestic market.

-- Exports in textiles and apparel have registered a strong growth in the last few years with 11% CAGR from 2004-05 to 2007-08; the single largest category is woven apparel followed by knitted apparel, made-ups and cotton based textiles.

-- The domestic market has shown a significant growth in past registering a Compounded Annual Growth Rate (CAGR) of ~13%. Despite the recent demand slump, the domestic market is expected to grow at around 9% in the next 5 years. In this context, the industry needs to focus on the domestic market more intensely and understand the market dynamics in more detail in order to tap the complete potential.

Evolving Indian consumers and Their Changing Consumption Patterns

-- India has been witnessing sustained high growth of GDP since 1991 of ~ 6% per year leading to fundamental transformation of the economy. Primary growth drivers include predominantly young consumers, potential of the literacy rate to touch nearly 90% by 2013, and the reduction of the dependency ratio as 13 million new people join the work force every year.

-- Family ties are still the most important factor in an Indian's life though family structures and how time is spent together is changing. Families are turning nuclear and children have become a focal point of all shopping and purchase decisions. Shopping and eating out remain top family leisure activities. With time poverty, shopping with family helps increase time shared with family.

-- The overall size of the apparel market is still growing at 9% CAGR and the aspirational apparel category has the potential to grow much faster. Hence, apparel will have to re-define itself in a new avatar to appeal to this evolved consumer i.e. as a category that fulfills a desire rather than a need.

Opportunities in the Domestic Apparel Market

-- It is evident that the Indian consumer is ready for change, demanding options and looking out for product that suits and matches its needs and aspirations. The Indian apparel market is moving away from the traditional segmentation to a much deeper and wider segmentation based on consumer needs. Some of the segments that are potential opportunities to watch out for are: Women's wear, Casual wear, Kids wear, School Uniforms, Inner wear, Plus size clothing, Active hwear / Exercise wear / Swimwear, and Youth fashion / College fashion.

-- With more and more international brands and retailers looking at India as their next destination, the competition in the domestic market is expected to shoot up significantly. However, at the same time the international brands / will also bring with them superior technology and economies of scale across the supply chain, thus making it imperative for the domestic players to tighten their operations. Already established retailers in India are looking to upgrade their existing systems and are also looking at partnerships with global majors for improving supply chain scales and efficiencies.

-- There is a huge opportunity for Indian textile and apparel manufacturers to look towards catering to the domestic value market. For manufacturers this means more emphasis on fashion at low prices. Hence firms need to take designing more seriously along with improving operational efficiencies. Companies also need to establish strong supply relationships with these upcoming "value retailers" to become first partners of choice for their fast fashion requirements.

Strategies to Develop Competitive and Sustainable Businesses

-- With the growing domestic market and growing presence of international retailers suppliers need to align themselves as per requirements of the retailers. Furthermore, with growing specialization at the retail level, suppliers should also look at developing niche / specialized product competencies and offer customized solutions for respective retailers / brands based on their specific requirements.

-- With increasing global competition and evolving consumerism it is slowly becoming a must for textile manufacturers to be innovative. Activities like R&D and designing should be treated as key success factors and a pre-requisite rather than an afterthought.

-- Companies need to adopt best management practices, like lean manufacturing, from global players.

-- The industry needs fresh and innovative thoughts to improve its existing work practices and drive efficiencies in manufacturing and supply chain. The best way to do this is by reaching out to the young managerial talent and give them the right 'incentives' to join the T&A industry. There are 103 textile institutes in India along with 118 National Institutes of Fashion Technology, which can be tapped for this purpose.

Addendum A

Quote Bank:

"The fundamental is not really the price. What is important is quality and fashionable clothing. A customer needs to have a good shopping experience at prices that consumers are consuming at today. Its about offering all of this in one equation." - Mr. Arun Sirdeshmukh, CEO, Reliance Trends

"Although we have one industry, we have sector-led approach. We have a cotton lobby, a yarn lobby, a fabric lobby that have all worked at cross purposes so far. We need to see and believe that ultimately what's good for the garment is good for the industry. The realization is now coming. A lot of people across sectors are accepting the fact that garment has to be the driving force if the economy and the industry has to grow." - Mr. Premal Udani, Chairman and MD, KayteeCorporation

"According to the Technopak research, middle India is driving consumption. We need a cult brand creation in value retail." - Mr. Tarun Joshi, Managing Director, Brandhouse Retails

"Services orientation is no more about speed and flexibility- it's about differentiation, value proposition and creativity. If you don't have any of these no matter what your flexibility is you won't survive the competition in the market." - Mr. Yakup Güngör, Founder, Care Consulting, Turkey

"When one looks at investment in textiles you look at markets like India, Egypt and China. And you choose India because of primary reasons like the human capital, the usage of English and the existence of the market opportunity. When you come in start investing you have to look at the macro economical environment much more carefully. We looked at the input prices and macro economics and the view was not very pleasant. Basically cost wise nothing is too exciting except for the labour price in comparison to Turkey. Power is expensive and scarce, water is scarce and expensive, environmental costs are high, Interest rates are very high. Capital subsidy is too high." - Mr. Moharram Kehan

Addendum B

Panel details

Key-note address 1

Is there a Leadership deficit in the World of Textiles & Apparel?

Key note speaker: Mr. Dilip Jiwrajka, Managing Director, Alok Industries Ltd

Panel 1: Prospects for India's Textile and Apparel industry

Moderator: Prashant Agarwal, Vice President, Technopak Advisors

Panelists:

1. Mr. Prashant Agarwal - Managing Director, Bombay Rayon Fashion Limited
2. Mr. Rahul Mehta - Managing Director, Creative group and President of CMI Association of India
3. Mr. Premal Udani - Chairman and MD, Kaytee Corporation
4. Mr. Jagdish Hinduja (Pioneer in the garment industry)

Panel 2: Indian Domestic Market -What will kick start Value Retail in India?

Moderator: Ms. Shaili Chopra, Anchor, NDTV Profit

Panelists:

1. Mr. Arvind Singhal, Chairman, Technopak Advisors
2. Mr. J Suresh, CEO, Arvind Brands
3. Mr. Arun Sirdeshmukh, CEO, Reliance Trends
4. Mr. Vasanth Kumar, Executive Director, Max Retail
5. Mr Tarun Joshi, Managing Director, Brandhouse Retails

Presentation 1: Indian Textiles -What Consumers Want
Ms. Saloni Nangia, Vice President (Retail), Technopak Advisors

Panel 3: A Shift From Manufacturing Orientation to Service Orientation

Moderator: Ashish Dhir, Associate Vice President, Technopak Advisors

Panelists:

1. Mr. Iqbal Ibrahim, Managing Director, Al-Karam. Pakistan
2. Ms. Deepika Rana, Executive Vice President, Li & Fung, India
3. Mr. Ajay Arora, MD, DicitexDécor
4. Mr. Yakup Güngör, Founder, Care Consulting,Turkey
5. Mr. Moharram Kehan

Panel 4: Technical Textiles -The Next Big Opportunity

Moderator: Avinash Mayekar, Associate Vice President, Technopak Advisors

Panelists:

1. Smt. Shashi Singh, Jt. Textile Commissioner, Government of India
2. Mr. Shishir Jaipuria, Managing Director, Ginni Filaments
3. Mr Chandan Gokhale, Industry Expert
4. Mr. Rahul Dharmadhikary, Director, BD India, Ahlstrom
5. Mr. Frank Kieras, ErkoTrützschlerGmbH, Germany

Panel 5: FDI in Apparel Retail -Impact on Textile and Apparel Industry

Moderator: Raghav Gupta, President, Technopak Advisors

Panelists:

1. Mr. Govind Shrikhande, CEO, Shoppers' Stop
2. Mr. Shailesh Chaturvedi, CEO, Tommy Hilfiger India
3. Mr. Thorsten Allenstein, Managing Director, Triumph India
4. Mr. Sanjay Kapoor, MD, Genesis Colors

Presentation 2: Cotton Revolutions -Vision for the Future
Mr. David Collins, Assistant Executive Director, CCI, USA

About Technopak Advisors

Technopak Advisors is one of India's leading Management Consulting firms, operating across diverse sectors which include Fashion (Textile and Apparel), Retail, Consumer Products, Healthcare, Hospitality & Leisure, Food & Agriculture, Education, and Real Estate. Its services range from business strategy to complete implementation of its recommendations.

Its team currently comprises 250+ skilled professionals from leading International and Indian engineering and management institutes. Most of its consultants have hand-on industry experience in their fields of specialization and represent a wide variety of functional backgrounds.

From offices in Gurgaon (National Capital Territory of Delhi), Thane (Mumbai) and Bangalore, Technopak consults with clients across the world. In 2008, it worked with 130+ Clients across 180+ projects, in 20 countries besides India, across 5 continents.

With a team of established domain experts at work, Technopak builds and enhances business capabilities for leading Indian and International companies by offering end-to-end solutions that are unique due to our rich experience, strong industry relationships and a global footprint.

Some of its 800+ client include Adidas, Aditya Birla Group, Arvind Mills, Benetton, Brandix-Srilanka, Bombay Rayon, Carrefour, Cotton Council International-USA, Crystal Group-HK, Fashion Design Council of India, EPZDA- Mauritius, Esquel, Giorgio Armani, Grasim Industries, Gokaldas Exports, GTZ-BGMEA-Bangladesh, H&M, IKEA, Levis Strauss, Mahindra Retail, Marks & Spencer, MAS Holding-Sri Lanka, Masood Textiles Mills - Pakistan, Ministry of Textiles (Government of India), New Balance, Pearl Group of Companies, Raymond Limited, Reliance Industries, Shahi Exports, SKNL, Sabanci Holdings-Turkey, Soktas Tekstil-Turkey, Style Textile- Pakistan, UNDP-Pakistan, Vardhman, Wal-Mart, Welspun etc.

To view the document, please click on the link given below:

Fashion_White_Paper
For picture(s)/data to illustrate this release click below:

http://www.BusinessWireIndia.com/attachments/Fashion_White_Paper.pdf
Fashion_White_Paper.pdf


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