Shirts are expected to grow positively over the next five years backed by the new fashion trends in the category. With the growing influence of social media platforms and popularity of e-commerce companies, the sale of shirts is growing positively. The shirts segment was valued at `532 billion in 2018 and grew at a CAGR of 14 percent between 2013 and 2018. Celebrities are starting their own clothing lines. Shirt sales however continue facing challenges such as increased customs duty and raw material prices. Also, creating customer loyalty and brand recognition are some of the many challenges faced by manufacturers.
Latest Men’s Fashion Trend: Casual Shirts Paired with Chinos
Though shirts have been around for a long time, they were usually paired with jeans for a casual look and with trousers for a formal look by men. So, a consumer would have to purchase two diﬀerent pairs of clothing for diﬀerent occasions. This was changed with the influx of chino pants which are casual trousers and can be paired with either formal or casual shirts. Also, chinos are available in diﬀerent colours and skin friendly fabric such as cotton which allows men to comfortably wear them for entire day with formal shirts at work or with casual shirts at colleges or hanging out at a social place. The shirt and chino look are thus getting attention from men of all age groups alike as men now have the liberty to pair them based on their preferred look of formal or casual.
New Fad: Customized Shirts
Indians traditionally have been used to getting their shirts stitched from tailors. This allowed them to choose their own fabric, colour and fit. This was a very unorganised industry then and with the advent of mass manufacturers that oﬀered variety in their oﬀerings and the latest fashions at aﬀordable pricing due to economies of scale, the requirement for tailored clothing diminished. However, like old wine in a new bottle, companies such as Raymond rebranded this oﬀering and made it into a trend which is gradually picking up. With growing disposable incomes and increase in aspirational consumers companies are bucketing them under premium oﬀerings. Raymond is already doing this under their ‘Made to Measure’ store where they oﬀer custom made shirts, trousers and blazers. Also, there are local players that have stepped in to make the most out of this trend.
Women Work Wear Shifts from Ethnic to Western
Traditionally, women have limited themselves to ethnic attire in a formal setting like a workplace due to factors such as social restrictions or the sheer comfort. However, as more women continue stepping outside their houses for work or education their clothing choices are also changing. For workplaces where formal attires are still the norm, women are ready to experiment with formal shirts and formal trousers or skirts to portray a sophisticated look and be trendy at the same time. Women of all ages in urban areas are also preferring western wear which involves shirts for a casual outing due to their comfort level.
Increased Demand for Men’s Party or Dress Shirts Boosts Sales
Since the early 2000’s when the Information Technology (IT) and the Information Technology Enabled Services (ITES) Industry took oﬀ, cities have experienced a gradual increase in the number of pubs and lounges. Also, these social hangouts gained mass popularity amongst the youth as they were either staying away from home or wanted to experience these new social places and have a good time. There is also a growing trend amongst the working youth that believes in working hard and partying harder which is usually over the weekends and in the company of friends, at a good social hangout spot such as a lounge, pub or eatery wearing party or dress shirts giving men a casual yet sophisticated look. More men continue to fall for this look and are aiding the growth of shirts. Such shirts are dark in colour allowing them to gel in the setting of a lounge. This trend is expected to continue as the partying culture is still limited only to cities and is yet to penetrate the smaller towns across the country providing opportunity to shirt manufacturers. Another segment that has picked up pace is eyewear as both men and women have become fashion conscious and consider a good pair of eyewear of utmost importance in their wardrobe. They can pair it with shirts, t- shirts or any other piece of clothing and not only look stylish but also stay protected from the harmful UV rays.
Companies Continue to Oﬀer More Colourful Options in Shirts
With every passing year the fashion industry undergoes changes and new fashion styles are introduced or past fashion trends are revived with added spice. Taking this into consideration, shirts have experienced the same and are now oﬀered in varied colour pallets and fabrics to meet the demands of certain seasons because of the ability of colours to add an added feeling of warmth or coolness to eyes. Apparel companies such as Blackberrys are seen oﬀering more rustic colours for shirts that would be sold in winters. These shirts are made of heavier fabric such as wool, fleece, wool blends or corduroy. However, during summer which are typically very hot, consumers move towards the shirt oﬀerings that are in the pastels colour pallet and are manufactured using cotton or linen as they provide a soothing feeling to the eyes. Many companies are using these colour preferences to build their oﬀerings and push sales during specific seasons and age groups.
SOCIAL MEDIA, E-OMMERCE AND CELEBRITIES HELP TO BOOST SALES
Social Media Platforms such as Instagram, Facebook and Pinterest Boosting Sales
A country like India which has the highest youth population, around 600 million under the age of 25 years in 2018, has lulled many international and domestic apparel manufacturers to expand in the country, irrespective of the complex government regulations. To back it, there is also a strong penetration of the internet in the country which has resulted in increased screen time on social media platforms. This has brought a change in the way products are advertised and promoted. Alongside the traditional modes of advertising such as television, newspapers and radio the latest advertising channel has become the internet where companies are promoting their products through social media platforms. When the target audience sees their friend or favourite celebrity wearing a design or brand, they are keen to know more about the brand and usually get influenced to make a purchase. Also, there are YouTube channels and blogs that talk about the latest trends in shirts and new brand oﬀerings alongside oﬀering deals through coupon codes and discounts.
‘With every passing year the fashion industry undergoes changes and new fashion styles are introduced or past fashion trends are revived with added spice’.
E-commerce Platforms are Taking Latest Fashion Trends to Rural Areas
There are many brands that oﬀer quality, trendy and aﬀordable shirts but do not have the financial muscle to expand in rural areas. Also, brands that do have the capacity still limit their expansion in rural towns due to reasons such as small target audience that is aspirational but does not oﬀer enough business to these brands to run their operations in rural areas. This has resulted in limited options for the consumers in these areas. The consumers here would thus make their purchases from the local stores or when they would visit cities such as a Delhi, Bangalore during vacations or for work. Also, over the period people have shifted from need-based shopping to aspirational shoppers who do not mind spending a little extra money for branded apparel. Thus, with increased penetration of the internet and e-commerce which is growing at a CAGR of 10 percent between 2018-2022, consumers in smaller towns and rural areas are now able to fulfil this need and order the trendiest shirts from the comfort of their house at discounted prices and easy return policies. This has resulted in increased sales of shirts and other forms of apparel across the country.
Celebrities Continue to Develop Their Own Apparel Brands
Following the trend in the western countries where several Hollywood celebrities and music artists started their own apparel brands, it has been seen that celebrities in the country have also hopped on the bandwagon. This was visible with the sheer increase in the number of celebrities that have their own clothing lines now. For example, brands such as ‘Wrogn’ by Virat Kohli, ‘Being Human’ by Salman Khan, ‘All About You’ by Deepika Padukone, ‘Nush’ by Anushka Sharma and ‘Imara’ by Shraddha Kapoor’ are a few that oﬀer shirts and other types of apparel. These brands are oﬀering products across the country targeting specific genders and age groups. Their strong following across the country has allowed them to create a demand for their apparel amongst the masses
Private Labels from E-commerce Players & Retailers Help to Boost Sales Due to Price Advantage
In the past decade, the apparel industry experienced several changes such as internet retailing and private labelling. This was largely possible due to the e-commerce companies such as Flipkart, Amazon, Myntra and Jabong that disrupted the distribution channels by selling apparel products online at discounted prices, doorstep delivery, free delivery and easy cash back procedures. Indians had never purchased shirts or any other apparel online before and neither did they like the thought of making their
‘Following the trend in the western countries where several Hollywood celebrities and music artists started their own apparel brands, it has been seen that celebrities in India have also hopped on the bandwagon’
purchase decisions based on a picture of the product on a web page. However, with these companies oﬀering several benefits like the one’s mentioned above, sales gradually picked, and these platforms are now the fastest growing channel for sales at a CAGR of 10 percent between the period 2018-2022. As these e-commerce companies developed a strong consumer base, they launched their own private labels which were oﬀered at very aﬀordable pricing taking into consideration the price sensitive Indian clientele. This has benefitted players such as Amazon.
Also, players such as Ajio are oﬀering their own private label which are more targeted towards customers who want the latest fashion at aﬀordable pricing. Several retailers such as Future Group, Lifestyle, Shoppers Stop and Reliance Trends have also started their own private labels that are sold through their flagship retail stores and are garnering healthy sales as private labels are usually priced economically giving them a price advantage in a price conscious country.
Omnichannel Presence Continues to be Key to Reach a Larger Target Audience
Companies today are working harder than ever to maintain stronger brand recognition levels amongst customers due to an ever-increasing competition in the market. Consumers are no more loyal to brands and make their purchase decisions based on factors such as pricing, current trends and quality. Brands are making eﬀorts to maintain consumer loyalty by oﬀering certain value-added services such as online customer service and added discounts for loyal consumers who hold membership cards. Apart from this, part of strategy to build strong brands is building strong presence through every distribution channel possible to reach out to as many consumers as possible. In this pursuit there have been strong disruptions across the apparel industry. Companies that were earlier solely focussed on the retail outlet format to make sales are now not only selling through e-commerce websites such as Amazon or Myntra but have also invested in their own digital platforms to sell products through their websites. Similarly, e-commerce players such as Myntra which launched its own private label Roadster on its website a couple of years back started its first retail outlet in Bengaluru in March 2017 to have an omnichannel presence.
Internet Retailing Continues to Intensify Competition
Gone are the days when manufacturers had to make heavy capital investments to start a new retail outlet or pay for a prime spot in a shopping complex. With the rise in internet retailing, it has become easier for new apparel companies to enter the market. Shirt manufacturers are now marketing and selling their products online through their digital platforms or through e-commerce websites. Doing this has saved them on capital costs of starting an outlet and running operational costs resulting in reduced cost of operation. These companies are solely focused on manufacturing quality and trendy products as even the distribution is taken care by the e-commerce players. Thus, this has allowed several new players to enter the market and intensify competition. This is the same strategy used by e-commerce players that are oﬀering their own private labels on their website.
Indians are All for Fast Fashion Apparel Allowing Companies such as Zara to Thrive
With a strong youth population in the country, the demand for trendy and latest fashion continues to grow. This has given a strong boost to the fast fashion trend. Fast-fashion is getting attention from the youth population of India who is seeking the latest fashion apparel but does not wish to spend a lot. Thus, these companies are oﬀering trends that may be viewed on a fashion runaway a month ago being sold at stores at pocket friendly prices. This was replicated in the growth that major fast-fashion brands Zara and H&M achieved in the country. In 2017-18 Zara’s growth was up by 73 percent year-on-year which assured its strong standing in India. Also, H&M which experienced a reduced growth was still able to garner a 19 percent year-on-year growth. The market for fast fashion brands is expected to grow backed by a 2017 government announcement approving 100 percent ownership of foreign businesses in India. Post the announcement of this regulation, another major fast fashion brand Uniqlo has expressed its interest to enter the Indian apparel market.
‘Gone are the days when manufacturers had to make heavy capital investments to start a new retail outlet or pay for a prime spot in a shopping complex. With the rise in internet retailing, it has become easier for new apparel companies to enter the market’
CHALLENGES FACED BY MANUFACTURERS
Increase in Customs Duty to Impact Apparel Manufacturers
With the objective to give a further push to the government’s ‘Make in India’ initiative which would primarily focus on domestic manufacturing, the government made announcements in 2018 where the federal budget imposed an increase in the customs duty on a range of imports which also includes textile products ranging from jackets, shirts to carpets. This recent tax regulation has resulted in doubling of tax rates from the earlier 10 percent to 20 percent impacting mostly foreign players and domestic players which have their production facilities outside India. This includes major foreign companies such as H&M and Zara. On one hand, this hike is expected to create a delay for new foreign brands that planned to enter the Indian market, on the other they will also impact the expansion initiatives of several global brands already present in the country. Also, domestic players that have established their manufacturing facilities in other countries to benefit from cheaper labour costs and relaxed government regulations are set to increase their domestic production to ward oﬀ this hike.
Rise in Raw Material Prices
The textile industry is experiencing a surge in raw materials prices specifically cotton and dye. As these are amongst the major raw materials required to manufacture textile, a fluctuation in their prices directly impacts the final price of the product. China has increased their import of dyes, creating a supply crunch and impacting prices.
Considering the above trends, the shirts category is poised to grow strongly in the next five years. Though it currently faces adverse eﬀects due to certain factors such as rise in raw material prices and increased customs duty, it would not impact the industry growth for long. Competition in the market would however continue intensifying due to the limited entry barriers. Also, as the e-commerce and retail scenario in the country continue experiencing improvements, the demand would continue growing backed by a large youth population that has the disposable income and aspiration.
Men’s Shirts: Shirts include all garments with a collar and a full vertical opening with buttons. Both casual and formal/business shirts are included.
Women’s Shirts and Blouses: Shirts include all garments with a collar and a full vertical opening with buttons. Tennis shirts are excluded as they don’t have a full open front. Blouses are often made of cotton or silk cloth and may or may not have a collar and sleeves. Blouses are generally more tailored than simple knit tops and may contain feminine details such as ruﬄes or embroidered decorations. Please note that only blouses with an open front are included here, garments without an open front are included in tops.