In a country where wardrobe vanity and the importance of looking sharp is finally pushing up, partly due to globalisation and corporate culture, innerwear is still low on the shopping lists of both millennials and the working-age generation…
An Introduction to the Men’s Innerwear Category in India
With rising disposable income, awareness of global trends, the need for self-expression and an aspiration to be noticed has made men more fashion conscious today. Men traditionally did not pay enough attention to their underwear and would settle for irrationally low-price points when it came to buying quality innerwear. They would also only buy underwear once or twice in a year. This is rapidly changing in India where men have begun to consider innerwear as an essential not just for personal hygiene but also to make a fashion statement. No longer is innerwear shopping an after-thought, but an underwear is a well thought out decision, made after careful consideration of comfort, functionality and design.
The men’s innerwear category offers the promise of a lucrative future. ICICI Securities estimated the market to be worth `24,000 crore, with mid-premium and premium segments making up 40 percent or about `9,500 crore. This is expected to grow to `47,000 crore by 2020, and the premium, mid-premium segment is expected to double, growing at 17-18 percent CAGR to `20,000 crore by that time.
Innerwear Market Trends
In a country where wardrobe vanity and the importance of looking sharp is finally pushing up, partly due to globalisation and corporate culture, innerwear is still low on the shopping lists of both millennials and the working-age generation. Having said that, there is a clear premiumisation trend that exists which offers a huge opportunity in medium and premium categories for brands to capture.
Buying behaviour trends have been very disappointing but are also fast-changing. Majority of men buy 3 times or less, and 3 or less at a time thus they might want to buy more premium products. What this also means is that, since buying is less frequent, consumer might tend to buy what has previously worked for him and less prone to be innovative or try something new. More than 75 percent men buy it as replenishment of stock than any trend/fashion. Buying frequency is between consumer staple and consumer durables, useful life between both and ticket size is near consumer staples, this means more prone to premiumisation. The inference thus drawn can be that the consumer prefers premium, branded underwear while displaying brand loyalty making the probability of experimentation low. The larger cities are nearing saturation and the real evolution of the category will be in tier 2 and 3 cities. 65 percent value of the market share today is coming from urban-semi urban areas while the rest belong to rural areas. If brands play it right on the pricing front and offer product differentiation, the adoption in tier 2 and 3 could
potentially be faster than metro. That is where the bulk of the market is, but these cities/towns are extremely value conscious and price sensitive. The sentiment of affordability and how the product can be an enabler in upgrading him is the biggest driving force. Given that India is still a country that is sensitive to price points, innerwear companies are battling even in the operational side of the business, trying to make the best product for the cheapest price.
Consumers are shifting everyday from value retailing to lifestyle retailing for a better brand experience as a whole which presents a fantastic opportunity for brands to create brand loyalty through memorable messaging, engaging product experiences, packaging innovation and more. What has further added a new dimension as India inches towards becoming a digital economy and young consumers become more internet-savvy is the highly tech-driven e-commerce model that offers everything from massive discounts,
same-day delivery to try-before-you-buy. This consumer is fickle, has a low attention span and won’t invest in a product unless it offers something unique. Every brand and retailer is clamouring for this customer’s attention and retention making unrivalled product and brand differentiators the need of the hour.
The Retail Landscape
The retail industry in India has undergone a paradigm shift in the past decade and if predictions are anything to go by, it is set to become a force to reckon with in the next few years. Positive policy frameworks introduced by the ruling government with liberalisation of FDI as well as uniform taxation through GST has offered a level playing field. Glitzy malls have mushroomed even in remote satellite towns promising to offer a global experience, transforming the way India shops. It is growing at an unprecedented rate projected to grow to $1.3 trillion by 2020 from the level of $672 billion in 2017. While traditional retail and unorganised trade still rules, organised retail penetration is growing at 25 percent and is expected to be over 10 per cent of the total Indian retail market by 2020. For innerwear brands, traditional retail, especially in large cities has always been a capital-intensive affair which resulted in being an entry barrier.
Innerwear retail on the offline front in India is heavily dependent on MBOs. This MBO dominance implies tough competition and tougher trade terms for brand owners. Brand awareness, pull and demand has a direct impact on receivables. MBOs typically don’t have trial rooms which means innerwear is not tried-on. Brand loyalty determines purchase decision as a result of this, which in turn further affects entry of newer brands in the market. With the household consumption expenditure on a steady rise of 8.6 percent year on year since 2015, people are looking for avenues to spend more and the absence of options in retail stores is driving audiences online in search of better products. That said, even in the e-commerce sphere, with entry of large companies and international players with massive budgets, competition has gotten intensified for homegrown brands. Social media too is boosting online sales both for home-grown and established brands as well as retailers who are staking claim to their share of the consumer pie.
The Changing Mindset of the Indian Man
New aspirations and lifestyle changes have made buyers more brand conscious. What makes this possible is that consumer expenditure has been on an upward swing and is set to double in the next couple of years. This is the result of the new middle class emerging not just in cities but also in small towns. These are the educated and aware, given their exposure to the internet and trends at large, making them tough-to-please customers.
Underwear is one of the most private and personal decisions in menswear because only very few people will see it, yet it is worn every day, all day, right next to the skin. Comfort is paramount for the buyer and everything from the fit to the quality of the fabric is carefully inspected by him. Even in a price-sensitive country like India, while competitive pricing continues to govern all pricing strategy, there has been a marked transition from value-for-money to superior product experience as the key driver for underwear buying.
Innerwear has long been the most underrated garment in a man’s wardrobe. This has slowly, but surely begun to change. The market is ready for innovators and disruptors in the men’s innerwear category. At the core, product superiority and design style will always be the key differentiator but sensory value of trendsetting designs and colours, incomparable softness and breathability for comfort will help seal the deal for a brand. Men are now asking poignant questions — why does men’s underwear have to be limited in colours, designs and fabric? Why do men have to settle for boring underwear? Comfort and fit is a given for innerwear but what about sustainability? Where is the fashion and fun quotient in the segment? To get the attention of this male consumer, everything from the product to its communication and packaging
needs to engage the target audience in a way that is simplistic, impactful and provides a solution to a need.
The Innerwear Innovation Game
The changing lifestyle has resulted in demand for new innerwear categories such as performance innerwear
for runners, cyclists, bodybuilding and so on. Body positivity is a growing trend so the much-ignored niche category of big and tall men is now asking for differentiated plus-size products that address their specific underwear problems. While cotton still reigns supreme, there is growing experimentation with bamboo, modal and other fibres in brands to please the tribe of discerning, environment focused, globally aware and brand conscious consumers. Absorption and moisture-wicking are areas prime for innovation given India’s climate and better absorption means undies never get wet with sweat, no chaffing and there is built-in product versatility for any activity. Growing use of mobile phones and the fact that men keep it in their pant pocket calls for hi-tech fabric that will prevent mobile radiation from causing health issues.
Innerwear has long been the most underrated garment in a man’s wardrobe. This has slowly, but surely begun to change. The market is ready for innovators and disruptors in the men’s innerwear category.
The Role of Sustainability
Fast fashion is a lot like fast food, unhealthy, unethical and unsustainable. Unless specified on the label as fair trade or organic, any clothing one wears contains harmful dyes, toxins and pesticides that come in contact with skin of the wearer causing health hazards and also seeps into the Earth’s system wreaking havoc on the environment. To begin with, the facade of trendy desires and over-consumption is set to evaporate with growing concern over climate change. The trendsetters were millennials but the generations that follow have become aware and only invest in brands that appeal to their evolved sensibilities. The Indian urban consumer has been an early-adopter and the masses are sure to follow. They are willing to pay a premium for it if required but refuse to compromise with their values. Manufacturers now need to ensure they are using organic fabric and follow fair trade practices primarily in regard to farmers, producers, factory workers and artisans so we have a sustainable fashion industry that does not encourage or tolerate exploitation of people and the environment. This trend is picking up in the innerwear industry but is yet to see a lot of players solely focusing on this. One way the industry can do this is to create a circular economy which would mean to recycle by either creating future products from leftover fabric or previously used materials so we can minimize the use of land, water and labour. An innovation on this front is likely to also transform buying behaviour.