Overview: Consumers’ wardrobes, in India and across the world, are undergoing a distinct shift – from formal clothing to casual attire. This trend towards casualisation has provided a boost to the t-shirt market. Their greater level of comfort, superior feel, affordability and fashionableness makes t-shirts an attractive apparel category across consumer segments.
The formal introduction of t-shirts happened in 1913. At that time, the landscape was virtually barren, and filled with monotonous and self-flagellating ‘logo’ tees. Since then, t-shirts have graduated from being a uniform category to becoming a multipurpose, multiuse, all-occasion apparel category across the globe.
In the US alone, the market for T-shirts (knits) is pegged at over US$ 50 billion. India too offers no exception to this trend. The t-shirt market in India is Rs 12,200 crore worth and has a CAGR of 12% every year. Almost 83% of this category is dominated by menswear but women’s T-shirt market is fast catching up, growing at a compound annual growth rate of 17%.
Growth drivers:
1. Comfort characteristics, easy-care properties, affordability, easy-design options using stripes and prints, and a casual look are the major driving forces propelling the t-shirt market in India
2. The increasing trend of Friday dressing is another driving factor for the t-shirts market in India. Many MNCs operating in India, and many Indian companies as well, allow smart-casual clothing as official attire on Fridays.
3. The Indian working class has also started spending more on recreational activities including travelling to holiday destinations and spending time in shopping and exercising, for which they generally prefer t-shirts.
Product Innovations in T-shirts: The fact that Indian youth seek a distinct look has forced t-shirt manufacturers and retailers to explore various dimensions of product innovation primarily related to product design. Many retailers have started providing the option of customizing t-shirts through their websites. Custom t-shirts based on catchphrases coined by content companies such as AIB and standup comedians like Biswa Kalyan Rath and Zakir Khan sell like hot cakes. The demand for t-shirts printed with traditional Indian designs has also gained momentum. In the years to come, the demand for organic cotton-based t-shirts, and those made from recycled products, etc. is expected to pick up in select Indian cities. Such products are already in demand in many western countries.
The global market for custom t-shirt printing industry is expected to cross US$ 10Billion by 2025 at a CAGR of 6.3%.
Challenges and Opportunities: The t-shirt market in India faces its own set of challenges.
A huge chunk of the t-shirt market is unorganized and highly fragmented. This high level of industry fragmentation has resulted in an extremely competitive market wherein product price has become the core basis for competition.
At the same time, t-shirt manufacturing is also highly fragmented yet concentrated, in such knitting clusters as Ludhiana and Tirupur. Smaller manufacturers are grappling with issues of quality management, colour consistency, marketing, etc.
However, these challenges can also be viewed as opportunities for growth and improvement by organized manufacturers, retailers and brands. The increasing brand awareness among the Indian youth will drive the penetration of t-shirt brands into smaller cities and rural India, thus increasing the share of various brands within the t-shirt market. The proliferation of private labels has made t-shirts more affordable for value-seeking consumers in smaller cities.
Impact of e-commerce on brick and mortar stores: Online shopping is growing at a significant rate. The top reasons people like to shop online are being able to shop 24/7, compare prices, and have a greater variety of options. A survey showed that online shopping grew by 14% in 2016-17 compared to only 2% growth for physical stores. Brick-and-mortar is dying!
1. Low Growth- Physical retail sales have been stagnated and growth is lower than previous years, therefore retail chains are forced to open fewer stores. Even footfall during festive season has been reduced which due to online retail.
2. Diminishing Margins- Customers started demanding to match online prices for goods, particularly electronics are forcing retailers to sell at lower prices. Certain brands sell exclusively on the Internet via tie-ups with e-tail partners, thereby denying offline retailers business.
3. Reduced Sales Density- Many customers browse a retailer's physical location to check out the merchandise, but make their purchase online, a practice known as "showrooming." Showrooming as a trend is on the rise resulting in footfalls not essentially translating into sales.
Conclusion: Offline and online retail are likely to coexist in India in the future as well, and both will reinvent themselves to make shopping a more pleasurable experience. Omni-channel retail strategies will emerge more significant as retailers recognize that customers want to shop at their will, in their way, and whenever they want to. However, brick and mortar will remain the cornerstone for retail.
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