Readymade Garments Industry

The readymade garments industry (RGI) registered growth rates of over 20 per cent in the years following liberalization in 1991. The technology boom brought about significant change in the attitudes of consumers towards increasing amounts on fashion garments. Consumers wanted something unique and special so as to make an impression in society. Major players in the field saw a great opportunity (Arvind Mills, Raymond, Indian Rayon, Zodiac, Bombay Dyeing, Indus League etc. ) and started offering a wide variety of branded garments through either an exclusive brand outlet (EBO, where only the merchandise of a particular company was show cased) or a multiple brands outlet (MBO, where multiple, brands are offered under one roof). The growth rates in the industry have gone down significantly in recent times due to high rates of excise duty ( 16% now reduced to 12%). Recessionary trends in other sectors of the economy, heavy competition, customers’ reluctance to spend on high priced garments, quota restrictions on exports (likely, to be abolished in 2005) etc. Right now, the branded readymade apparel, markets is estimated at about Rs 5000 crore and it is expected to grow at 15 per cent in the years ahead.
Leading Brands in RGI:
Men’s wear (Size Rs 5000 Crore)
1) Van Heusen, Louis Phillippe, San Frisco, Peter England, Allen Solly, Byford.
2) Arrow, Lee
3) Park Avenue
4) Colour Plus
5) Indigo Nation
6) Wills Lifestyle
7) Zodiac, Provogue
8) In store brands like Westside, Oak Valley, Shopper’s Stop.
9) Also brands (Desi brands, from small and medium enterprises) like, TNG, Easies, Koutons , Blackberry’s Indian Terrain etc.
Women’s wear (Size Rs 200 crore)
1) Scullers
2) Allen Solly
Kids wear (Size Rs 450 crore)
1) Lee kids
2) Weekender kids
3) Gini n Jony
Market Scenario:
The women’s wear market is still in its nascent stages, estimated at around Rs 150-200 crore. With growing urbanization and lifestyle changes impacting women employees this segment is likely to see a lot of action. The kid’s wear segment is also catching up with the other two segments and is estimated to Rs 450 crore. Leading players in the readymade garments industry include: Madura Garments ( Rs 350- 400), Arvind Mills (250 – 300 crore) and Raymond ( Rs 350 – 400 crore). Other major players include Zodiac, Wills Style, Provogue, Indus League, Bombay Dyeing, Levis etc. Prominent retail chain such as Shoppers Stop, Globus, Ebony, Westside, Pantaloons etc. have come out with their own in store brands in recent times. The branded garments are retailed through EBOs or MBOs positioned in upmarket and are known to possess a considerable amount of weightage in customer’s minds in term’s of their special class and sophistication. With organized retailing picking up in a big way, every player is interested in grabbing a fair share of the market through capacity expansion, acquisition of competing brands, brand building through celebrity advertising, establishing customer niches, targeting export markets etc.
Consolidation Moves:
The big players in RGI staking a claim to a fair share of the consumer’s wallet are moving ahead very fast to acquire competing brands. The logic behind such moves is quite simple they want to offer a comprehensive range of garments to the consumers straddling multiple price points. Thus, Indian rayon took over the brands of Madura Coats a few years back and increased its markets (top brands include Louis Philippe , Van Heusen , Allen Solly, Sanfrisco) the company has strong presence now in both semi-formal categories. The company has also extended the Allen Solly brand women’s western wear segment.
Source: Strategic Management

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