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India is one of the fastest-growing economies and is expected to surpass Germany and Japan to become the third-largest economy by 2025. India represents a $1 trillion retail market and has quickly become the Mecca for Western retailers setting up base to stake claim. With the government relaxing FDI norms, it became easier for MNCs to grab a major share. The Gap Inc, Aéropostale Inc, Desigual, Levi Strauss, Rider, Ipanema and Adidas AG, are some of the companies who have aggressively forayed into Indian territory.
Growth triggers for retail
Around 86 per cent of Indian respondents in a recent study said they were likely to make online transactions with their phones. This is good news for retailers both local and foreign as India’s consumers place a priority on fashion and apparel when it comes to online spending. Many of India’s consumers are technologically savvy, and mobile has become the leading Internet-enabled device for both urban (73 per cent) and rural (87 per cent) users in India. With a steadily growing middle class, and the vast majority of their population below the age of 35 (65 per cent), India is sitting on a mountain of unrealised growth potential for the mobile market.
Growing western influence
According to CLSA, India’s fashion market is a $17 billion industry and is growing 25 per cent year over year. There is a growing trend among India’s population in embracing Western culture and style. Indo-Western wear, a fashion trend that fuses influences from both cultures, is on the rise among pre-teens. And in a recent survey of workforce populations in top cities in India, 64 per cent said they prefer to wear jeans or denim every day. Levi Strauss, one of the original denim brands in the US was the first to explore India as an emerging market and now boasts 185 retail points country-wide. Brands like Aéropostale, Lee and Wrangler have taken measures to regain their share of market by entering India. Zara opened its first flagship in New Delhi in 2010, followed by Mango and H&M.
Due diligence is needed
However, before a company decides to stake a claim of your own in India, one needs to consider the following aspects: Conduct research to better understand how India’s regulatory environment works; familiarise with Make in India; the secret to securing customer loyalty will be in conquering the language barrier, etc.
Textile traders in Ahmedabad have gone on an indefinite strike from Monday to mount pressure on the government to roll back 5 per cent GST on cloth. The decision was taken by Maskati Cloth Market Association, New Cloth Market and Panchkuva Cloth Market. As per the statement 5 per cent GST on cloth is not acceptable to anyone who is in the textile business. To raise the voice against this tax, from tomorrow all the textile markets in the city will go on indefinite strike, as traders will refrain from any kind of transaction.
Textile traders in Surat are already on an indefinite strike for last one week. On Saturday, thousands of traders took part in a massive rally to protest against the 5 per cent GST rate. Union minister Parshottam Rupala on Sunday asked traders to engage in talks with the Centre to resolve the issue instead of staging protests. Rupala says that the reporters that the intention behind rolling out GST was to give a boost to trade and business, not to harass people.
Ethical Fashion Show and Greenshowroom were held in Germany from July 4 to 6, 2017. This time the location was changed. The new space with its open hall with raw walls and huge ceilings and innumerable skylights, provided pleasant brightness, and offered a great backdrop to exhibitors. Compared to the former location, the new one had a clearer layout and structure.
In addition, the lounge-like furniture allowed visitors to rest and relax. Ethical Fashion Show is an international fair for sustainable fashion. Here exhibitors show clothing for men, women and children from different areas such as sportswear, street wear and much more. Also, jewelry, shoes, bags and accessories are on display at the fair. In addition to the exhibition conferences and fashion shows take place.
Ethical Fashion Show presents international casual wear and street wear brands-- supplemented by an extensive program with a knowledge lounge, lectures, catwalk show and get- together events. The focus is on fashion and sustainability in the apparel, clothing, lifestyle and fashion industries.
Greenshowroom stands for elegant designs and sustainable high-grade materials. Exclusive ambience, personal atmosphere and that certain extra something distinguish the extraordinary profile of the fair. Visitors can look forward to fashion, beauty and lifestyle products of the highest standard.
The government is set to reduce tax at source on export of readymade garment following demands of apparel exporters, the government high-ups had already agreed to a proposal of RMG sector leaders to lower the rate to 0.70 per cent from the existing rate of 1 per cent.
The National Board of Revenue is likely to issue a statutory regulatory order in this regard. They were working on reducing the source tax and a summary would soon be sent to the finance ministry for approval. The government increased the tax rate to 1 per cent in the budget for the current fiscal year 2017-2018 from the last year’s 0.70 per cent.
Corporate income tax rate for garment factory owners was cut to 12 per cent in the budget from the previous year’s 20 per cent. The rate of corporate tax, however, was reduced to 10 per cent for green factories. Leaders of the apparel sector says that they placed their demand before Prime Minister Sheikh Hasina for cutting the export tax at the post-budget dinner of finance ministry on June 29. She instructed finance minister Abul Maal Abdul Muhith to take steps to reduce the tax rate. Exporters Association of Bangladesh president Abdus Salam Murshedy says they are hopeful that a SRO would be issued by this month after completion of all legal procedures.
NBR initially set the source tax rate at 1 per cent for garment export in FY 2016-2017 but later cut the rate to 0.7 per cent for the year following exporters demand.
While some stores in the UK are prospering, others are finding this spring and summer a struggle. Recreation and culture spending has fallen for the first time in almost four years.
Consumers are clearly starting to feel nervous about the implications of Brexit, the rise in inflation and political uncertainty after last month’s general election. Spending at physical locations fell 2.4 per cent during June, the second drop in succession. While online spending continued to rise, the 2.9 per cent increase couldn’t make up for the physical store dip. And besides it was still well below the 6.8 per cent increase that had been seen during May.
One bright spot was spending on miscellaneous goods, which includes hairdressing salon visits and jewelry purchases. It rose 5.7 per cent. Consumers are diverting their discretionary cash to essentials. Spending on food and drink rose two per cent in June while the household goods figure dropped as shoppers cut back on expensive items like furniture and non-necessities like home ware. There has been a sharp drop-off of people investing in replacing their old sofas.
The marked deterioration in household expenditure trends since last year comes at a time when households are facing an increasingly challenging scenario of rising living costs and weaker wage growth.
Americans are buying fewer pairs of jeans these days and not spending as much on them as they once did due to the leggings and the yoga pants in fashion. True Religion, which after years of declining sales, filed for bankruptcy protection and announced that it would be closing at least 27 stores. A decade ago, the brand was riding high, commanding hundreds of dollars a pair for jeans with the company's signature horseshoes embroidered onto the back pockets.
But growth has reversed in recent years. Sales of super-premium jeans brands like 7 For All Mankind, True Religion, Joe's Jeans and Hudson fell 8 per cent last year, according to market research firm Euromonitor International. Overall, jeans sales grew slightly in 2016 after two years of declines, as Americans traded down to lower-priced brands like Levi's, H&M and Forever 21.
Designer denim took off in the early 2000s, during an era marked by large, flashy logos. True Religion, founded in 2002 in Manhattan Beach, Calif., was among the first to cash in on the wave of premium jeans, with its lineup of funky designs and washes. True Religion continued to grow during the recession, thanks in part to such celebrities as Britney Spears, Kanye West and Mariah Carey, who were routinely photographed wearing the brand's jeans.
True Religion put itself up for sale and found a buyer in TowerBrook Capital Partners, a private-equity firm that paid $835 million for the company. Sales have continued to slip. Competition was up, and demand was down. Shoppers are more likely to favor low- or moderately priced jeans without large logos and decals, according to Euromonitor. A move away from obvious logos also means it's becoming more difficult to distinguish between the high-end jeans and inexpensive ones.
GST is expected to help micro, small and medium enterprises (SMEs). Since all compliance procedures will now only be online, these enterprises need not worry about interacting with department officers for carrying out these compliances, which was earlier a cumbersome task. Other advantages are an easy process of availing input credit, single point tax, elimination of cascading tax system and simpler taxation, an unified market and lower logistical costs.
Further, they would be able to compete with competition from cheap cost centers such as China, Philippines, and Bangladesh. Toys, low-priced electronics, computer components, crockery, mobile accessories, lightings, stationary, plastic wares, building material like floorings and wallpapers, ceramics are some of the cheap Chinese imports into India.
The GST regime is also expected to usher in lower taxes, seamless input tax credit, logistics savings and market share swings from unorganized to organised players. Among the negative implications of GST for small, medium and micro enterprises are a lower threshold, time limit for return of goods sent on sale or return basis, excess working capital requirement, no tax differentiation for luxury items and services, increase in product cost, tax on stock transfers and deemed supplies, selective tax levying, and higher tax rate for service provider.
To meet the rising demand for composites in wind energy sector Turkish reinforcement fabrics specialist Metyx has agreed to a deal with long-time partner Karl Mayer Textilmaschinenfabrik (Obertshausen / Germany; for the supply of additional warp knitting production lines.
The new lines will provide 12,000 t/y of extra glass and carbon fibre multi-axial fabric knitting capacity that Metyx will install at its main factory in Manisa/Turkey, and at other overseas facilities. The company also has a plant in Hungary, where it recently completed an expansion.
The recent growth of the technical fabrics division and the successful qualification programmes with key OEM customer’s globally producing composite wind generator blades has given Metyx the confidence to place this multi-machinery order with Karl Mayer, says Ugur Üstünel, managing partner of Metyx composites.
Since 2011 the company has stated it has responded rapidly to the Turkish wind industry’s significant growth in the Aegean region, from both wind blade manufacturers as well as other composites sectors in Turkey.
Mali, which produces eight lakh tons of cotton a year, is looking at direct exports of cotton to the Indian textile industry. Niankoro Yeah Samake, Mali’s Ambassador in India, says about 20 per cent of Mali’s cotton is consumed by India. However, most of the trade is through foreign companies. So, there are opportunities to trade directly. Currently, Europe and China are the biggest buyers of the West African nation’s cotton.
Mali produces long staple cotton and only 5 per cent of it is processed in that country and the rest is exported. Mali’s government is offering incentives for investments in the textile sector and there are opportunities for joint ventures too. The government agency buys cotton from all the farmers. Annual cotton production in Mali in the last two years increased from five lakh tonnes to eight lakh tonnes.
Currently, there are no investments from Indian textile sector in that country. Those who start textile production in Mali will have duty-free access to the U.S. and some of the European markets too, he added. In the short-term, Mali is looking at increasing trade with India in the cotton sector and in the long term it will look at other investments.
J Thulasidharan, Chairman, Indian Cotton Federation, says that the price of Indian cotton goes up during the second half of the season and hence, importing cotton could be viable. On an average, about 10 lakh bales of cotton is imported from African countries annually.
India’s apparel exports to the US rose 5.3 per cent y-o-y in May 2017. With this, India’s share in the US apparel import expanded 30 basis points to 5.3 per cent. The country maintained its position as the fifth largest apparel exporter to the US. Growth in India’s export value to the US was mainly due to an increase in volumes. During the month, export volumes increased five per cent. Export realisation grew by 0.3 per cent.
On a cumulative basis, India’s apparel exports to the US grew by a mere 0.3 per cent during April-May 2017. The country’s market share remained unchanged at 5.6 per cent. India shipped out 191.4 million square meters of apparels, a decrease of 0.3 per cent. Average realisation improved by 0.6 per cent.
Among the top four apparel exporting countries to the US, all except Vietnam registered a decline in their export value in May 2017. Vietnam reported a 2.1 per cent increase in its exports in May 2017. The country’s market share expanded 20 basis points to 14 per cent.
China, the leading exporter of apparels to the US, saw a decrease of 0.6 per cent in exports. The country’s share in the US apparel import market fell by 30 basis points to 30.4 per cent. Apparel exports of Bangladesh and Indonesia declined by 1.7 per cent and 9.6 per cent. Bangladesh’s market share contracted by 10 basis points to 6.6 per cent and that of Indonesia fell by 70 basis points to 5.7 per cent.
