Apparel and Footwear Specialist Retailers in India

PROSPECTS

Retailers looking to digital platforms to revitalise growth

Apparel and footwear specialist retailers continued to face intensifying competition from apparel and footwear specialist retailers e-commerce as the latter are able to offer discounts to attract consumers. Given the higher overheads, store-based retailers are unable to match this level of discounting and are also further limited by space restrictions, which also limits the range of stock they are able to carry.

Significant hikes in rental costs force change in strategy from tier-one to tier-two and tier-three cities

Most retailers are taking advantage of the retail downturn to negotiate longer leases for larger spaces at lower rents, as well as adding more experiential elements to their flagship stores. Swedish fashion retailer H&M is looking to open large stores in shopping centres; similar expansion is expected from Zara, Max Fashion and Gap.

A focus on the shopping experience to compete with e-commerce retailers

Players such as Van Heusen and Myntra tested new concept stores that focus on the in-store experience, with smart mirrors, smart fitting rooms and the use of different technologies to create a fun purchasing experience. Many younger customers visit physical stores to browse online catalogues, sit down and have a chat and then leave, coming back and completing the purchase during a subsequent visit with their parents.

COMPETITIVE LANDSCAPE

Reliance Retail leads a ramp of domestic players in this highly fragmented channel

The leading player in apparel and footwear in India during 2019 was Reliance Retail with its Reliance Trends and Reliance Footprint brands. The company’s revenue is growing thanks to rapid outlet expansion of its Reliance Trends brand.

International brands are set to offer tough competition in the forecast period

The inflow of international brands has increased, with brands such as H&M, Gap and Zara, amongst others, entering the market over the review period. International brands are also expanding their physical presence, leading to growing competition.

Store-based apparel and footwear specialist retailers increasingly also embrace e-commerce

E-commerce significantly increased its presence in India over the review period. As consumers’ shopping patterns evolved, consumers were more comfortable buying apparel and footwear online.

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