From need-based to fashion wear, and back to basics

From need-based to fashion wear, and back to basics

Vijay C Roy in Chandigarh

In February 2016, Woolmark, which provides its trademark to woollen garment manufacturers, for the first time hosted a fashion show in Ludhiana. Earlier, such shows were only held in metropolitan cities, but an unusual slump in sales due to a warm winter in north and central parts of India forced the organisers to hold the event at the heart of India’s woollen and hosiery industry.

The company convinced its partners to go in for innovative designs as traditional products might not get buyers in the not-so-cold winter. Thus, it became prudent for retailers to incorporate strategic planning and innovation along with fashionable products, competitive pricing, aggressive marketing, etc. to cater to their target customers and capture the maximum market share in the winter wear market category.

Taking a cue, many of the manufacturers diversified into wool-blended products and introduced innovative designs. There were two reasons behind that. Firstly, the high prices of pure wool normally imported from Australia and New Zealand were acting as a deterrent to expand the domestic market, which is price-sensitive. And secondly, winter wear had evolved more as fashion wear than a need-based product.

However, December 2019 was unusual for manufacturers. The harsh weather, coupled with designs and competitive pricing, propelled sales by up to 20 per cent in a single month. The major beneficiary inarguably was Ludhiana, which accounts for 90 per cent of the winter wear market.

Unprecedented sales

For the past few years, the winter season, which normally extends from November to March, has been warm and that affected sales, ultimately putting a strain on manufacturers. As a result, the retailers tweaked their winter product mix, anticipating shrinking of the cold period. However, last month was exceptionally good for the manufacturers as well as retailers.

As the mercury sank to new lows, shoppers rushed to buy warm apparels, be it blended yarn fabric or pure wool.

Manufacturers across the spectrum witnessed double-digit sales despite the fact that pure wool fabric costs twice as much as the blended one.

“We have witnessed over 20 per cent increase in sales during the month of December compared to December 2018. The Indian brands were forced to offer sales to compete with Western brands, which normally put their products on sale during the second week of December. However, considering the low temperature, even if the sales were introduced after a few weeks, there would have been many takers,” says Shawl Club (India) chairperson and Shingora Textiles’ MD Mridula Jain.

Pure wool prices, she adds, have risen by 30-40 per cent in the last one year and now touch Rs1,500 per kg. “Still the high prices did not act as a deterrent in the price-sensitive market as an intense cold wave gripped North India and other parts of the country.”

The strong winter has helped in driving sales. “We have witnessed an increase in sales of 15-20 per cent in December as compared to the same month of 2018,” says Harkirat, Managing Director, Aereo Club (Woodland).

Echoing similar sentiments, Sandeep Jain, Executive Director, Monte Carlo Fashions, shares that it is very difficult to quantify the increase in December but adds that his company registered an uptake in sales in both blended sweater segment as well as pure wool segment.

Manufacturers feel the improved sales will help retailers tide over muted sales during the festival season.

Gains for Ludhiana

Currently, a majority of the units in Ludhiana work as vendors for other manufacturers and cater to domestic and international brands. Some even sell their winter wear under their own brand. With repeat orders in hand, many manufacturers have delayed production for summers, which normally starts in the first week of December.

According to Ajit Lakra, MD, Superfine Knitters Ltd, many of the units in Ludhiana have received repeat orders to the extent of 10-15 per cent from the big brands. “Since many of the units got repeat orders this year, they have delayed summer production by two weeks,” he says.

Manufacturers also maintain that the demand has cleared last year’s inventory lying with some units. There is an apprehension that winters may extend till March this year. So, anticipating the good demand and taking a cue from the early response, the industry has taken somewhat of a risk by producing more as compared to last year.

Rs20,000-crore market

  • The winter wear market in India is pegged at around Rs20,000 crore, which includes sweaters, hoodies, sweatshirts, jackets, shawls, cardigans and trousers
  • There are around 13,000-15,000 units in Punjab engaged in manufacturing of winter wear
  • Ludhiana is famous for winter garments catering to almost 90 per cent of the total winter wear in the country
  • In case of winter wear, brands have a significant market opportunity as the margins are higher in comparison to other product categories
  • According to experts, the unbranded segment commands a market share of 50-60 per cent, with the branded segment trying to bridge the gap by innovating and offering new products
  • Demand for winter garments mainly originates in Punjab, Haryana, Delhi, Himachal Pradesh, UP, Bihar and J&K, among other states and UTs

Fabric switch: Current trend

  • Earlier, winter wear was more of wool, now it’s more of cotton and polyester mix, making it fashion wear rather than restricting it to winter
  • Also, blending it with cotton or polyester makes the product economical. For example, a branded blended sweater would cost anywhere between Rs1,500 and Rs2,500 while the pure wool one is priced above Rs4,000. “Earlier, customers would purchase hardly two to three sweaters and used these for years. But now, people purchase winter wear as per the occasion and keep on adding new clothes every winter season,” says Harkirat, MD, Aereo Club (Woodland)
  • In addition, aspirational lifestyle, fashion awareness and rapid urbanisation have resulted in more want-based purchasing of fashionable products in every season
  • In the recent past, the Indian winter wear market has attracted a lot of international and domestic brands owing to these growth drivers