Indian denim industry: Its all in the jeans

Written by Abhishek Chakraborty | Updated: May 11 2014, 07:20am hrs
JeansArvind Singhal, founder, Technopak Advisors, feels the Indian market offers a great opportunity for brands to launch new products. Reuters
The Indian denim industry is showing continual growth trends over the years. With newer territories, technologies and trends, the market is only going to see some exciting moments ahead

There is a buzz in the industry that Kishore Biyanis Future Lifestyle Fashion is buying a 75% stake in home-grown denim company, Spykar Lifestyle, for around R100 crore, in an apparent attempt to shore up its fashion and lifestyle play. If the reports doing the rounds are true, Spykar will join Futures current denim portfolio of Jealous 21 and Bare. Biyani has 35 fashion brands with a combined turnover of over R7,000 crore.

Arvind Singhal, founder, Technopak Advisors, feels the Indian market offers a great opportunity for brands to launch new products. What India needs is more denim brands. Today, denim wear is going deeper into the rural markets. Not only men, even teenage girls in rural areas are opting for denim wear. This calls for more brands that can cater to the demand, he adds.

Although there is no official confirmation on Biyanis Spykar deal, the news comes at a time when the Indian denim market is showing continual growth trends year on year, seasonal fashion upheavals like coloured non-denim trousers notwithstanding. As per a recent study by Technopak Advisors, the denim market in India is set to nearly double to over R13,000 crore in the next three years (by 2017), owing primarily to youngsters obsession for the cult fabric. The boom will be fuelled by not only an increasing demand from small cities and rural areas, but also acceptance of the fabric at workplaces, the study adds. In terms of volumes, the denim market is estimated at 300 million pairs of jeans, which is projected to grow to 550-600 million by 2015, reveals Technopak.

Gagandeep Singh of Denim Manufacturers Association, an industry body, adds: We are the second-largest producers of denims after China. Of the total denims manufactured in India, 700 million metres are used in the domestic market and the rest is exported.

Kavindra Mishra, CEO, Pepe Jeans India, feels this is one fabric that will never completely go out of fashion. The denim market in India is growing at a very fast pace, with the market for branded jeans constituting over R2,000 crore in the country. India is growing at the rate of 10-15% per year, he adds.

Mass apparel

Theres a reason behind the popularity of denim wear. Its among the most versatile and practical fabrics, loved in its time by soldiers, railway workers and, of course, since the mid-1950s, by any fashion follower worth his or her credentials.

But what does the current denim market in India have to say about one of the worlds most preferred fabrics Currently, India has a capacity to produce 1 billion metres of denim fabric per annum. The demand is largely dependent on metros and mini-metros. As per Technopak, metros and mini-metros, with about 7% of the population, contribute to about 50% of the market share in denim wear. Tier II and III citieswhich constitute about 8% of the populationcontribute only 16% of the market share in denim wear and have tremendous scope for expansion. Hence, major brands across India are eyeing this market.

Market leader Levi Strauss India, the wholly-owned subsidiary of American denim firm Levi Strauss & Co, has also consolidated and strengthened its franchisee portfolio in the past 12 months, and has opened new flagship stores in key locations, including smaller cities. We have bolstered our presence in key national and regional chain stores through shop-in-shops, and extended the availability of our brand in smaller cities through an entry-level, price-point range called My First Levis, says Sanjay Purohit, MD, Levi Strauss India.

In 2013, the company had to undergo a series of changes in its market strategies. It stopped the expansion of its low-cost denim brand Denizens and has now started focusing on the flagship Levis franchise. Recently, it also introduced an EMI scheme for buying jeans.

Meanwhile, the growth story of domestic denim companies in India continues unabated. Mafatlal Industries, a market leader in manufacturing and exporting denim fabrics in India, had a denim manufacturing capacity of 20 million metres per annum (MMA) in 2012, which increased to 25 MMA in 2013 and is expected to reach 30 MMA by 2015, as per company sources. Ahmedabad-based Arvind Ltd, another major player in India, has seen a growth of 10% on a year-on-year basis. Recently, it bought a 49% stake in Premium Garments Wholesale Trading, a joint venture that sells the fashion brand, Calvin Klein, in India for R100 crore.

Arvind Ltd is also the Indian partner for US-based Phillips-Van Heusen Corporation (PVH), which globally owns Calvin Klein trademarks for selling Calvin Klein jeans, apparel, accessories and underwear in the country. Calvin Klein Jeans currently has over 40 stores and over 45 shop-in-shops in India.

So whats driving this growth Rajiv Dayal, MD of Mafatlal Industries, believes a favourable demographic profile, expansion of retail in the country, rapid growth in tier II and III cities, availability of global fashion brands like Zara, Levis and M&S in the country and denim wear endorsements by Bollywood biggies are behind the boost in the domestic market. New denim product categories like childrens wear, lifestyle fashion products, formal office wear and furnishings will also drive the growth, he explains.

The focus would be to enhance the consumer experience and business in stores and at the same time expand the brands presence by adding 25-30 points of sales each year for the next three years, adds a spokesperson for Arvind Ltd.

Future designs

Denim is one of the few long-sustaining imports of the western culture in India. While elsewhere in the world, it found takers as work wear, denim in India started as a youth story, as the youth found it to be fashionable and comfortable, and gave it the necessary style quotient. With the young constituting about 73% of Indias population, denim manufacturers are only too keen to target this audience.

Keeping in tune with the times, brands are now offering innovative products to market their products. Wrangler, which calls itself the original outdoor denim brand, has come up with its silver shield denims. The technology is said to protect denims from odour-causing bacteria, making it an ideal companion for long rides. Wranglers other innovation, the water-repellent denim, repels water, making it a comfortable wear while on a holiday or during trekking.

Anshul Chaturvedi, marketing head, Wrangler India, says, Water-repellent denims are not plastic, but breathable. We have also launched abrasion-resistance denims called tough gear. As the name suggests, it has four times the strength of an original denim.

Levi Strauss has created a process in which it uses 100% recycled water for some parts of its garment production. The process, which the jeans manufacturer claims is a first for the industry, is the result of a new water-recycling standardverified by third parties, the company claimsthat aims to reduce the impact of garment production on fresh water resources. The company has also started making jeans from recycled plastic bottles.

This spring, the brand also launched the Levis cool collection, woven with advanced thermo-regulating fibres, which help you stay dry and cool in summers, adds Purohit of Levi Strauss India.

For Kedar Apshankar, COO, Peter England, the next big thing around denims is sustainability. Some of the companys collections include Workblues, which come in various shades of blues; vintage jeans; coloured jeans; oxygeans, which save up to 80 litres of water per pair in its manufacturing; and Misteans, which is a washed jeans with a misty and iced look. Khakeans is a smart combination of khakis and jeans. These are basically non-indigo bottoms, which are treated to give them a denim look, he adds. Their price ranges between R1,600 and R1,800.

There are also some brands that are focusing on treatments, distress techniques, coatings and washes of denims. Mishra of Pepe Jeans says their jeggings are a huge hit internationally and the trend is sure to catch up in India as well. The trend of boyfriend jeans, which are huge globally, is slowly entering the Indian fashion scenario. Embroidery in terms of diamantes or lurex is also catching on, he adds. Indians still prefer straight and slim-fit denims though, Mishra adds.

Dayal of Mafatlal feels the new trends in the market include soft-feel denims for children, coated and overdyed denims for men, printed denims and high-stretch denims for women.

Winds of fashion

There, however, is a seasonal wind of fashion that is blowing towards a shift in the consumers wardrobe preferences from jeans to coloured trousers. As per industry observers, the drop started some time in 2012 when coloured non-denim cotton trousers made a splash in India.

Suminder Pal, GM (sales and sourcing), FashionAndYou.com, an online fashion marketplace, says the Indian consumer has started to acknowledge a rich sartorial taste when it comes to bottom wear. From red to pink, yellow and blue, almost every colour is being accepted. Everyone is experimenting with different colours and patterns of the timeless pants or non-denims. Some current hot favourites such as chinos and Jodhpuri pants are adding an air of indefinable elegance and sophistication to the wardrobe, says Pal. In terms of sales, though there are no definitive figures. The fashion portal has seen considerable growth in coloured pants and trousers that have substituted denims to some extent.

One of the reasons for people to opt for non-denim trousers is that they are lightweight and provide a wide variety in terms of colours, says Praveen Sinha, co-founder and managing director of online store Jabong.

However, Sinha is of the belief that even though cotton pants are currently dominating the market, denims will remain an insatiable obsession for shoppers. Our sale of denims is still growing by about 10-15% month-on-month. Though the global trend is moving towards non-denims, the Indian market is still high on denims, he adds.