ECONOMICAL ASPECT OF INDIAN FASHIONMade By : Neelanshu Nilay Roll No.- 15 Justin Michael Ekka Roll No.- 11

CONTENTSIntroductionParametersThe Fashion Industry TodayConsumer Behaviour PatternRecessions Effect on IndiaRecoveryFuture of Industry

Fashion is the term which reflects the state of mind. It is generally associated with textile, garments, gems & jewellery, leather and other accessories.FASHION

FASHION AND ECONOMYIt is said that fashion's wider contribution to the world economy in influencing spending in other industries, ranging from IT to tourism, was calculated as more than 16 billion pounds.Indian Textile sector is the largest foreign exchange earner, contributing to approximately 16.63% of Indias exports, 4% to GDP and 14% of industrial output.

PARAMETERSThe analysis of the fashion industry is based on the parameters including sales turnover, total income, total expenses and net profit.Fashion's direct economic contribution to Gross Domestic Product (GDP) was collated by analyzing the industry's profits and wages across a wide range of fashion products and items -including womenswear and menswear through to handbags and shoes -plus the contribution of fashion education, fashion marketing and fashion media.

Fashion is in an era of change driven by designers, consumers and brands

THE FASHION INDUSTRY TODAY Now-a-days fashion industry encompasses a wide range of professions from designers to manufacturers, fashion retailers, magazine publishers, journalists, fashion marketers, lecturers and business managers.Indian Fashion is also evolving and innovating with growth in online fashion retail, sustainable clothing lines, as well as modern textile R&D and manufacturing products.

THE FASHION INDUSTRY TODAYToday there is a whole new breed of experimental designers with no qualms about any mode of self expression A complex fashion language driven by established and new designers.Rise of new target groups across the diverse sub-continent.Increased awareness of fashion accelerated by advances in technology and media proliferation.

THE FASHION INDUSTRY TODAYA Mlange of influences due to globalization and the more recent Indianisation resulting in a shift in the socio cultural, economic, demographic and psychographic make up of the country; these directly and indirectly have an impact on fashionEmergence of India as a source of inspiration for Indian & International designers; Surge in popularity of Indo western garmentsThe pivotal role of cutting edge in the world of design, and showcase events such as WILLS INDIA Fashion Week and LAKME INDIA Fashion Week are driving innovation and growth within the industry itself, as well as attracting millions of visitors and investors from across the globe every year.

Indian Fashion Industry TodayThe fashion industry consists of four levels:

The production of raw materials, principally fibers and textiles but also leather and furThe production of fashion goods by designers, manufacturers, contractors, and othersRetail sales And various forms of advertising and promotion.

These levels consist of many separate but interdependent sectors, all of which are devoted to the goal of satisfying consumer demand for apparel under conditions that enable participants in the industry to operate at a profit.

International Recognition of Domestic DesignersThe Indian fashion industry has gained international acclaim and recognition at several global forums. This has also helped attract a large number of international clients to the country.Ritu Beri, an internationally renowned Indian designer, has presented her work in various international fashion weeks, including the those held in the US, London, Paris, Mumbai, and Bangalore.Indian domestic designers, such as Rina Dhaka, Anamika Khanna and Manish Arora are gaining international recognition.

India is considered an attractive market for luxury brands about 50 premium and luxury brands including Jimmy Choo, Gucci, Christian Dior, and Chanel have opened stores in India in recent years. Apparel manufacturers are now shifting production to low labor cost Asian countries such as India.Consumer spending on fashion products has grown at 7.1% annually from 2002 through 2007.

Source: Assocham Financial Pulse

FDCIUniting the voice of designers and upholding the spirit of fashion in India - the Fashion Design Council of India (FDCI), is the apex body representing the interest of the 'Business of fashion industry.Established in 1998, FDCI has been a facilitator and a catalyst for the advancement of the Indian Fashion Industry, in keeping with the dynamic market forces.FDCI has taken Indian Fashion global.FDCI advices and assists fashion designers, retailers, models, make-up artists, hair stylists, choreographers and manufacturers alike in improving business practices and raising professional standards while creating domestic and international opportunities.FDCI offers various opportunities to promote the business of fashion and recognizes the potential of Indian fashion designers through its four platforms - Wills Lifestyle India Fashion Week Autumn Winter and Spring Summer showcases, the HDIL India Couture Week, and now Van Heusen India Men's Week.

CONSUMER BEHAVIOUR PATTERNMarketing is based on identifying, anticipating and providing customer needs it is important to understand them.For marketers to satisfy consumer needs more fully than competitors it is important to recognise the elements that influence buying.Main factors influencing consumer behaviour patterns, particularly when purchasing fashion items are weather, comfort, trend, brands or labels, price range, demands, cultural etc.

What Fashion Trends Say about the EconomyFashion magazines and trendy shoppers arent the only ones who pay attention to the ensembles designers send down the runway. Economists also look to designers to forecast consumer consciousness and trends.For instance, the lengths of womens hemlines have been used to help track dips and rises in the stock market since the late 1920s. The hemline indicator states that skirt lengths represent consumer confidence and levels of optimism; the higher the hemline, the more free the spending and the lower the skirt, the more modest we are. In times of economic booms, micro-minis showed up everywhere. Of course, fashion and the economy dont have a cause-and-effect relationship, but whats in style is an excellent barometer for shoppers feelings about their financial security.

Red Hot LIPS THEORYSurprisingly, cosmetic companies often see a rise in sales during slower economies. Its called the lipstick indicator and the theory states that people turn to inexpensive luxuries, like a great inexpensive lipstick, during times of financial stress to help them feel better. In 2001, for instance, cosmetic companieS in US noticed record lipstick sales shortly after September 11, causing see a correlation.

Pop Stars and Sports Stars: Cultural Icons or Commercial Manipulators?Physical imitation of pop stars in which the self-styling of teenagers is undertaken primarily to match that of their idol(s).It is at this stage that the tweenager a media-constructed age category that describes an expanding and increasingly powerful social group comes in light. Tweenagers are children aged 711 who are more worldly-wise, fashion-conscious and media-aware than children of this age used to be.Wider socio-economic factors have led to the emergence and market significance of tweenagers. They are often from small families with dual earners ensuring households with sizeable disposable incomes, they are able to draw upon strategies such as pester power to get their own way, and they have a high awareness of labels, media and technology.

Influence of fashion on childrenA popular trend acts as a key influence and reference point in the lives of children, with particular focus on the concept of fashion and the consequent consumption of childrens clothes.The first influence is sport, including the activity itself, the associated brands and logos, and the styling of popular sports stars, and the second pop music, its stars, their videos, their outfits, overall image and lifestyle, and their own clothing lines.

INFLUENCE OF FASHION ON CHILDREN The concept of fashion, and its portrayal within certain aspects of popular culture, play a key role in defining childrens social identities. A popular trend influences and interact with children in complex, highly nuanced ways: for example impact on the clothing/body interface, altering childrens self-styling and the presentation of their identity influences can be used to help create perspectives on clothing, helping a child to formulate ideas and express opinionsdrive new wants and purchases, initiate shopping trips and encourage children to select their clothes according to current trends or certain looks. The concept of fashion, and its portrayal within certain aspects of popular culture, play a key role in defining childrens social identities and contributing to the economy.

Consumer BrandAwarenessRising affluence has increased brand awareness among Indian consumers. According to the Nielsen Global Luxury Brands Study, India is among the most brand conscious countries in the world, with 35% of Indian survey respondents reporting to buy designer brands

The fashion industry, in 2009, undergoes a dark phase with consumers slashing their spending on apparel.Customers were more interested in basic clothing that can be versatile. They were less interested in "trendy" this or that, because it costs more. They just want a little more bang for their buck because we still want to look our best even if times are tough.

RECESSION: DARK PHASE IN INDUSTRY

RECESSION IN FASHION APPAREL INDUSTRYGrowth rates in the net profit of companies in readymade apparel, gems & jewellery and leather products declined by 151.7 per cent, 81.8 per cent and 445.7 per cent respectively in FY 2008-09 as against ostensible growth rates of 38.2 per cent, 7.4 per cent and 87.6 per cent respectively during the pre-crisis period (2005-08).

RECESSION IN GEMS & JEWELLARY INDUSTRYSeverely hit by the economic slowdown, Gems and Jewellery is another sector which dragged the fashion industry in deep trouble. The sector faced a decline of whopping 81.80 per cent in the net profit during 2008-09 as against a positive growth rate of 7 per cent during the pre-crisis period. External demand for the sector dried up due to the global recession.

RECESSION IN LEATHER INDUSTRYLeather products which include finished leather, leather footwear, leather garments & clothing, bags & handbags and other accessories & products faced the grip of slowdown and the demand of these products came down drastically. Also, India's leather exports posted an almost flat growth rate in 2008-09 owing to slump in demand in major overseas markets.The companies engaged in leather sector faced a huge dip in profitability in 2008-09 as the net profit declined by a staggering 445.70 per cent. In stark contrast, the sector showed a high positive growth in net profit in terms of CAGR of 87.60 percent during the pre-crisis period.

FACTORS RESPONSIBLE FOR SLOWDOWNHigh operating cost borne by the textile sector is the major factor responsible for the shrinkage in the net earnings of the readymade apparel companies.The CAGR of net profit in the sector, which was 18.3 per cent during the pre-crisis period (2005-08), declined by 9 per cent in last fiscal 2008-09.The slowdown in the economy and the major fall in the exports figure in last fiscal 2008-09 are attributable for this negative dip in the net profits of the readymade apparels sector.

RECOVERYDuring the first quarter of financial year 2009-10, the scenario in the apparel sector has improved gradually with an increase in demand. Companies engaged in the leather business saw a growth in average profit which rose to 16.13 percent in the first quarter. The average sales of the leather companies also went up by a whopping 40 per cent in the same period.

RECOVERYVibrant colours like white, aqua, powder pink have started to replace the gloomy colors like gray and parliament blue of economic slowdown.According to market research this also has to do with the 2009 global financial crisis and the recovery in the economy and the positive atmosphere that has formed due to the recovery from the crisis has influenced fashion as well.

FUTURE Between 2008 and 2012, the Indian fashion industry is expected to grow 178%, and reach USD 189 MM by 2012 The growth of the Indian fashion industry is highlighted by the increase in the number of large fashion events (from 1 in 2004 to 5 in 2008) Industry growth in India is mainly driven by the growing exposure of domestic designers at international forums, but growth is also supported by other factors such as the launch of focused business education courses for emerging designers and the establishment of an industry association

FUTUREThe scope of fashion design jobs is therefore vast and extends beyond Indias markets to global markets too. Fashion designers such as Ritu Kumar, Raghavendra Rathore, Rohit Bal, JJ Valaya and Ritu Beri are known worldwide.Institutions such as the National Institute of Fashion Technology (NIFT) provide training to budding fashion designers to develop their talent and become entrepreneurs in the fashion world.The Indian Fashion Weeks has become an international fashion event, with buyers from international stores making an appearance to transact business.

Even though the Indian economy is growing at a robust pace, the per-capita income of the consumers is still too low to significantly boost the purchasing power for the high-end fashion industry during the economic downturn - Sajjan Jindal President, Assocham

ACCOMPLISHMENTSThe Indian School of Business (ISB) launched a program on Business of Fashion: Strategic Brand Management in 2005In 2008, a group of domestically established designers founded the Fashion Foundation of India (FFI). The aim of the association is to assist designers and fashion manufactures in growing the Indian fashion industry at international level

The foundation will focus on developmental activities, incorporate best practices across areas, facilitate business collaborations and undertake other initiative in the interest of the industry other than just fashion events Meera Ali, Fashion Designer

A HIGH POTENTIAL MARKET BUT WHATS MISSING??

THERE ISTHERE ISNTA shallow awareness ofdiverse target segmentsAn in-depth understanding toidentify diverse requirements& new segmentsAn ability to predict theeffect of regular mediainfluences on existingtarget groups;dependence on westerntrend adaptationsAn ability to forecastfashion adaptations acrossa diverse mapA traditional static,consumer-research basedapproach to design &strategyA dynamic approach driven byan understanding of trends ,and shoppers along withtraditional consumer researchMostly independentdesign and businessstrategiesA cohesive design andbusiness strategy that is borneout of trend, consumer &shopper research

WHAT NEEDS TO BE DONE?

Explore the Indian fashion landscape in detail using a combination of trend, consumer and shopper researchElaborate existing and Identify potential target groupsPropose and align strategies with research findingsForecast style, color and texture trends

CONCLUSIONChanges in fashion help to keep the manufacturers, distributors and retailers of clothing and footwear in business. It also provides work for advertisers, models and various others. The media benefit from the advertising revenue.

"I think there's probably going to be a shift away from mass-marketed, disposable clothing to more timeless pieces, things that are going to last for a long time. People are going to look for quality over quantity," - Ritu Beri

BIBLIOGRAPHYAssocham financial pulse study- August 2009Grail Research, LLCwww.insightinstore.comwww.fdci.nic.inwww.naukarihub.com

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