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FOREWORD>>Some say the conventional fashion retail model is a fading star. That its relevance in the post-technology world has entered the age of diminishing returns. They might have something going there; brick and mortar is definitely struggling to find a new meaning in the phy-digital universe.

But I also know that conventional fashion retail is not past its prime. Far from it. I think the prime is yet to come. The reason for that optimism is evident; never before have fashion companies had such access to real time intelligence on all influencers of the business – from consumption trends, social-cultural impacts, raw material innovations, design insights to retailing transits and technological enablers.

Now all this should make for a pretty dynamic, exciting, innovation-led state of aff airs, right? Not quite. For Indian fashion retailers, something is not quite falling into place.

Truth be told, the customer is outpacing us. The facts be, we don’t completely understand how digital and physical retail really or optimally work together. And, without any bias whatsoever, I say that the successful international fashion retailers are well ahead of us in all of this. Not because they’re smarter, but because they’ve simply had more time to get it right.

The insights on the technological imperatives and multichannel execution, the stories on being technology empowered ‘fashion influencers’ instead of being ‘customer influenced’, on how superior experiential in-store environments are steering demand – this is intelligence you all need and the knowledge we at IMAGES spend weeks and months to gather.

The India Business of Fashion Report 2017 is the latest annual manifestation of our objective to facilitate best practices in Indian fashion retailing. I am sure you will find this, the 14th edition, particularly relevant and timely, given the churn in the retail universe, and the challenges and opportunities constantly connected consumers are throwing at the industry. I am sure you will find enough value in this volume to consider the new ways of conducting business that the book highlights and which are inescapable in this fast mutating consumer landscape.

Amitabh TanejaCMD and Editor in Chief, Images Group

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CONTENTSSECTION 1:

THE NEW FASHION CONSUMER ..........................34

1.1 WGSN’s Future Consumer Outlook ............................................................... 36 – WGSN

1.2 Beyond the Haze: A Confident Indian Consumer Ready to Spend ................ 40 – Team IMAGES Business of Fashion (Based on Nielsen Report)

1.3 Consumer Centricity: The New Look of the Season ...................................... 46 – Hemant Mehta, Managing Director–Media, Digital & Chief Strategy Off icer, Kantar IMRB

1.4 Consumer Shift s and Evolving Buyer Behaviour in Fashion ......................... 58 – Vineet Satija, Associate Director, and Subhodeep Nag, Knowledge Manager, Retail and

Consumer, PwC

SECTION 2:

THE EVOLVING INDIAN FASHION MARKET ..........76

2.1 The Indian Fashion Market – 2016 & Beyond ................................................ 78 – Amit Gugnani, Senior Vice President, Fashion - Textile & Apparel, Technopak

with research inputs from Goutham Jain and Saima Nigar, Team Technopak

2.2 Growth of Fashion E-Commerce ................................................................... 92 – Amit Gugnani, Senior Vice President, Fashion - Textile & Apparel, Technopak

with support from Goutham Jain and Saima Nigar, Team Technopak

2.3 Omni Channel Retail: The New Buzzword in the Market .............................. 98 – Amit Gugnani, Senior Vice President, Fashion - Textile & Apparel, Technopak

with support from Goutham Jain and Saima Nigar, Team Technopak

Case Study: Van Heusen ............................................................................. 103 – Team IMAGES Business of Fashion

2.4 5 Trends That Will Define the Future of the Indian Apparel Industry .......... 104 – Renu Aggarwal, Principal Consultant and Willson Anand, Associate Consultant,

Wazir Advisors

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CONTENTSSECTION 3:

THE TECHNOLOGICAL IMPERATIVES ................124

3.1 Digital Transformation in Retail is Imperative ............................................ 126 – Mike Ghasemi, Research Director, Retail Insights – Asia Pacific &

WW Hospitality, IDC Singapore

3.2 The Top New Technologies and Innovative Applications that Fashion Businesses Just Can’t Ignore! ..................................................................... 130

– Sweta Chandna, Developer Architect-Retail, SAP Labs India

3.3 Staying Ahead of Trends with Data Analytics ............................................. 138 – Raman Bhushan, Partner, Data & Analytics, PwC India

3.4 fAI – Fashion Powered by AI would be the New Fashion ............................. 142 – Santhosh Rao, Associate Director - Distribution Sector Leader, IBM Cognitive Solutions

3.5 Retail and Technology – A Bond Growing Stronger .................................... 146 – Lisa Mukhedkar, Founder and Director, Restore

SECTION 4:

THE CURRENT DYNAMICS .................................150

4.1 GST and Fashion Businesses in India .......................................................... 152 – Suresh Nair, Partner, Ernst & Young

4.2 Funding Bling! Venture Capital and Private Equity Investments in Indian Fashion ........................................................................................ 158

– Thillai Rajan A., Professor, Department of Management Studies, IIT Madras and

C. Rathika, Fashion Designer

4.3 Funding and Investments in Indian Fashion - Dynamics and Prospects ..... 168 – Namita Bhagat

4.4 The Changing Dynamics of Fashion Retail Spaces ...................................... 178 – Ankita Sood, Consultant – Research, Knight Frank India

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CONTENTS4.5 Luxury Fashion – An Indian Perspective ..................................................... 184 – Tarun Joshi, Founder, VanityCask

4.6 International Fashion Brands in India – The 2017 Perspective ................... 190 – Devangshu Dutta, Chief Executive, Third Eyesight

4.7 Launch Pad Report 2016-17: Global Fashion Brands Entering India ........... 196 – Team IMAGES BoF

4.8 The Rise of Fashion Private Labels in India ................................................. 210 – Amit Gugnani, Senior Vice President, Fashion - Textile & Apparel, Technopak

with Goutham Jain and Saima Nigar, Team Technopak

Case Study: Myntra ..................................................................................... 215 – By Team IMAGES Business of Fashion

SECTION 5:

THE FASHION PRODUCT ...................................216

5.1 Global Fashion Trends - 2018 ...................................................................... 218 – Trend Council

5.2 Fashion Education – The Right Way Forward ............................................. 230 – Antonio Maurizio Grioli, School Head, Pearl Academy

5.3 The Indian Textile Industry – A Review ....................................................... 236 – Sumit Parmar, Research Associate, Wazir Advisors

5.4 Future of Fabric and Fashion Ingredient Sourcing ..................................... 248 – Benita Singh, Founder & CEO, Le Souk

5.5 Why the World Needs Wool ........................................................................ 252 – Lisa Griplas, Editor, The Woolmark Company

5.6 Investment Opportunities in Man Made Fiber based Textile Manufacturing in India ............................................................................... 258

– Anubha Sehgal, Consultant, Wazir Advisors

Contributors ............................................................................................... 264

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India’s consumer confidence was highest compared to other global markets, despite the cash crisis period of demonetisation.

Findings from the latest Nielsen’s Consumer Confidence Index indicate a coming period of boom in consumer spend.

Beyond the Haze: Nielsen’s Consumer Confi dence Index for 2016 documents an increasing level of optimism amongst the Indian consumer. This indeed comes as a good news to the Indian retail sector as

the consumer refl ects through increased spending, which in turn stimulates the national economy. This holds true more for an economy like India, where the personal consumption accounts for more than 60 percent of the GDP.

The Consumer Confi dence Index score for India in Q4 2016 has climbed three more points to reach 136 in the previous quarter. India, in fact, has the world’s most confi dent consumers and leads this global consumer confi dence index.

During the survey period, the Indian government announced demonetization of high-denomination notes. While this move created short-term constraints for consumers, the long-term outlook is bullish–a sentiment clearly echoed in other Nielsen research and by a recently released study by the Reserve Bank of India–thus strengthening the overall confi dence levels for the next 12 months.

A Confident Indian Consumer Ready To Spend

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46 IMAGES YEARBOOK 2017 Volume XIV No. 1

Consumer Centricity:The new look of the seasonHemant Mehta, Managing Director–Media, Digital & Chief Strategy Officer, Kantar IMRB, takes an overview of the huge metamorphosis of the Indian fashion consumers; and how attitudes, mind-sets, and lifestyle choices around styling and grooming have undergone a sea change.

1.3

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78 IMAGES YEARBOOK 2017 Volume XIV No. 1

The Indian Fashion Market –2016 & BeyondAmit Gugnani, Senior Vice President, Fashion - Textile & Apparel, sizes the Indian fashion retail market, its key categories and analyses the current and future growth prospects and trends, with research inputs from Goutham Jain, Principal Consultant, Fashion - Textile & Apparel, and Saima Nigar, Associate Consultant, Fashion - Textile & Apparel, Technopak.

1. MARKET OVERVIEW

Indian economy, one of the fastest growing economies of the world, is witnessing major shifts in consumer preferences. Increasing disposable income, brand awareness and increasing tech-savvy millennial population are the driving factors of corporatized retail within the country. Overall, Indian retail scenario has shown sustainable long term growth compared to other developing economies.

The Indian retail market was worth `41,66,500 crores (USD 641 billion) in 2016 and is expected to reach `1,02,50,500 crores (USD 1,576 billion) by 2026, growing at a Compound Annual Growth Rate (CAGR) of 10 percent. It is envisaged that the current fashion retail market worth `2,97,091 crores (USD 46 billion) will grow at a promising CAGR of 9.7 percent to reach `7,48,398 crores (USD 115 billion) by 2026.

2.1

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92 IMAGES YEARBOOK 2017 Volume XIV No. 1

2.2 GROWTH OF FASHION E-COMMERCE

E-CommerceA majority of brick and mortar brands of the country are concentrated in metros and tier-I cities. Realising the potential of the untapped market in smaller cities, online retailers have started catering to these markets.Amit Gugnani, Senior Vice President, Fashion - Textile & Apparel, shares insights on how e-tailers carry out their businesses through online retail platforms in comparison to brick and mortar format, with support from Goutham Jain, Principal Consultant, Fashion - Textile & Apparel, and Saima Nigar, Associate Consultant, Fashion - Textile & Apparel, Technopak.

India is one of the fastest growing economies of the world and the Indian apparel industry is rapidly growing. It is estimated that Indian retail will grow at a CAGR of ~10 percent to reach `1,02,50,500 crores by 2026 from current size of `41,66,500 crores. The apparel segment

continues to be one of the leading categories in retail and contributes almost 8 percent to the total retail market.

The Indian retail market is primarily dominated by food and grocery (~67 percent) followed by apparel and accessories (~8 percent), jewellery and watches (~8 percent) and others.

One of the key trends witnessed in the recent years is the growth of online retail or e-tail across the country. Currently, online retail accounts for 2 percent of the total retail market of the country. The growth rates of e-tail are expected to be higher than traditional brick-and-mortar retail.

Growth of Fashion

2.2

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104 IMAGES YEARBOOK 2017 Volume XIV No. 1

The changes in Indian economy are explicit and so is the impact of these changes on the apparel industry. Renu Aggarwal, Principal Consultant and Willson Anand, Associate Consultant, Wazir Advisors, identify five key consumption trends in India that will shape the future of the apparel industry and present significant opportunities for new as well as existing businesses.

That Will Define the Future of the Indian Apparel Industry

TRENDS

2.4

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Tarun Joshi, Founder VanityCask, who has vast experience in the luxury sector, explores the journey of international luxury fashion in India. Elaborating upon the trends, market growth, increase in number of the wealthy, and growing spending on the luxury goods, he takes a comprehensive overview of what ails luxury fashion in India and how to tackle it.

An Indian perspective

Luxury Fashion

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Global Fashion Brands

entering India

India is becoming a hot bed for international fashion brands.

As the years pass, a noteworthy increase has been witnessed in

the number of brands that have ventured into the Indian fashion

market every year indicating a healthy and steady growth of the

market in India.

Team IMAGES BoF scans the newspages and rounds up some of the

best global fashion brands that entered India in 2016-17.

Launch Pad Report 2016-17

4.7

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218 IMAGES YEARBOOK 2017 Volume XIV No. 1

Trend Council is an affordable subscription based online trend tool for busy designers and fashion professionals delivering expert analysis and design inspiration. Trend Council offers seasonal forecast-

ing, runway analysis, color forecasting and original print downloads. Their team provides a great wealth of consulting services for design needs. Trend Council focuses on the ladies, juniors, men, younger men and active markets. Their analysis is synthesized into key reports identifying items by product category that guide the design process and buying strategies for seasons ahead.

Trend Council presents its forecasts on the emerging fashion trends that will impact global fashion in the immediate future. Sieved from and defined via their expert analysis of emerging global lifestyle and socio-cultural trends, some are already being seen on the avant garde runways, this top 10 pick will begin redefining the shelves very soon.

Global Fashion Trends - 2018

Trend Council’s Long Term Forecasting, which is named TRENDVOYANT, offers a clear and concise analysis of emerging trends that will shape the long-term design projects of their clients. It synthesizes

global, lifestyle, social and cultural trends to guide in understanding what will shape fashion businesses 12 to 18 months in advance.

The following pages present the forecasted key trends. Casual, light, fresh looks…super, fl ared silhouettes and knits injected with lurex and sequin...hip-hop accessories… patterns, colours and sensibility of the 90s... art pieces with brushed textures and fringe… space dye and fl ame rich knits… fedora hats, fl ared pants, stacked heels and long overcoats with huge lapels… heavily textured materials with patchwork and applique… Things that are just not to be missed this season.

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The textile and apparel industry of India is the second largest manufacturer and exporter of textile commodities in the world. Sumit Parmar, Research Associate, Wazir Advisors, assesses the current market status of the industry, factors leading to its growth, the key trends that would shape the future, its presence across the value chain and overall sector performance.

The Indian Textile Industry –A Review

The textile industry of India is the second largest manufacturer and exporter in the world. This industry holds prime importance in India by generating large employment opportunities and making a good deal of contribution to the country’s exports and

GDP. Indian textile industry is the second largest employer in the country employing 105 million people (directly & indirectly). It is also the second largest exported category from India with an approximate share of 14 percent in the overall exports of the country and is a signifi cant contributor to the GDP with ~4 percent share.

Indian textile industry is also a focussed sector for the government owing to its high employment and foreign exchange generation potential. Hence, the government has also put in several measures to boost this sector through skill development initiatives, by offering investment and export promotion subsidies and various other incentives.

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