For over a decade now, we have been hearing that innerwear is coming out of the closet…, but finally it is truly out in the open and prominently visible in stores and online shopping sites with more and more people comfortable in buying not only basic innerwear but high-end fashion inners. This fast-moving category is being driven globally by increasing awareness regarding personal hygiene, rising disposable income, on-the-go lifestyle, improved living standards and changing preferences of consumers. It is further fuelled by the spread of modern retail formats both off and online and increasing product visibility.
Under the larger umbrella of innerwear, the market is segmented between the men’s market and the more fancy-driven women’s wear market. And both the markets are significantly growing. While the global men’s innerwear segment is estimated to be growing at a CAGR of 5.8% to reach US $ 13.6 billion by the end of 2024, the global market for womenswear is projected to be growing at a CAGR of 6.4% to reach US $ 55.83 billion by the end of 2024. Organized retail penetration and growth of monobrand and multibrand outlets worldwide are driving sales further.
Yet, sadly, Indian manufacturers of innerwear, both in menswear and womenswear segment are concentrating more on the domestic market, choosing to ignore the huge potential that exists abroad. Even those who are working in the export market are mostly focusing on men’s segment, where margins are relatively less. India has but a few top-end lingerie manufacturers attempting global market. But then can we really blame them considering that the Indian market is ripe for the best brands with a market size that is growing at an estimated CAGR of 12.2%.
Currently, the domestic underwear market is estimated at nearly Rs. 24,000 crore (US $ 4000 million) according to a 2016 report by Intimate Apparel Association of India and Wazir Advisors. It is expected to become a Rs. 47,000 crore (US $ 7833 million) market, which is nearly 8% of the total estimated apparel market, by 2020. The men’s underwear market is currently valued at around Rs. 8,500 crore (US $ 1417 million). With increasing disposable income and changing consumer attitudes towards the category, the segment is expected to maintain growth to reach Rs.16,500 crore (US $ 2750 million) by 2020, added the report.
No wonder, domestic players are expanding. We have several prominent names who have carved a distinct niche for themselves in the Indian innerwear domain such as Rupa and Co. Ltd. (MacroMan, Frontline and Euro), Lux Industries Ltd. (Lux Cozi), Dollar Industries Ltd. (Bigboss, Club) and Maxwell Industries (VIP, Frenchie). Recently, Advent International, a leading US-based private equity investor, has acquired Dixcy Textiles, Tirupur, a prominent player in domestic undergarment industry. Dixcy with a strength of nearly 3,500 people, plans to raise money from private equity funds at a valuation of Rs. 3,000-3,400 crore (US $ 500 to 567 million). Talking to any company of this segment, one can find out that despite all variety of challenges, they are confident about the growth of the entire innerwear industry be it men’s undergarments, lingerie, shapewear etc. Sanjay K Jain, MD, TT Ltd, Delhi; Chairman of NITRA and Vice Chairman CITI, feels that undergarments export is increasing but at a very small pace. He even states that “Our exports have grown multifold because we were working on a very small base earlier.” He further added that innerwear market will grow consistently, and the biggest opportunity is going to come from the unorganized market shifting to the branded players like him. “Hence, I see growth coming from market expansion and market shift. TT limited, one of the most famous brand in India, is offering the complete range of innerwear for gents, ladies and kids. It currently produces 3 million pieces per month. In the last fiscal, the company had a turnover of Rs. 678 crore (US $ 113 million)” shared a proud Sanjay.
“Our existing business of ceramic is passing through recession, so we are planning to enter into textile industry. Initially, we will be investing Rs. 3 crore into knitting and stitching machines, and will start with undergarment manufacturing. Due to less dyeing, value addition and PD issues, undergarment seems to be the best product category to start with. Hopefully production will start in one year. Export is also on our radar but at a later stage.” – IA Badi, Neon Industries, Rajkot
Yusuf Dohadwala, CEO, Intimate Apparel Association of India (IAAI), claims that overall Indian intimatewear industry is witnessing the fastest Y-o-Y growth which is estimated at 18-20 per cent and this growth is the highest in the world. IAAI is one of the prominent bodies of Indian intimate apparel industry. One of the strong reasons for this growing innerwear industry is its large basic necessity. This makes it almost recession proof with minimal effect from negative market trends. Although according to Sanjay, due to psychological impact and pipeline inventory, the Indian innerwear industry faces short-term recession impact as seen in demonetization and GST period.
In the words of Yusuf, “Things are fast changing in India with consumers getting more evolved. Fashionable intimatewear is rapidly growing and taking large space in the wardrobes especially for women’s category.”
Why not export…
Brandix, Quantum Clothing, Seeds Intimate Apparel, Pratibha Syntex, Eastman Exports Global Clothing, Best Corporation, SGM Garments, Clifton Export, KPR Mills… these are few of the selected companies in India that are into export of these product segments; while in domestic market, there is a long list of strong and public limited companies who are achieving tremendous growth in almost all product categories of innerwear segment. So what is stopping them from exploring the overseas market? “Overall competitiveness in India is an issue due to unfavourable FTAs and bilateral agreements vis-à-vis our competitors like Bangladesh, Vietnam, Cambodia etc. Hence, exports are mainly limited to Middle East and African nations – further domestic brands need to get more organized and integrated to cater to USA and Europe in a bigger way,” said Sanjay thoughtfully. He also feels that both domestic and exports have enough scope but export growth would somehow depend on Government policy and support.
Yusuf informed, “We already have over 1,000 labels in innerwear segment who cater to the Indian market. Exports from India for innerwear are apparently very less but growing. However, our industry has to work on poor skills in manufacturing of value-added products or fashionable products. Therefore, at present, we can export only basics. For value-added products, India is unable to meet the efficiencies found in China, Bangladesh, Sri Lanka, Vietnam, Cambodia, Indonesia. To be competitive in exports, it is very important to have raw material base in India, especially for lingerie segment which is very low. Hence, to do export, we would have to depend on China for raw materials, hence increasing the lead time and which is why buyers don’t aim at coming to India.”
Cotton will continue to take lead
Cotton is and will continue to dominate as consumers are pretty comfortable and used to cotton. Having said that, polyamide and other synthetic fabrics have also started taking space in India’s intimatewear industry, but the growth is slow as many manufacturers are unable to handle synthetic fabrics well, and hence it still has limited use. But going forward, synthetic fabrics will grow as consumers start experiencing the comfort that these fabrics have to offer. In innerwear, cotton is set to rule in India, as it is cheaper than its alternate modal fibre. In innerwear blends, cotton/spandex or modal/cotton will be more in demand.
According to Yusuf, few lingerie companies who are really doing well do not have capacities for exports. Their market in India itself is large and growing which doesn’t allow them to look at exports. Being a highly-skilled driven industry, somehow it hasn’t been able to implement skill development programmes effectively to support intimatewear manufacturing. He adds, “Unfortunately very few, including our Government, fail to understand how potential employment-generator this industry can be. Smaller countries like Vietnam, Bangladesh, Cambodia have understood this and excelled.”
Experts do feel that India’s innerwear industry is at a nascent stage and has lot of potholes like lack of skills for producing technical and quality products, poor availability of technicians and lingerie designers, dearth of quality raw materials for which India has to depend on China. This makes the import duties on raw materials high and the products expensive. To overcome such challenges, Yusuf briefed that IAAI organizes events like Galleria Intima which address the raw material challenges in India and gradually increase exports from India. IAAI is also creating awareness through seminars to help the Indian manufacturers and brands to upgrade their knowledge and be competitive.
With regard to lingerie manufacturing, it was being said that there are suppliers who can’t offer all accessories together (in proper shade) for bra and more or less things have not improved much even currently. Small components like rings, sliders, hooks and eye tapes are not available in India which can pass the quality standards for top brands. Additionally, India lacks enough technical training institutes, arrangements for lingerie/undergarment industry, especially at the shopfloor level. This is an important area to be addressed. IAAI had many rounds of discussions with institutions such as NIFT to overcome such challenges but nobody seems to take this up.
Major players in men’s global innerwear market…
Key market players in the men’s segment are Hanesbrands Inc., Philips-Van Heusen Corporation, Ralph Lauren Corporation, Jockey International Inc., American Eagle Outfitter Inc., Iconix Brand Group Inc., JC Penney Corporation Inc., and Berkshire Hathaway Inc. The key players operating in the global lingerie market are Jockey International Inc., Wisconsin, Hanes, Groupe Chantelle, LVMH, L Brands Inc., MAS Holdings Limited, Ann Summers, Marks and Spencer, PVH Corporation among others.
Despite all such major limitations, Yusuf is confident that leading brands of the world will have to come to India for their sourcing requirements. “It is just a matter of time and if the current Government continues its reform mission, we aren’t too far from ‘the Make in India’ vision. Brands like Victoria Secret and M&S, Calvin Klein and many more are already sourcing from India. One should visit Brandix India Apparel City (BIAC) in Visakhapatnam to see the millions of bras and panties being produced every month for leading brands. BIAC also claims about having a world-class Integrated Textile Park with facilities which are not available anywhere else in the world,” says Yusuf on an optimistic note.
Exporter’s take…
BSCI certified Clifton Export, Tirupur, is producing 50 million undergarments per year and exporting to retailers in Europe. B. Naveen, Managing Director of the company informed, “The only benefit of undergarment manufacturing is that you have business throughout the year but this product segment has very less margins compared to any other garment product and more price-competitive. Besides, one needs specialization machines and in-house elastic manufacturing without which producing undergarments would become very difficult. We do have our own set-up for elastic manufacturing.” He further added that in the last 4 years, Bangladesh has increased its focus on the undergarment business which is again a big challenge for players like him. “We have noticed only 5 to 10 per cent growth in undergarment exports owing to this,” said Naveen although his company has its own fabric dyeing plant.
Some of the low-profile companies are also doing good business in this segment and enjoying decent growth. Anuj Shah who was earlier associated with Pigeon Impex, Surat, offering seamless garments (including undergarments) six months ago, has now started Flavors Impex and is exporting seamless undergarments to Turkey and Europe. “Yes, we have major share in domestic market but we keep focus on export and are continuously improving on the same,” averred Anuj. There are some more such companies in Ahmedabad offering lingerie and nightwear also.
Ahmedabad-based Santosh Shree Santoshi Agencies offers variety of products in innerwear segment and also exports to Middle East and African countries. Sunil Nasra, Director of the company shared with AOI, “It is true that lingerie manufacturing is growing in Ahmedabad but there are very few companies doing quality products, while rest are doing low-cost products.”
Raw materials
As far as the issue of raw material availability is concerned, there are some companies who claim one-point solution for the entire range of accessories needed for a specfic product such as bra. Kotak Overseas, Mumbai is one of them. Nikhil Kotak, CEO of the company reasons, “Very minor difference like shade variation will be there always, no matter from wherever lingerie manufacturers are sourcing. But we have an edge as we are serving lingerie manufacturers with the complete range right from cup to all other components and that too with the best quality. Sometimes manufacturers are having very less lead time, even in that case, we try to support them with the best possibilities.” He even stated that there are some manufacturers who themselves don’t want to source the entire range from one supplier. They try to save cost but at the end, it costs them almost the same.
Challenges in domestic market too
Overall, in domestic innerwear market, extreme competition and low margins by competitors especially from the unorganized segment is a challenge. GST and restructuring of industry will help to reduce the latter hurdles but the first ones need to be fought by disruptive and out-of-box solutions. With regard to lingerie, earlier it was being emphasized that the demand for bra in domestic market is so high that Indian brands/manufacturers are using their full capacities, and expanding and they feel no need to move into the international arena. But now, many not-so-known brands have started seeing the difficulties. Experts feel that market is becoming more systematic with organized retail and e-commerce taking most of the market share from the traditional MBOs and most of these brands were dependent on MBOs till now for their sales. “Market consolidation has already begun. Many manufacturers will convert to job working units or explore export opportunities as survival in the domestic market will get tougher for them unless they consider investing in brand building,” claims Yusuf with a careful consideration of the Indian innerwear market at large.
Hubs
No doubt, Kolkata and Tirupur are prominent hubs in India for men’s innerwear but in case of hosiery products and garments and in lingerie, the larger production bases are in Delhi, Mumbai, Bangalore and Ahmedabad. Hubs like Kanpur are also doing well as the city is already having strong hold on knitted products. Apart from many small-and medium-level players, Kanpur has growing companies like Jet Knitwears Ltd., which brought its IPO just a year ago. It claims to have its products certified as skin-friendly and antibacterial by facility for Ecological and Analytical Testing, IIT, Kanpur. In lingerie business, Vizag, Delhi-NCR, Mumbai, Ahmedabad and selected companies in Bangalore are known for lingerie manufacturing. There are units coming up in other regions but at a small-or medium-level scale.
