Challenges Of The Indian Textile Industry Marketing Essay

Ch completelyenges Of The Indian stuff Industry Marketing EssayScale Indian stuff Industry is postgraduately fragmented Industry that is superstar by several(prenominal) dainty- casing industries. Because of this, there is insufficiency of Industry Leadership. These sm all told companies do not induct fiscal resources to invest in technological up- full stop and they argon not able to generate economies of surpass. This leads to inability to establish a world-class belligerent player. all told the welkins except spinning face the problem of scale. India has truly hardly a(prenominal) large firms and another(prenominal) firms argon generally s stroller than their Chinese or Thai counterparts. Some of the Chinese large firms exhaust 1.5 whiles high spinning capacitor, 1.25 times denim (and 2 times gray stuff) capacity and about 6 times much revenue in enclothe than their counterparts in India1which in turn gave an effect on the overall fol piteous distri b arlyi on along with the ability to attract customers with big orders.No of merchandiseers credit CRISILSkill and Labor produceivity Though Industry has cheap and expert manpower further they atomic derive 18 less(prenominal) productive comparative to other south Asian countries. Low Labor productivity due to privation of skills and panachernized infrastructure is making Indian fabric industriousness less productive than other competitor nations.An Industry and Regional Perspective stock Economics Program Working Paper Series The Cost conflict of the Manufacturing orbit in China and India (Bart van Ark, Abdul Azeez Erumban, Vivian Chen, Utsav Kumar)Along with the labor productivity issues three other issues are of all burning(prenominal)(predicate) consideration (a) there is a lack of practiced manpower -there are only 30 programmes at graduate masterminding (including diploma) trains graduating nearly 1000 students this number is insufficient for speech about signifi su pportt technological change in the stuff sphere of influence (b) Investment by Indian firms for training of its existing workforce is truly limited and the skills are confined to already existing processes (c) there is just dearth of trained operators and supervisors in India. It is evaluate that Indian firms get out kick in to invest destination to Rs. 1400 bn by year 2010 to levying its orbicular guile to $ 50 bn. This kind of investment would require about 70,000 supervisors and 1.05mn operators in the cloth sector and at least 112,000 supervisors and 2.8mn operators in the apparel sector (assuming a 8020 ratio of investment between frameworks and apparel).2In this mooring the real bottleneck to festering is going to be availability of skilled manpower.Poor Infrastructure Technological Obsolescence and low degree of modernization in various steps of value range affects the whole step, basis and distribution. The general slip in the country is to go for second hand and outdated looms gum olibanum resulting in lower productivity and quality. Raw material from power looms and handloom is of low quality. Though India is a hub of IT run, they are not effectively implemented in material sector to improve the productivity1.pngInadequate Research cultivation and escape of engine room Upgradation brass of India has d cardinal significant investment in various schemes and other programmes for the growth and development of the application. It launched Technology up gradation fund scheme in 1999 and issues Rs 916 bn for applied science upgradation. However TUFS have not benefited all the fractions of the framework Value Chain -large parts of the funds have gone to the relatively healthier spinning sector.2.pngLow FDI Lack of scale and the fragmented nature of industry have discouraged mega investments in the Indian framework industry. Unattractiveness of the industry has resulted in abysmal FDI inflows, despite 100% FDI macrocosm allowe d on a lower floor the automatic route. These drawbacks cleard a hurdle to make industry more competitive on the global basis.Legacy of government policy political sympathies go overed protectionist policy for handlooms (labour-intensive and seen as a means to sustain employment) vis--vis power looms mills. India had primitive labour laws. The companies have often broken their business down into small units to avoid any trouble created by labor unionization. India in any case maintained capacity moderationrictions for a long time because government wanted to incentivize pocket-size industries. The Land and urbanization laws resulted in closure of urban mills and lack of import subsidies on advanced machinery resulted on limited technology advancement.Lack of stack membership India is serious lacking in parcel out covenant memberships, which leads to restricted access to the other major markets. This issue made others to compel quota and duty, which put scissors on the sourcing quantities from India.High Power Tariff by and by raw material, power cost is the close significant cost in the whole emerge chain. High power cost and erratic supply hampers the production in India.High circle time for fits Cycle time is the secern compute in determining the fight of a firm. It has a direct impact on both price and delivery schedule. Cycle time reduction is strongly correlated with high first ecstasy yield, high throughput times, low variability in process times, low WIP and hence cost. Currently Indian firms have high lead times and they must(prenominal) reduce their cycle times across the entire supply chain. The norm lead time in manufacturing and delivery sums to or so 45-60 days from fabric buying to shipment of apparels. It can also get extended to 80 days. The mean delay in exporting finished garments from India after procural of raw materials is estimated to be 15.5 days. The shelf life of products driven by port is merely 45 days th ere bowknot, such delays are indefensible. In lineage Tur tonality completes entire task ranging from approval of design to delivery in warehouse in a flat 30 days cycle3. Tur profound also has the strategical advantage of being located close to EU markets and positive liberal political conditions. Customs must stick out a turnaround time of day for an order if we expect Indian firms to become part of larger global supply chains. Indian fabric firms must enforce a deployment of industrial engineering with specific immenseness on cellular manufacturing, JIT and statistical process control to minimize lead times on shop floors. Usage of IT for increasing the productivity is also low in this sector.Indo cut CollaborationMachinery The french fabric machinery Manufacturers has completed a firm foothold on the international markets for many years. France is the European Unions third largest exporter of textile machinery and the sixth largest in the world. to a greater extent than one carbon countries have chosen them as their partners to whom they export 90% of their national production. They are a dynamic group of companies who created years ago a clandestine professional Association UCMTF ( french Association of stuff Machinery Manufacturers), whose aim is the promotion of the French machines and French companies.The vary sectors of the French textile machinery industry are rotate preparation machineryLong fibre spinning machineryFibre opening, fibre portmanteau machinery, textile countervail recoveryCardsNonwovens manufacturing lineSuch expertise if augmented with Indian government support can help the issues associated with vile infrastructure and machinery resulting in poor quality of fabric and thus increase the competitiveness of Indian textile in global market.The French textile machinery manufacturers also realized the importance of the Indian textile industry. They invited the Indian textile producers to a series the Indo-French semina r French Technology to Boost the Indian cloth Industrys warringness which were held in Mumbai and Ludhiana on 20th and 23rd April 2010 respectively. The aim of this seminar was to regularly facilitate direct contacts between the Indian textile producers and the top instruction of the French machinery producers.In words of Mrs Evelyne Cholet, the Secretary General of UCMTF- Organization of such seminars in India is very important at present especially when the Indian presidential term realizes the importance of innovative investments in textile machinery to stimulate this strategic sector. The adept textiles sector for which France has an expertise is another sector which has great possible in IndiaThis endeavor is supported by Indian government as these seminars were held under the patronage of the office of the Textile Commissioner Ministry of Textiles and Government of India. The French consider Commission of the Embassy of France in India, Ubifrance (Frances agency for the international development of French companies) and the French Textile Machinery Manufacturers Association (UCMTF) were co-organizers of the seminars.Technical Textile India is at the threshold of adept textile development, which is set to play a huge role in the development of the countrys various facilities, thus offering the greatest growth authorisation in this sector. Owing to the rise in demand for value added textile products in the developed nations, the expert textile industry is said to grow around 4 5 percent. According to the recent research by the Textiles Committee, the adept textile industry in India is expected to grow at a rate of 11% anually and r to individually one a size of around $14 one thousand one million million by 2012. The legitimate size of the market is forgetful less than $8 billion and the projected investment in this sector is around $1000 million. Technical textiles cor oppose to a multi-disciplinary field with unlike applications in numerous fields such as medicine, aerospace sports, defence, culture and construction.France has already developed expertise in this segment. In France, the technical textile industry comprises nearly 600 companies, consisting of very small businesses, numerous SMEs and big groups alike. Some twenty trades are represented, from fibre production and spinning through to clothes-making and assembly, and cover 12 sectors of application. This type of material is regularly used in unspecificly change fields such as packaging, protection and safety, habiliment, construction, express, the environment and the medical sector. All these mutually complementary companies work within a network of technical centres, laboratories, universities, competitiveness clusters and professional associations. Their excellence is recognized far beyond the borders of France.Indian manufactures can learn a lot from French technologies and products in technical textile segment. In order to facilitate this learning Techtextil India International Trade Fair for Technical Textiles and Nonwovens is organized where pavilions from Germany, Frnace and Italy present their latest innovations. The accusive of the fresh is to achieve a future oriented perspective and practical technical information in a range of presentations and discussions specially formulated for the high potency Indian market. Techtextil India is supported by the Office of the Textile Commissioner of the Ministry of Textiles, Government of India.In words of Mr. Dayanidhi Maran, Union Textiles Minister, present at Techtextil 2009- The technical textile industry has a high potential to attract investments worth $1.03 billion and generate around 3,00,000 additional employment by 2012. Since India has super-skilled manpower and rank availability of raw material, it can emerge as a key player in the technical textiles industry renewal through Competitive impel In order to improve the highly fragmented textile industry of India the French model of competitive poles can be applied. Since French textile industry is a mature sector, innovation is the key factor driving the industry. The French textile industry has been re-organised in the past a couple of(prenominal) years in order to respond to the current innovation and technology creation needs. In 2004, the Ples de Comptitivit (Competitive Poles) were put in place to respond to this need. These poles are associations that group enterprises, research centres, and public and private training institutions. The objective lens of these poles is to create the environment to the economical renewing of the regions by implementing new products and services. Innovation is, therefore, in the centre of the competitive poles. There are in France at one time 71 poles spread across the country.The programmes of the poles are financed by the government, by 1.5bn EUR each year in total (including all industries and activities), but local government and associat ions also contribute to the financing.The competitive pole is organized under 2 main axisTechnical textilesCustomization of vestments textilesThe Lile region is a key example of the competitive pole approach. Nowadays, more than 50 % of the textile engineer in France are graduated in the metropolitan field of operations of Lille Mtropole at lENSAIT and HEI. Technical trainings are also available at the ESAAT.The UP-tex is the pole dedicated to the textile, technical and traditional (clothing), that is located in the metropolitan area of Lile. The UP-tex works as an association of enterprises, research centres, and centres dedicated to technology transference. Its want is to become the European reference in terms of advanced textile materials, polysensoriality and design and mass customisation. Furthermore, the labelling of the competitive pole UP-tex has also contributed to the reinforcement of Liles bunk as a reference in terms of innovative and clothing textiles.The UP-tex has as objectivesDevelop the project of the customized enterprise, in order to create a new value chain to the textile/ clothing complexifyPromote the national and international plan of the high-performance textile regional pole, its economic network (through the CLUBTEX) and its scientific competencesCreate basis for the emergence of an European technological platform through the creation of the CETI (French Centre Europen du Textile Innovant, English European centre of the Innovative textile)Support the research projects by the attribution of labels to selected projectsFurther develop innovation in the textile and clothing industryCLUBTEX, which is the association of local industrials to promote innovation in technical textiles, is key element to the success of the Lile textile pole. The association is grouping, nowadays, 58 industrial, 1 union and 6 training and researching centres, all with one common objective to create innovation through the mutualisation of resources. The indus tries participating in CLUBTEX produce under the SPL (SPL French for Systme resultif Local , in English Local Production System) order Textiles Techniques label, which helps on the identification and antitheticiation of the products towards the customers.RecommendationsGovernment InitiativesGovernment can establish actions under the following heads for improving the textile industryFlexibility of exact labor law Labor Laws should be more liberalized and made loving that will help to make labor more productive. Textile industry should be exempted from contract labor lawBetter implementation of TUF Government should focus on providing uniform disbursement of incentives through TUFAttracting FDIs Government should bid tax incentives to attract FDI to make it more competitive in global marketplace. Establish integrated textile parks. Allow more Foreign identify Investment (FDI) in Garment Retailing to enable large, modern sell showrooms to set up shops in India which will promo te local sourcing and will result in better productionEncourage Private field for Partnership collaborationDevelop supporting Industry Develop textile machinery industry ( soon 70% of textile machinery is imported. Faster port clearance and cheaper transportSkill development Initiatives Set up skill development centers. More Training centers should be opened to train the workforce and awareness of new technology and trends should be increased among manpower. Collaboration with Institute like SITRA (South India Textile Research Association) for labor skill developmentReduce power tariff, assist renewable sources of energy through government subsidy, reduce interest rate and transaction costs.Setting up of quality checking laboratories to ensure global competitiveness raiment park to promote exports In National Textile insurance policy 2000 government complete vesture International Mart dress up Export Promotion Council has constructed an Apparel International Mart (AIM) at Gur gaon to provide showrooms on lease and license basis to the established exporters to showcase their productsAid to agriculture industry to improve the availability, productivity and quality of Raw Material In National Textile Policy 2000 government implemented Cotton Technology Mission To improve the performance of Cotton sector through proceeds in Research Development, quality and productivity of products. The Govt. of India is aimed to increase production of cotton plant wool by 50% with improved quality and productivityFirm level InitiativesCompanies should improve the productivity at firm level to develop economies of scaleUp-grading technology Form JVs with global players for technology up-gradation and scaleImplementing TQM ensure waste minimization, product durability and reliability.Lean manufacturing optimized distribution network and supply chain management to attain reduced cycle timeUse of IT servicesIn-house skill development programApparel Industry Landscapeworld(a) Textile and Apparel trade is recovering after a bury during the economic recession in 2008-09, and is expected to reach US$ 1 Trillion by 2020 from the current US$ 510 Bn. The growth in trade is driven by increased outsourcing of western / developed countries towards lower cost countries in Asia. Indias Textile Apparel industry ( internal + exports) is expected to grow from the current US$ 70 bn to US$ 220 bn by 2020. The Indian domestic Textile and Apparel market size in 2009 was US$ 47 bn and is expected to grow 11% CAGR to reach US$ 140 Bn by 2020 home(prenominal) Apparel retail market was worth US$33 Bn in 2009 and is expected to reach US$ 100 Bn by 2020.Export Sector Indias exports have also recovered in 2009-10 following increased global demand and is currently worth US$ 23.5 Bn. Indian apparel exports have also grown by a CAGR of 11.7% in last 4 years. The export market includes readymade garments of cotton, man made, silk, wool and other textile materials with cotton pr oducts accounting for the major function. India has the potential to increase its export luck in world trade from the current 4.5% to 8% and reach US$ 80 Bn by 2020. India has the potential of this strong growth in exports because of increased sourcing dismissal from developed countries to Asia. Indias also possess different strengths which makes it a suitable alternating(a) to China for global buyers. In terms of financial returns, Apparel is the some attractive product sept amongst retail product categories both in terms of Returns on Capital Employed and EBITDA. Garmenting Technical Textiles are the most attractive segments within the Apparel value chain in terms of ROA and EBITDA. According to KPMG research investments upto US$ 68 Bn will be demand by 2020 across the Textile supply chain to tap the potential market generated by the growth of textile industry. Investment required in garment sector by 2020 is to the tune of US$ 14 Bn and for affect is US$ 19 Bn.Apparel In dustry However Indian Apparel Industry is a small scale sector with high degree of fragmentation. Apparel manufacturing has about 77,000 small scale units classified as domestic manufacturers, manufacturer exporters and fabricators. Due to low entry barrier, garments industry is the least great(p) intensive part of textiles value chain, leading to high fragmentation. There are around 8200 registered apparel exporters in India. The turnover of 4800 exporters is less than 5 million INR which indicates the high level of fragmentation.Apparel Retailing A huge glob of apparel market is contributed by urban segment. Majority of this urban segment stays in few selected cities where organized retail is preferred mode of shopping thus organized retail plays a very important role in domestic apparel consumption. Total apparel and appearance accessories retail market was worth Rs.80,000 crore in 2004, which grew by 11% each year till 2006. Although organized retails chains and exclusive in stigator outlets are gaining momentum, traditional retailers and MBOs still dominate apparel sell. One of the key factors for the huge growth is due to expansion by apparel brands and retailers to small but potential cities. Many global brands like Marks Spencer are acquiring established in India by franchisee route. Malls are expected to be one of the main drivers for growth of apparel retailing, as they provide large areas.Mens Apparel Man apparel stands at $ 8.1bn in 2007 with a market section of 42% of total apparel market. It is expected to see high growth in near future but % share will change magnitude due to growth in other segments.In 2007 men apparel industry was mainly dominated by shirts accounting for 36.5% of total men segement. The established key players are Arvind mills, Madura Garment, Westside, shoppers stop and Pantaoon. Levis Strauss is the major newcomer in the equal segment.Women Apparel women apparel stands at $ 6.7bn in 2007 with a market share of 34% o f total apparel market. It is expected to grow till 11bn by 2009. Some of the important changiing trends observed in this segment are loosening of casual usurp in the office is increasing the ready to wear marketWorking women demand western or indo-western outfits that last in fashion and qualitySaree have the higest share but pant and skirts are growing rapidly due to changing social trendsFrom 2002 to 2007 saree demand has shown a CAGR of 12.8% whereas Trouser and skirts have shown CAGR of 34%1.pngKid Apparel Kid apparel is the smallest segment of $ 4.7 bn. Licensing interntional kids apparel is a successful scheme to capture the premium market. Some popular brands in same category are Disney, Barbie etc. This segment have very little brand penetration of 5-8% but it is expected to grow at 15-20%A comparitive abstract of all segments with their expected growth is shown underKey growth drivers for the textile and apparel Industry are Growth in organized retailing at 41% CAGR.I ncreasing number of working women.Increasing theater incomeChanging demographicsAffinity for brands and better shopping experienceProfile of French brandsHigh end/ Luxury scratchsProducts coverageGender targetedTarget nodeMarketing strategyProduct dodgingHerms attire accessories anthropoid/ pistillateHigh-end/ rich state of all agesExclusivity is the key word.Products are very Expensive and often perceived as durable goods (can be passed from niggle to daughter)Overbuying is discoraged clients do not have the right to by more than a X number of items per collectionVery high-quality, often hand-made by specialized artisans eg. leather goods often produced by experts in Italy.Each maison has its Flagship products, that remain unchanged, or are slightly updated across collections.Pret-a-porter collections are innovative and trend-setter for the rest of the clothing industryLVMH Louis Vuitton costume accessories manful/ effeminateHigh-end/ rich creation of all agesChannel dres s accessories womanlyHigh-end/ rich population of all agesLVMH Dior wearable accessories anthropoid/ distaffHigh-end/ rich population of all agesChlo clothe accessories young-bearing(prenominal)High-end/ rich population of all agesYves Saint Laurent fit out accessoriesMale/FemaleHigh-end/ rich population of all agesLanvinClothing accessoriesMale/FemaleHigh-end/ rich population of all agesLVMH GivenchyClothing accessoriesFemaleHigh-end/ rich population of all agesMaison Martin MargielaClothing accessoriesMale/FemaleHigh-end/ rich population of all agesPremium/ mid(prenominal)dleProduct coverageGender TargetedTarget guestMarketing StrategyProducts StrategyIsabel MarantClothing accessoriesFemaleMid 30s/ primal 40sTargets are high-end of medium class, that cannot afford luxe but wants to buy the scoop product they can afford.Price sensibility is not to be neglected.Brand strengh based on notoriety, string communication campaigns and sales to clean stocks. late trend is the affiliated-brand strategy, such as Ath and Etoile, by respectivelly V.Bruno and I.Marant, that target at different age ranges as a way to maximise sales choke and visualise are the key words.Quality is important, but not overvalued as for luxe products.Some brands will have a few flagship products, but as general rule the collections are completely renovated each hardenVanessa BrunoClothing accessoriesFemaleMid 30s/ archaeozoic 40sCarvenClothing accessoriesMale / FemaleMid 30s/ aboriginal 40sDe FursacClothing accessoriesMale new-fashioned 30s/ later(a) 40sJacadiClothing accessoriesChildren0 to 8y +/-BonpointClothing accessoriesChildren0 to 8y +/-Gerard DarelClothing accessoriesFemaleMid 30s/ early(a) 40sAgnsClothing accessoriesFemaleMid 30s/ Early 40sClaudine PierrotClothing accessoriesFemaleMid 30s/ Early 40sManoushClothing accessoriesFemale easy 20s/ Early 30sMajeClothing accessoriesFemaleLate 20s/ Early 30sZadig VoltaireClothing accessoriesChildren/ Male / Fema leLate 20s/ Early 30sBa ShClothing accessoriesFemaleLate 20s/ Early 30sSandroClothing accessoriesFemaleLate 20s/ Early 30sLes PetitesClothing accessoriesChildren/ FemaleLate 20s/ Early 30sComptoir des CotoniersClothing accessoriesChildren/ FemaleLate 20s/ Early 30sAth Vanessa BrunoClothing accessoriesFemaleLate 20s/ Early 30sEtoile Isabel MarantClothing accessoriesFemaleLate 20s/ Early 30sKooplesClothing accessoriesMale / FemaleWhole 20sBereniceClothing accessoriesMale / FemaleLate 20s/ Early 30sBel AirClothing accessoriesFemaleWhole 20s halfway/Low rangeProduct CoverageGender TargetedTarget CustomerMarketing StrategyProducts StrategyZara (Spanish)Clothing accessoriesFemaleMid 30s/ Early 40sDisposable Fashion.Easy-to-wear collection hits, constantly renovated (short collections)Design Disposable fashion.Quality is not perceived as key product attribute.Products are often produced outside EuropeMango (Spanish)Clothing accessoriesFemaleMid 30s/ Early 40sH M (UK)Clothin g accessoriesFemaleMid 30s/ Early 40sNaf NafClothing accessoriesFemaleLate 20s/ Early 30sSud ExpressClothing accessoriesFemaleLate 20s/ Early 30sPROMODClothing accessoriesFemaleLate 20s/ Early 30sEtamClothing accessoriesFemaleVariousMiddle/Low rangeProduct CoverageGender TargetedTarget CustomerMarketing StrategyProducts StrategyUniqlo (Japan)Clothing accessoriesMale/ effeminateFamilies looking for basic items with average quality and good priceLong-lasting collections, not really fashion-driven (does not follow trends).Good value for moneyLe Petit BateauClothing accessoriesChildren/ FemaleFrench brand in IndiaBased on the consumption profile we can see that women segment is the fastest growing segment and also the share of formal wear like trousers and skirts is increasing due to increasing number of working women in the society. Thus a French brand targeting female consumers in the age range of Late 20s/Early 30s will be best suited for India. Though the disposable income i s increasing, the target group of women is highly value conscious hence Premium/Middle or Middle/Low class brand will perform better than the extravagance brands. Also the segment purchasing luxury brands is although growing but currently too small to target.Important Parameters to consider while entering India spatial relation The most important part is the positioning in the Indian consumer mind-space. reinvigorated casual positions are taken in by the brand such as ColorPlus, Dockers and Canary Blue. Design wear are gone with square-1 mall and Kimaya, Kazo and individual designer having their stand alone store. Any positioning below that is lapped up by Zillions of manufacturers. However there are still wide open gaps which lie agape between these broad categories which can be easily targeted. Also Indian consumers show an affinity for foreign brands as it is considered a proxy for status. Therefore even the Indian Manufactures like ITC, Madura garment give exotic names to thei r brands for eg John Players, Allen Solly.Location The location is the key to the positioning, it determines and in turns reinforces positioning in fact, with about 50% of the operational expenses are taken up by the rentals, it has assumed an even more important position. Exclusive showrooms at a high end street or space in well reputed mall are the two options for establishing a high end brand.Buying vs. Manufacturing It is very important decision for the fore