India's Growing Fashion Market

India Fashion Market
Private and Confidential
June 2020
Table of Contents
1 Macro-economic Overview of India...................................................................................................... 3
1.1 India’s GDP Growth ....................................................................................................................... 3
1.2 Domestic Consumption Share....................................................................................................... 3
1.3 Key Growth Drivers ....................................................................................................................... 4
Demographics ....................................................................................................................... 4
Growing Middle Class............................................................................................................ 5
High Share of Urban Retail .................................................................................................... 6
2 Indian Retail Market.............................................................................................................................. 8
3 Indian Fashion Market ........................................................................................................................ 11
3.1 Overall Apparel Market............................................................................................................... 11
3.2 Western Wear & Ethnic Wear Mix.............................................................................................. 12
Western Wear ..................................................................................................................... 12
Ethnic Wear ......................................................................................................................... 19
3.3 Consumer Segments ................................................................................................................... 24
Men’s Wear ......................................................................................................................... 25
Women’s Wear ................................................................................................................... 27
Kids Wear Breakup .............................................................................................................. 29
3.4 Format & Channel ....................................................................................................................... 30
Brick & Mortar Organised Formats ..................................................................................... 30
Online Formats.................................................................................................................... 32
Omnichannel Play ............................................................................................................... 35
3.5 COVID-19’s Impact ...................................................................................................................... 36
4 Competition Benchmarking ................................................................................................................ 39
4.1 General Information ................................................................................................................... 39
4.2 Store Related Information .......................................................................................................... 40
4.3 Revenue Benchmarking .............................................................................................................. 44
India Fashion Market 1

1
Macro-economic
Overview of India

1 Macro-economic Overview of India
1.1 India’s GDP Growth
India is world’s 7th largest economy and expected to be in top 3 global economies by 2050
India ranks 7th in the world in terms of nominal GDP and is the 3rd largest economy in the world in PPP
terms. In 2018, India was about 1/8th of the size of the US economy and 1/5th of the size of Chinese
economy. India’s GDP is estimated to be ~USD 3200 bn in FY 2020 and by FY 2050 India is expected to be
among the top three economies of the world. Sustained high real GDP growth of over 6 percent since FY
1991, has led to a fundamental transformation of the Indian economy. India’s GDP is estimated to be
~USD 3200 bn in FY 2020.
Exhibit 1.1: GDP Ranking of Key Global Economies (2018)

Country GDP (USD tn) Share of World GDP (%) GDP Growth Rate (%)
United States 20.54 24.4% 2.93%
China 13.60 16.2% 6.57%
Japan 4.97 5.9% 0.79%
Germany 3.94 4.7% 1.53%
United Kingdom 2.85 3.4% 1.39%
France 2.77 3.3% 1.72%
India 2.71 3.2% 6.81%
Italy 2.08 2.5% 0.77%
Brazil 1.88 2.2% 1.32%
Canada 1.71 2.0% 1.90%
Source: World Bank
1.2 Domestic Consumption Share
India has an advantage in that its domestic consumption share (measured as Private Final Consumption
Expenditure – PFCE) in its GDP was 59 percent in 2018. In comparison China’s domestic consumption share
to its GDP was 39 percent in the same year. High share of private consumption in the GDP not only
insulates India from the vagaries of global economy but it also implies that a sustainable high economic
growth in India directly translates into a sustained consumer demand for merchandise and services.
Similarly, as more people are expected to move beyond sustenance living with rising income levels
enabled favourably by demographic advantages, India’s household consumption expenditure will
continue to get altered in favour of discretionary purchases. Therefore, categories like apparel, jewellery,
processed foods and consumer electronics are poised to gain a share of this shift.
Exhibit 1.2: Total Private Final Consumption Expenditure (USD bn)

Country 2010 2011 2012 2013 2014 2015 2016 2017 2018
United States 10,186 10,641 11,007 11,317 11,823 12,284 12,748 13,312 13,999
China 2,157 2,732 3,145 3,547 3,948 4,271 4,416 4,704 5,263
Japan 3,292 3,587 3,638 3,040 2,832 2,483 2,745 2,697 2,763
Germany 1,872 2,036 1,937 2,036 2,075 1,777 1,825 1,912 2,058
United Kingdom 1,590 1,709 1,746 1,807 1,975 1,888 1,754 1,733 1,871
France 1,463 1,573 1,469 1,536 1,549 1,318 1,341 1,397 1,497

India 917 1,025 1,032 1,070 1,185 1,241 1,359 1,564 1,615
Italy 1,296 1,401 1,279 1,304 1,309 1,116 1,128 1,180 1,257
Brazil 1,330 1,577 1,514 1,526 1,546 1,153 1,154 1,330 1,220
Canada 922 1,003 1,024 1,033 1,008 900 894 956 994
Source: World Bank
1.3 Key Growth Drivers

India’s medium- to long-term growth and its positive impact on private consumption will be determined
by inter-play of demographics and urbanization.
Demographics
Young Population
India has the lowest median age across larger / key developed and emerging countries of world, at 26
years and nearly 65 percent of the population was below the age of 35 years in FY 2012. By 2030, India’s
median age is expected to be under 30 years. India’s sizeable young population augurs well on two counts.
Firstly, it is contributed to declining dependence ratio (the ratio of the dependent population size to the
working-age population size).
These younger consumers are indulgent and are well travelled, brand conscious and well connected. They
have higher spending power and are open to experiment and explore. They expect high quality products
and service standards from consumer brands.
Exhibit 1.3: Median Age: Key Emerging & Developed Economies (2012)
Country Median Age (Years)
India 26
China 35
USA 37
Singapore 38
Russia 38
Korea 39
Canada 40
UK 40
Source: United Nations
The ratio of the number of elderly people and children to the working-age (aged 15-64 years) population
declined from 64 percent in FY 2000 to 52 percent in FY 2016 and is expected to further decrease to 49
percent in FY 2020. This trend not only supports rising income levels and but it also leads to higher share
of discretionary expenditure.
Substantial rise in the working age population (from 36 percent in FY 2000 to 48 percent in FY 2016) augurs
well for growth momentum of the Indian economy going forward, as it will lead to rising income levels.
Moreover, younger population is naturally pre-disposed to adopting new trends and exploration given
their education profile and their exposure to media and technology. This backdrop manifests as an
opportunity for domestic consumption in the form of branded behaviour, organization retail and product
designs.

Exhibit 1.4: Age Dependency Ratio
77% 79%
75%
72%
64%
56%
50%
1960 1970 1980 1990 2000 2010 2018
Source: World Bank
Growing Middle Class

The households with annual earnings between USD 5,000-10,000 has grown at a CAGR of 17 percent from
FY 2011-16 and is further projected to grow at a rate of 12 percent to reach 109 mn in FY 2020. The
households with annual earnings between USD 10,000-50,000 have also grown at a CAGR of 20 percent
over the last five years. Increase in number of households with annual earnings of USD 10,000 to USD
50,000 will lead to increase in indulgence spending by the group. This will lead to increase in expenditure
on apparel & accessories, luxury products, consumer durables and across other discretionary categories.
It is estimated that 23 percent of global middle class will be from India by FY 2030.
Exhibit 1.5: Household Annual Earning Details

Total House HHs with Annual earning % of total HHs with Annual earning % share of total
Year
Holds (in Mn.) US$ 5000 - 10,000 (Mn.) HHs US$ 10,000 –50,000 (Mn.) HHs
2009 221 34 15.20% 10 4.70%
2012 230 55 23.80% 20 8.70%
2014 236 65 26.50% 24 10.20%
2015 239 74 30.90% 32 13.20%
2018 249 103 41.20% 73 29.30%
Source: EIU
Nuclearisation
The increase in household exceeds increase in population growth indicating increasing nuclearization
trend in India. According to census data 2011, 74 percent of urban households have five or less members
as compared to 65 percent in FY 2001. It is expected that fall in the average household size coupled with
rising disposable income will lead to a greater number of urban household units that are pre-disposed to
discretionary expenditure viz. jewellery, fashion, food services.
Exhibit 1.6: Indian Household Size and Growth Trend

Year Total No. of HHs Avg. HH Size Avg. Urban HH Decadal growth Decadal growth
(millions) size rate of HHs rate population
1981 119 5.5 5.4 19.23% 24.65%
1991 148 5.5 5.3 24.68% 23.79%
2001 187 5.3 5.1 26.28% 21.52%
2011 247 5.1 4.9 32.09% 17.64%
Source: India Budget

Increasing Urbanisation
India is second largest urban community in the world after China, with an urban population of about 435
mn (FY 2016). Though, India fares lower than global average in terms of urban population’s share in total
population with only 33 percent of India’s population classified as urban compared to global average of
54 percent. But it is the pace of India’s urbanization that is a key trend to note for implication on India’s
economic growth. It is estimated that as of FY 2020, 35 percent of India’s population lives in urban centres
and contributes to 70–75 percent of India’s GDP.
The urbanization trend is expected to continue and by FY 2050, India will have half of total population will
stay in urban areas and will account for well over 80 percent of GDP. This urbanization pace is rapidly
creating a segment pool of Indians that display migrant tendencies and are without past baggage of habits.
They look forward to new products, services and solutions that help them to adopt to new rules of living.
India’s urbanization pace will envelope two key trends that will have implications on India’s domestic
consumption narrative.
Exhibit 1.7: Increasing Urbanisation

37%
33% 34%
31%
28% 29%
2000 2005 2010 2015 2018 2025P
Source: Secondary Research
High Share of Urban Retail

The share of urbanization has increased from 28 percent in FY 2000 to 33 percent in FY 2015 and is
expected to reach 37 percent by FY 2025. The number of urban agglomerations with population of 1 mn
or more has increased from 35 in FY 2001 to 53 in FY 2011. Increasing urbanization has led to an increase
in the share of urban retail from 48 percent in FY 2012 to 50 percent in FY 2018. This will further increase
to approximately 55 percent by FY 2025.
Exhibit 1.8: Share of Urban and Rural in Overall Retail
52% 50% 45%
48% 50% 55%
2012 2018 2025P
Urban Rural
Source: Wazir Analysis

2
Indian Retail Market

2 Indian Retail Market
India’s retail sector in FY 2020 is estimated to be USD 1002 bn. Food & groceries (F&G) segment forms the
major share of India’s merchandise retail expenditure. High share of F&G is an expected outcome of the
developing nature of the Indian economy. When economies progress, the share of F&G in their retail
consumption basket comes down and stabilizes at around 55 percent as is the case with mature
economies like UK. But such a decline is gradual and spans decades. Decline in share of F&G always favours
a rising share of discretionary retail and in the case of India; apparel & accessories is a primary
discretionary category in the Indian retailing basket. It is expected that in FY 2020 apparel & accessories
will contribute ~ 8 percent of India’s overall retail consumption.
Exhibit 2.1: Share of various Categories in Overall Indian Retail Basket

FY 2015 FY 2018 FY 2020E FY 2025P
Total Retail (USD bn) 559 806 1,002 1,805
Food & Grocery 67.5% 66.7% 65.8% 65.0%
Apparel & Accessories 8.3% 7.9% 7.7% 7.6%
Jewellery & Watches 7.3% 7.7% 8.1% 8.5%
Consumer Durables and Appliances 5.2% 5.9% 6.8% 7.3%
Home & Living 4.2% 4.3% 4.4% 4.4%
Pharmacy & Wellness 2.8% 2.9% 3.0% 3.1%
Footwear 1.2% 1.2% 1.2% 1.3%
Others 3.5% 3.4% 3.0% 2.8%
In India, contribution of organised retail is low (~12 percent in FY 2020) as compared to mature markets
like USA where penetration of organised retail is high. However, in relatively newer market like China the
online market has seen tremendous growth. In India the online channel is expected to grow at a CAGR of
26 percent between FY 2020 and FY 2025, as compared to 20 percent CAGR of organised brick & mortar
channel. India is expected to mimic the Chinese market going ahead, owing to low penetration of
organised retail.
Exhibit 2.2: Overall Retail’s Share across Traditional, Organised & Online Channels
FY 2015 FY 2018 FY 2020E FY 2025P
Total Retail (USD bn) 559 806 1,002 1,805
Traditional 88.1% 88.2% 83.6% 76.0%
Organised – Brick & Mortar 6.5% 9.5% 11.8% 16.0%
Online 0.8% 2.4% 4.6% 8.0%
The organised brick & mortar market in India was USD 118 bn in FY 2020 with categories such as jewellery
& watches (26 percent), food & grocery (23 percent) and apparel & accessories (20 percent) having the
highest contributions. These categories will continue to play a pivotal role in future as well as the
organized penetration within these categories is expected to rise the fastest.

Exhibit 2.3: Organised Brick & Mortar Retail in FY 2020E
Organised Brick &
Overall Retail
Mortar Retail
Key Retailers
Share Size Share Size
(%) (USD Bn) (%) (USD Bn)
Big Bazaar, DMart, Reliance Fresh,
Food & Grocery 65.8% 659.4 22.7% 26.9
Spencer’s
Aditya Birla Fashion, Arvind Brands,
Fabindia, Lifestyle, Raymond,
Apparel & Accessories 7.7% 77.2 20.2% 23.8
Reliance Trends, Shoppers Stop,
Westside
Jewellery & Watches 8.1% 81.2 26.3% 31.1 Tanishq, Kalyan, Malabar
Consumer Durables
6.8% 68.1 6.4% 7.6 Vijay Sales, Croma, Reliance Digital
and Appliances
Home & Living 4.4% 44.1 3.7% 4.4 Home Centre, Home Stop
Pharmacy & Wellness 3.0% 30.1 2.6% 3.0 Apollo, MedPlus
Footwear 1.2% 12.0 2.8% 3.4 Bata India, Metro Shoes, Khadims
Others 3.0% 30.1 15.2% 18.0
Total 100% 1002.1 100% 118.2
Delhi & Mumbai clusters contribute about 9 percent of India’s total retail spending. The top 72 cities
account for 38 percent of total retail consumer spending. The top 24 cities (Metro, Mini-Metro & Tier I)
account for 29 percent of total retail spending which highlights the strength of the rest of India that has a
share of 71 percent. Major expansion in terms of retail consumer spending is expected to come from
India’s Tier II and Tier III cities as consumerism and appetite for organised retail and fashion is perceived
to be on the rise in these markets. Retail players with a nationwide presence are expected to benefit
significantly from this opportunity.
Exhibit 2.4: Overall Retail Spend Across Different City Types (USD bn)
631
352
90 100 90 90
50 56 50 50
Top 2 Cities Next 6 Cities Next 16 Cities Next 50 Cities Rest of India
FY 2015 FY 2020E

3
Indian Fashion Market

3 Indian Fashion Market
3.1 Overall Apparel Market
The overall apparel segment size in FY 2020 was estimated to be USD 67 bn. The market is projected to
grow at ~10 percent and reach USD 107 bn by FY 2025. This growth is expected to be driven by factors
such as more purchasing power driving growth in primary discretionary spend, better access and
availability of products, acute brand consciousness, increasing urbanization and increasing digitization.
Exhibit 3.1: Indian Fashion Market (USD Bn)
~10%
107
67
55
41
FY 2015 FY 2018 FY 2020E FY 2025P
The branded apparel sector will witness a growth of 13.4 percent CAGR over the next five years as against
the 10 percent CAGR projected for total apparel sector.
Exhibit 3.2: Penetration of Branded Apparel and Organized Apparel Retail
as a % of Apparel Market
48% 56%
38% 33% 40%
25% 20% 25%
FY 2012 FY 2018 FY 2020E FY 2025P
Branded Apparel Organised Apparel
Lifestyle retailers, such as Aditya Birla Fashion, which is one of the leaders in Indian fashion industry,
have succeeded in emerging as category leaders with a presence across price segments of value,
premium, super-premium & luxury and a balanced portfolio across segments of men’s casual wear &
formal wear, women’s formal, casual & ethnic wear and kids wear. The company and its subsidiaries are
one of India’s largest pure-play fashion and lifestyle companies in terms of revenue with a strong bouquet
of leading fashion brands and retail formats across various segments and categories with pan-India
distribution. While Forever 21 is a global fast fashion brand with significant popularity primarily amongst
young girls, People is a young brand that seeks to address the fashion aspirations of Indian youth which
used to be an independent brand and it operates primarily as one of the private labels within the

Pantaloons segment with the focus on young customers. Forever 21 is one of the most popular global fast
fashion brands amongst youth. The branded apparel sector is expected to witness increased penetration
from the current levels at 48 percent (FY 2020) to a substantial share of 56 percent by 2025. Aditya Birla
Fashion is well placed to take advantage of this opportunity as it has one of the largest distribution
networks of apparel businesses in the country.
3.2 Western Wear & Ethnic Wear Mix

The apparel market in India is dominated by the western wear market (contribution ~69 percent in FY
2020) and it is expected to grow and contribute ~72 percent by FY 2025. Increasing number of working
women, a shift towards aspiration rather than need based buying is expected to drive the western wear
market in India.
The ethnic wear market is also expected to grow at ~7.8 percent and reach nearly USD 30 bn in FY 2025
from USD 20.6 bn in FY 2020. This ethnic wear segment is dominated by women wear as Indian women,
Indian and ethnic fashion is a mainstream need for daily wear use (in addition to strong occasion wear)
whereas for Men it currently restricted to occasion wear viz. weddings and festivals.
Exhibit 3.3: Breakup of Western Wear & Ethnic Wear
35% 32% 31% 28%

(Market Share)
65% 68% 69% 72%
FY 2015 FY 2018 FY 2020E FY 2025P
Western Wear Ethnic Wear

Western Wear
The western wear market in India is expected to grow at a CAGR of 10.9 percent between FY 2020 & FY
2025.
Exhibit 3.4: Overall Western Wear Market
77
27 37 46
FY 2015 FY 2018 FY 2020E FY 2025P
In FY 2020, men’s western wear accounts for nearly 93 percent of the total men’s wear market of USD 28
bn, while in women western wear holds 32 percent of the total USD 25 bn women’s wear market. Within

the kid’s segment, western wear accounts for 86 percent of the total USD 14 bn kid’s wear market. This
implies that men and kids western wear is the mainstay for western wear in India.
Exhibit 3.5: Western Wear Market Mix
26% 26% 26% 26%

17% 17% 17% 19%
58% 57% 56% 55%
FY 2015 FY 2018 FY 2020E FY 2025P
Mens Womens Kids
Exhibit 3.6: Branded Vs Unbranded Mix Across Men’s, Women’s & Kids
43% 40% 47% 45%

48% 52% 52% 49%
58% 62% 58%
77%
57% 60% 53% 55%

52% 48% 48% 51%
42% 38% 42%
23%
FY 2018 FY 2020E FY 2023P FY 2025P FY 2018 FY 2020E FY 2023P FY 2025P FY 2018 FY 2020E FY 2023P FY 2025P
Mens Womens Kids
Branded Unbranded

T-shirts is considered as one of the most comfortable and dynamic categories of western wear. Due
to its soft knit fabric, fits, and the versatile use, it is highly acceptable to a wide segment of customers.
Due to comfort choices for fabric, designs, fits – categories such as shirts along with tops, trousers
and skirts are quite popular with youth in both urban as well as rural areas.
The Indian denim market is exhibiting continuous growth over the years. With new technologies,
trends and higher market reach, this sector has promising growth potential. Even in rural areas,
denim is becoming highly fashionable with most men and teenager girls opting denim wear over
traditional outfits. Denim is a high growth category as it is fashionable and comfortable, and
enhances style quotient. The value growth within the denim wear owes to increased demand for
stretch and light weight fabric, varying colours, styling and detailing. This trend is emerging across all
categories (men’s, women’s and kids).

Exhibit 3.7: Key Western Wear Categories
Categories % share in total Western Wear Growth Rate
Trousers 19.1% 6.0%
Shirts 18.2% 5.7%
Innerwear 13.8% 10.0%
T-Shirts 10.8% 9.2%
Exhibit 3.8: Share of Casual & Formal in Men’s & Women’s Western Wear
Men's Western Wear Women's Western Wear
CAGR – 8%
CAGR – 7% 23%
32%
68% CAGR – 11% CAGR – 12.5%
77%
Casual Formal Casual Formal
In the illustrative below, we have captured the various business models for adopted by players for
expansion of western wear.
Exhibit 3.9: Comparison of Western Wear Retailing Formats in India
National Players Private Label Online First
Category Online First
Multi-Category Distribution Private Label Multi-Brand
Focused Private
Retailer Brands Focus Brands Format LFS LFS
Retailers Label
Key Brands
Share of
Western
Wear in 100% 100% 100% 50-60% 50-60% 100%
total
Business

Breakup of
Sales by
Channel
Pan-India
Pan-India
presence
Pan-India presence
with
presence with with
significant Launched
Retail significant significant Pan-India Pan-India
penetration offline
Presence penetration across penetration presence presence
across Tier stores
Tier 2 and below across Metro
2 and
towns & Tier 1
below
towns
towns
Price Mid to Mid to

Mid to Premium Mass to Mid Mass to Mid Mass to Mid
Positioning Premium Premium
Source: Wazir Analysis Legend:
Lifestyle national apparel players marked by Arvind Brands, Aditya Birla Fashion have ensured relevant
offering straddling price segments of premium, mid-premium, economy and mass. Through lifestyle
brands, Aditya Birla Fashion is a leading premium branded apparel player in India with three of the largest
apparel brands in India, Louis Philippe, Van Heusen and Peter England. The bouquet of lifestyle brands
with the Aditya Birla Fashion segment are amongst the top fashion apparel brands in the country.
The premium and super-premium segment enjoy 17% of the total apparel market; with the mid, economy
and mass segment taking an equitable contribution share of ~28% each. Hence, brands and retailers that
have developed strategies to cater to the entire spectrum augur well for growth. In the last few years,
Aditya Birla Fashion has expanded its presence in casual wear through brand extensions and gained a
strong position in the fast-growing value fashion segment through Pantaloons segment. International
brands portfolio of Aditya Birla Fashion comprises The Collective, India’s largest multi-brand retailer of
international brands and licensee businesses of select premium/luxury brands such as Ted Baker, Hackett,
Simon Carter, Polo Ralph Lauren, Fred Perry, Ralph Lauren and American Eagle.
This segment of fashion retailers leveraged design, product, and supply chain capabilities to consistently
invest in product differentiation, fashion quotient, fabric attributes to cater to distinct customer
segments and regional sensibilities
As international brands forayed into the country and increased focus on the geography, domestic lifestyle
brands leveraged their strong brand salience, high loyalty factor for category adjacencies and extension
across apparel as well as fashion categories of footwear, accessories.
Whilst Exclusive Brand Formats (EBO) emerged the core format for western wear fashion retail, in the
strive to translate the seamless retail experience as well be available to the relevant customer segments,
these brands adopted a multi-channel strategy with commensurate presence across all channels.
With the online pie within apparel expected to increase to nearly four times, albeit on a small base, over
the next four years, omni channel will comprise a significant share of this online apparel segment.

Organized brick & mortar will continue to enjoy the larger, sizable share at USD 32.5 bn, and three times
the scale of online retail.
Leading brick & mortar (B&M) retailers will lead this offline to online (O2O) drive compared to the online
horizontal and vertical players. These lifestyle retailers enjoy the advantage of a robust wide retail
network across the metro-centric as well as Tier 2 and 3 Indian cities.
3.2.1.1 Growth Drivers – Western Wear
Within the overall Indian apparel market, the western wear market has evolved significantly over the last
couple of years. The industry has witnessed rapid growth, triggered by increasing usage of western wear
by fashion conscious youths. The change in classification of consumer wardrobe has acted as a growth
driver for western wear in India. Western wear brands are growing across all segments of the Indian
market (premium, medium and value). International brands like Zara and H&M have seen rapid growth in
the western wear segment over last few years.
Certain factors which are contributing as key growth drivers of western wear in the country are
enumerated below:
Youth as a growth driver:
Youth (15 to 29 years old) who comprise 26 percent of the consuming population, are a key growth driver
of western wear in the country. Increasing disposable income, comfort, quality and brand consciousness
are major reasons behind increasing acceptance of western wear among this young population.
Influence of International Brands:

The entry of the international brands in the country is one of the biggest drivers of western wear. Their
entry has widened the perspective of consumers which in turn has resulted in higher acceptability of new
trends, styles in the market. With the increasing exposure to international fashion trends, the Indian
consumer today is aware of global trends and has given him more variety to choose from.
Online penetration of Western Wear:

Increased penetration of internet coupled with burgeoning smart phone market has resulted in the
growth of e-tailing in India. Due to ease of ordering online, paucity of time, flexible return policies and the
cash on delivery, the youth of India is more likely to purchase western wear online.
Increased rural spending:

Rural areas are developing at a rapid pace and so is their purchasing power. With the percolation of mass
media, people in rural areas are also aware of fashion trends. Their inclination towards western trends is
another reason for the growing demand of western wear in rural areas. The mid- value segment of
western wear, characterized by quality, value-for-money, and increasing styling quotient, is the preferred
choice of people from rural areas.
Casualization of Fashion:
The Indian casual wear market has evolved significantly over the years. Casual wear categories such as
denim, activewear, casual shirts, and fashionable skirts are outpacing the growth of formal wear in India.
This is reflective of the changing consumer trend and increasing usage of casual wear in offices as well as
home. This shift in consumer’s wardrobe towards casual wear has acted as a growth driver for the western
wear in India. The casualization of fashion is not unique to India and is driven by global phenomena.

Earlier, fashion was considered as a basic need to be purchased on the basis of the requirements.
Consequently, the typical consumer wardrobe was limited to basic categories like shirts, trousers,
sweaters, sarees and salwar kameez. The basic purchase parameters were limited to the basic functions
of the cloth, comfort and price. However, with the changing socio-cultural values, increased per capita
consumption, increasing exposure to international fashion trends and growing disposable income apparel
market is slowly becoming more occasions specific. Consequently, fashion basket has expanded to include
clothing like casual wear, sports/gym wear, jackets, jeans etc.
Rise of Athleisure:
Athleisure is another growing segment which is growing faster and there is an opportunity for brands to
enter this segment. The athleisure trend has really caught up over the last decade as there has been a
growing health and fitness related awareness among Indian consumer, especially the young consumers
who have taken up different fitness activities such as yoga, running, etc. This has resulted in an increased
spending by consumers on purchase of appropriate gear for such activities thus resulting in a significant
growth of the segment.
Lifestyle Brands Increase their Brand Assortment:

Lifestyle brands such as Arrow, Louis Philippe, Park Avenue, Raymond, Van Heusen are leveraging and
combining their popularity and brand presence to increase their assortment width by extending into
related categories such as accessories, footwear, inner wear as they move into tier II & III cities, where
customers have limited strong brand availability for these categories.
Rise of private label:

Branded penetration in the market has a skew towards mid to premium price points and there is very
limited offering in the value price points leading to pricing gaps in the market. These gaps in the market
have provided an opportunity for retailers to launch their private label in the value segment. Private label
led players such as Pantaloons, Westside, FBB, Max and V-Mart identified these gaps and have launched
products in the value fashion segment.
Private labels are win-win solution for both big retailers and value for money first time consumers as these
labels ensure that a certain minimum quality and image. Young population from middle class India is
becoming image conscious and is a significant contributor to the western wear market. The private labels
offers many benefits to retailers such as,
• ability to offer better pricing & value to their customers and drive higher margins owing to low
advertising & promotional costs,
• offer new merchandising options and thus create a differentiation in the market and also drive
customer loyalty,
• better control over processes since they have complete control over important functions such as
design, pricing, merchandising, stocking and distribution,
• higher bargaining power with suppliers

Exhibit 3.10: Private Label Western Wear
Over the years categories that were marked by limited focus from the supply perspective vis-à-vis retail
penetration and city expansion have lent significantly to the private label play. Overlaying these dynamics
were demand led levers of these categories such as relatively high price elasticity, low branded propensity.
Hence categories such as T-shirts, Casual Shirts and Ethnic wear propelled the growth of private label.
These categories tended to get focus from LFS (large format store) owing to the high share of private label
penetration within these formats. Further in the strive to complete the assortment offering from brands
that serve as traffic drivers, the LFS format came to enjoy high salience amongst consumers seeking
fashion.
As consumers in the next rung of Indian cities i.e. Tier 2 and Tier 3 cities become increasingly aspirational
and eager to engage with fashion, the LFS format got segmented further into lifestyle LFS and Value LFS
formats.
Formats such as Pantaloons, Max that offer high fashion quotient and enjoy the strong proposition of
fast fashion combined with value have strong tailwinds for growth as they a) cater to a wide category
offering cutting across the wardrobe of western wear, ethnic wear, casual wear and active wear b)
opportunity to balance price and fashion c) high share of private label d) cater to opportunity in cities
beyond metro-centric India for further growth.
Innerwear – Emerging Category within Western Wear:

No category better exemplifies this statement than the innerwear category which over the last couple of
decades has evolved from a category driven by ‘basic necessity’ to ‘lifestyle fashion category’. The
consumers in metros & tier I cities, who constitute an important market for this category, are increasingly
discerning and chooses products based on both styling and comfort. Consumers in non-metros are also

realizing the importance of better brands, hence this segment will see high growth and thus to attain pan
India presence a brand cannot ignore non metros.
This innerwear category exhibits highest penetration of branded play across retail categories, with brands
contributing nearly 45% share. This, however is marked by commoditized brands that achieved scale
through the wholesale channel. This has led to many national & international lifestyle brands such as Park
Avenue, Levi’s, United Colours of Benetton, Van Heusen, FCUK, Tommy Hilfiger entering this segment at
the premium end. Although the branded play in the innerwear category is very high, but the category is
highly commoditised.
The overall innerwear market in FY 2020 is expected to be USD 6.5 bn with women’s category contributing
nearly 2/3rd of the market. Men’s innerwear mid-premium to premium is dominated by Jockey, and there
is wide space for the demand to be fulfilled. The women’s mid-premium to premium segment is
fragmented in products & prices with no leadership. Women are looking for enhanced attributes such as
plus size, maternity bras & shapewear and formats & brands have not geared up to meet these customer
service demands. There is thus a place for vertical specialist.
Exhibit 3.11: Innerwear Market – FY 2020E
CAGR 5.5% 11% 11.5% ~25%
Men's 47% 35% 16% 2%
Women's 43% 40% 15% 2%
CAGR 11.5% 17.5% 20% ~20%

Economy Mid Premium Super Premium
Currently, unorganized general trade segment dominates channel dynamics with 85 percent contribution
share. Owing to distribution focus by brands combined with display characteristics, the hosiery store
format will continue to be important in future as well. However, the online channel will drive growth as it
enables players to offer a greater width and depth in assortment as well as provide conducive buying
environment.
Ethnic Wear
Indian consumers no longer sport formal or casual attire for family functions and marriage ceremonies;
they prefer ethnic wear that reflects uniqueness of the Indian cultural ethos. While, the appeal of apparels
inspired by local/ regional designs, raw material, styles etc. in other markets is restricted to occasion wear
and does not extend to daily wear use. In the case of India ethnic fashion has succeeded to retain its
mainstream appeal. There is high degree of preference and contribution of ethnic wear in the women

wear category and is a unique feature of Indian apparel market. Ethnic wear is the largest segment within
apparel industry, most of which lies within the women’s segment.
The category association revolves around comfort, contemporization as well as convenience. Whilst the
consumers in Tier I cities, compared to the metro-centric consumers, tended to be strongly governed by
traditional usage of the sari, the ethnic wear category, with products like salwar kameez, kurtis is
increasingly becoming the category sought as it offers both conformity and style. In the men’s segment,
nehru jackets, indo-western, sherwani and kurta sets are the various categories. In the overall segment,
women’s contribution to the overall ethnic wear pie is almost 9 times to that of men’s contribution.
Exhibit 3.12: Men’s Ethnic Wear & Women’s Ethnic Wear Mix
Men's Ethnic Wear Mix Women's Ethnic Wear Mix

15% 7%
35%
42%
20%
51%
30%
Nehru Indo Western Sherwani Kurta Sets

Jackets Saree Salwar Kameez / Kurti Blouse/petticoat
Women’s ethnic wear has transitioned from just being traditional wear to daily wear that combines
tradition with contemporary fashion. Ethnic wear categories have maintained salience across geographies
as well as across consumer segments of varying socio-economic strata, age groups and lifestyles, in spite
of the increasing penetration of western wear. The mix of key formats in the women’s ethnic wear
retailing is depicted in the chart below,
Exhibit 3.13: Split of Women’s Ethnic Market Across Formats
CAGR - 51% National

21%
43% CAGR - 36% Private Labels
18% Regional Brands
CAGR - 13%
18% Online Focussed
CAGR - 25%

Exhibit 3.14: Retailing Formats in Women’s Ethnic Wear
National
Brands
Regional
Brands
Large
Format
Stores
Online
Focussed
Formats

Exhibit 3.15: Comparison of Women’s Ethnic Wear Retailing in India
National Players Regional Player Private Label Online
Ethnic Ethnic Ethnic Apparel In-Store In-Store Neighbourhoo

Lifestyle & Apparel led led Retail Ethnic Ethnic d stores/
Fashion Retail brands Apparel Apparel Boutique
Retailers Brands brands of brands of Shops
Multi- Multi-brand
brand LFS
Retailers
Key Brands
Breakup of 40-50%
Sales by 30-40% 70-80%
100% 100% 100% 100%
Channel 5-10% 20-30%
5-10%
Pan-India Pan-India
presence presence Limited to a Pan-Indian
with with particular presence
Limited to a
Retail significant significant region. For with higher Pan-India
particular city
Presence penetration penetration example, Ibadat penetration presence
or cluster
across Tier 2 across Tier 2 in North and in smaller
ad below ad below Kiara in South towns
towns towns
Price Mid to Mid to Mid to Mass to

Premium Premium Mass to Mid Mass to Mid
Positioning Premium Mid
Source: Wazir Analysis Legend:
3.2.2.1 Growth Drivers – Ethnic Wear

Some of the key growth drivers for this category are,
Growing preference of occasion-specific clothing is making ethnic wear the most preferred choice for
social functions
Indian consumers no longer stick to formal or casual attire for family functions and marriage ceremonies;
they rather prefer ethnic wear that reflects uniqueness of the Indian cultural ethos. This trend has
extended to national days like the Independence Day, Republic Day, when ethnic wear takes a lead over
other categories. Innovative marketing and promotion (by brands) that links days of national importance

to display of patriotism through ethnic attire have contributed to the growing demand of ethnic wear for
such occasions. Many corporates, both Indian and international, have started encouraging ethnic dressing
during the occasions of Diwali, Holi.
The ethnic wear consumers are seeking association with brands:

The ethnic wear consumers have started inclining towards branded apparel owing to assurance of better
design, quality and fit. Growing disposable income, increasing aspiration levels among youths are driving
factors for branded ethnic wear market in India. Consequently, the ethnic wear market, in recent years,
has witnessed high growth trajectory of existing brands as well as entrance of many new brands. While
the Indian brands compete with international brands in western wear categories, they have an edge in
ethnic wear products. Proliferation of brands is more distinguishable in women’s ethnic wear as unlike
men, women use ethnic wear as formal wear as well. The growing acceptance of ethnic wear as work
wear is also driving demand for ethnic wear.
The deep-value conscious consumers prefer private labels for everyday use, wait for discounts and
promotion:
The value conscious consumers seek better deals while opting for ethnic wear fashion. They wait for
discounts, gift coupons and special offers to purchase their ethnic fashion. High price inflation in recent
years has increased the number of value conscious consumers. Private label offerings of retailers have
managed to tap the quality and price requirements of these consumers. Almost all the key retailers have
introduced their private labels that offer optimum combination of quality, trust and reliability and
consumers have started viewing these private labels as brands.
Focus of Large Format Stores on ethnic wear:

The ethnic wear category has witnessed significant focus from the large format lifestyle retailers players
through private label offerings owing to its prevalent adoption across geographies and age groups. Few
other categories have received similar high levels of focus from large format stores. In the strive to
complete the assortment offering along with national brands in addition to private labels, the platform,
over time, has evolved to form an essential pillar for the growth of ethnic wear.
Consumers are increasingly adopting alternate retail channels for ethnic wear as well:
The ethnic wear consumers are no longer restricting themselves to traditional retail channels. Indian
consumers have started looking beyond mere products; they increasingly seek quality shopping
experiences combined with best pricing, wide range of product portfolio, multiple brands under one roof.
Consequently, ethnic wear retailing has evolved from traditional family-based stores of cities to large
format stores, E-tailing, home shopping. Consumers have also started accepting ethnic wear-only online
retailers. In fact, some of these ethnic wear-only retailers cater to the Indian diaspora across Asia, Europe
and the US.
Mix and Match:

Indian women have uniquely blended ethnic fashion with western wear and mixes both to create own
styles. For instance, denim wear with kurtas. They also patronize global designs / colours / prints on Indian
silhouettes for contemporary global prints on Kurtas.

Heterogeneous wardrobe:
Relevant segment of Indian women have a diverse wardrobe that comprises a mix of ethnic fashion
(sarees, kurtas, leggings) and western fashion (T-shirts, denims, dresses etc.). This wardrobe is not only
diverse but it is used interchangeably for similar use for instance – dress for work can both comprise.
Movement from RTS/Tailoring to Ready to Wear options:

But it is a challenge for global fashion brands to respond to this opportunity in Indian ethnic fashion as
the overall size of Indian ethnic fashion is neither big enough not broad enough (appeal outside of India)
for the global supply chain of western wear to align itself on raw materials, sourcing and merchandising
approach for ethnic wear. Raw materials and sourcing for Indian ethnic fashion is a mix of artisanal skills
& machines and handlooms & power looms. This poses challenge for the scale of global fashion brands.
Also, the global design response that interprets trends into products for global brands requires
interpretation of Indian ethos, fabric, colours into products.
As ethnic wear to evolving into engagement with organized formats with consumers driven primarily by
Ready-to-Stitch, it is also witnessing what is termed as the circle of fashion. Consumers seek offering that
is exclusive, customized and unique. This has given rise the trend of accessible designer wear. Designer
wear is blending into avatars of becoming more available and hence mainstay. This is true, especially for
Ethnic wear owing to the celebration of the Indian ethos. This is being propelled by both demand and
supply levers, giving popular and upcoming designers to leverage this platform. Concepts such as Jaypore
that celebrate Indian fashion, fabrics, weaves, designers across are a key example of leveraging this
trend. The premium ceremonial ethnic wear is catered to by key designer boutiques such as JJ Valaya,
Shantanu & Nikhil, Sabyasachi. Jaypore and Shantanu & Nikhil operate in the premium and luxury part in
the ethnic wear.
3.3 Consumer Segments
Exhibit 3.16: Men’s Apparel Market
CAGR 10.3% 8.6% 14.2% 10.3% 13.6% 8.4%
45.3 21.6
14.3
(USD Bn)
27.7 13.2
6.8 5.7
3.8
1.9 3.1 0.9 1.7
Total Market Size Formal Casual Innerwear Activewear Others
FY 2020E FY 2025P

Exhibit 3.17: Women’s Apparel Market
CAGR 9.4% 7.6% 14.1% 12.5% 16.1% 7.1%
39.0 24.4
(USD Bn)
24.9 16.9
8.5
4.4
1.0 1.8 0.9 1.9 1.7 2.4
Total Market Size Ethnic Innerwear Formal Casual Others
FY 2020E FY 2025P
Men’s Wear
The men’s apparel is estimated to have contributed close to 42 percent (USD 28 bn) to the overall apparel
market in FY 2020 and is expected to grow at ~10.3 percent and reach USD 45 bn by FY 2025.
Exhibit 3.18: Overall Men’s Wear
~10.5%
45
28
23
17
FY 2015 FY 2018 FY 2020E FY 2025P
In men’s western wear category, the market is expected to grow at 10.36 percent from USD 25.9 bn in FY
2020 to USD 42.4 bn by FY 2025. Shirts and trousers are the two biggest components contributing nearly
50 percent of the overall category. Denim and activewear are the fastest growing categories, growing at
near 15 percent between FY 2020 and FY 2025.

Exhibit 3.19: Men’s Western Wear (including Innerwear) – FY 2020 & FY 2025 (USD bn & %)
FY 2020E FY 2025P
0.4, 2% 0.5, 1% 3.1, 7%
1.9, 8%
11.0, 26%
7.3, 28% Shirts
0.9, 3% 1.7, 4%
Trousers
Suits/Coats/safari suits
4.7, 18%
9.3, 22% Winterwear
T-Shirts
Denim
2.1, 8% Activewear
9.3, 22%
6.0, 23% 3.9, 9% Others
1.6, 6%
1.0, 4% 2.3, 6% 1.3, 3% Innerwear
Men’s Innerwear
Men’s innerwear is a relatively small part of overall western wear category, contributing 8 percent to the
overall in FY 2020 (USD 1.9 bn) and is expected to grow at 10.3 percent to contribute nearly USD 3.1 bn in
FY 2025. In the men’s innerwear segment, mass segment players enjoy lower brand loyalty as compared
to premium players, however no brand witnesses as much loyalty from consumers as Jockey. Consumers
in tier I and II cities are aspirational about brands and will pay a premium for it. Basic range for briefs and
vests is mostly sold in packs of 2s and 3s by the premium and super premium segment, while the more
expensive fashion range is not.
Exhibit 3.20: Men’s Inner wear (USD bn)
~10%
3.1
1.9
FY 2020E FY 2025P
Men’s Ethnic Wear

For men ethnic wear it currently restricted to occasion wear viz. weddings and festivals and is represented
by Nehru Jackets, Indo Western, Sherwani and Kurta Sets. Kurta accounts for major share of the men’s
ethnic wear followed by Sherwani and items such as Dhoti.

Exhibit 3.21: Men’s Ethnic wear (USD bn)
~9%
2.9
1.8
1.5
1.2
FY 2015 FY 2018 FY 2020E FY 2025P
Women’s Wear
Women’s apparel market contributes 37 percent to the overall apparel market and it is expected to grow
from USD 25 bn in FY 2020 to touch USD 39 bn by FY 2025. The growth in women’s wear market will be
driven owing to an increase in the number of working women, a shift towards aspiration rather than need
based buying and design innovations that appeal to Indian sensibilities.
Exhibit 3.22: Overall Women’s Wear
~9%
39
25
21
16
FY 2015 FY 2018 FY 2020E FY 2025P
The overall women’s western wear category in FY 2020 is estimated to be around USD 8 bn and is expected
to grow at a CAGR of 13 percent over the next 5-year period to reach USD 14.7 bn by FY 2025. In the
women’s western wear category, innerwear has the biggest share with share of more than 55 percent in
FY 2020 and is expected to increase its share to 58 percent by FY 2025. Categories like tops, denim,
sleepwear and winterwear contributed 8-9 percent each in the overall women’s western wear segment
in FY 2020 and these segments are expected to continue their strong growth trajectory over the next 5-
year period as well.

Exhibit 3.23: Women’s Western Wear (including Innerwear) – FY 2020 & FY 2025 (USD bn & %)
FY 2020E FY 2025P
0.3 , 3% Tops/shirts
0.4 , 3%
T-Shirts
0.7 , 9% 1.0 , 7%
Denim
0.3 , 3% 0.5 , 3%
Formal Jackets
1.0 , 7% Sleepwear
0.7 , 8%
4.4 , 8.5 , 58% Trousers/skirts
55% 0.2 , 1%
0.1 , 2%
Winterwear
1.3 , 9%
0.6 , 8% Others
0.3 , 4% Innerwear
0.6 , 4%
1.1 , 8%
0.6 , 8%
Women’s Innerwear
Women’s innerwear category is currently estimated to be around USD 4.4 bn and is expected to grow at
a CAGR of 14 percent and nearly double by FY 2025 (USD 8.5 bn).
Exhibit 3.24: Women’s Inner wear (USD bn)
~14%
8.5
4.4
FY 2020E FY 2025P
Although this women’s innerwear market is complicated as compared to men’s with multiple width
(types) and depth (sizes, colours, styles) combinations but increase in the width & depth of online offerings
is expected to drive this segment. This segment is also expected to be driven by changing consumers
preference from ‘Foundation’ to ‘function plus fashion plus comfort’. Rising popularity of the fashion
range is also expected to drive the growth of this segment.
Women’s Ethnic Wear
The women’s ethnic wear market contributes nearly 70 percent of the overall women’s apparel category.
The market is expected to grow at a CAGR of 7.6 percent and grow from USD 16.8 bn in FY 2020 to USD

24.3 bn in FY 2025. The salwar kameez/kurti is the biggest segment within women’s ethnic wear category
contributing nearly 50 percent of the market.
The disproportionate size of ethnic wear in women’s wear is an outcome of the distinct positioning of
ethnic wear for women compared to that of men in India. For Indian women, ethnic fashion is a
mainstream need for daily wear use (in addition to strong occasion wear) whereas for men it currently
restricted to occasion wear.
Exhibit 3.25: Women’s Ethnic Wear Breakup
1.5
1.2 13.9
1.1
0.9 7.0 8.6
5.4
6.5 7.1 9.0
5.5
FY 2015 FY 2018 FY 2020E FY 2025P
Saree Salwar Kameez /Kurti Blouse/petticoat

Kids Wear Breakup
The kids wear market in India is currently about USD 14 bn (FY 2020) and is expected to grow at a CAGR
of 10.5 percent and grow to nearly USD 23 bn by FY 2025. Uniforms, t-shirts/shirts and bottom wear are
the three biggest categories contributing at 37 percent, 24 percent and 18 percent of the overall kids wear
market as on FY 2020. Kids denims is the showing the fastest growth rate of 13 percent among all the
other product categories (FY 2020 - FY 2025).
Exhibit 3.26: Kid’s Wear Breakup
2.1
8.4
1.5
1.8
1.3
5.1
1.0 4.1 4.1
1.2 0.6
3.0 1.0 2.5
0.8 2.1 0.3
1.5 0.3 5.8
0.2 2.6 3.3
1.8
FY 2015 FY 2018 FY 2020 FY 2025
Tee/Shirts Denim Bottomwear Winterwear Uniforms Others

3.4 Format & Channel
Exhibit 3.27: Channel Mix
2% 3% 4% 11%
26% 27%
(Market Share)
29%
30%
72% 70% 67% 59%
FY 2015 FY 2018 FY 2020E FY 2025P
Traditional Retail Organized B&M Online
Traditional Retail Formats

While, the traditional retail expected to continue its domination in the apparel segment, but its
contribution is expected to come down from 67 percent in FY 2020 to 59 percent in FY 2025. This segment
is expected to grow the slowest between FY 2020 and FY 2025 (~7.2 percent) and reach USD 63 bn in FY
2025 from USD 45 bn in FY 2020.
Brick & Mortar Organised Formats

Organised retail trade has been growing steadily since the 1990’s and has steadily expanded its footprint
across the country. It started with manufacturers opening their own outlets and soon pure play retailers
realizing the potential got into this space. In the next phase international players got into the market, but
the reach of organised retail was still limited to metros and tier I cities. In the period after 2010, more
speciality formats entered the market and finally 2017 onwards, brands and retailers have been driving
to serve the customer in a seamless way across multiple channels, by adopting the omnichannel concept.

Exhibit 3.28: Evolution of Brick & Mortar Fashion Retail
Apparel & footwear have been the harbinger of organized retail in India. Brands such as Aditya Birla,
Arvind, Bata, Raymond and Vimal introduced the concept of exclusive brand retailing (EBO) to India and
until 1995, organized retail was synonymous with the EBO format. The organised brick & mortar was led
by and continues to be dominated by the lifestyle retail brands backed by large retail houses of India.
These lifestyle retail brands have succeeded in building a country wide footprint, and among these brands
Aditya Birla Fashion has one of the widest distribution network of apparel stores across the country.
Shoppers Stop started the first large format store (LFS) multi-brand outlet in mid-nineties triggering the
phase and expansion of multi-brand lifestyle retailing. A few years hence, Westside and Lifestyle also
started their private label led large format stores. This phase also witnessed,
▪ retail expansion by key brands: Arrow, Van Heusen, Raymond, Louis Philippe
▪ entry and footprint increase by international popular fashion brands: UCB, Levi’s, Nike, Adidas
The decade of ’00 to’10 was marked by the evolution of fashion into sharp segments of,
• category specificity across formal, casual, ethnic, activewear, footwear
• emergence of fashion brands and retailers, and hence private labels
• multi-format play across EBO centric, LFS category specialist, LFS multi-brand formats.
The above phase was owing to increased focus and competitive intensity of the India fashion space with
the,
• entry of large conglomerates into fashion retail with multi-category, multi-format play,

• fashion brands increasing focus on supply chain and category offering as well as
• leading international brands foraying into India
• development of brand aggregator models as Arvind Lifestyle, Genesis Lifestyle
All the above factors combined to propel the current decade (’11 to ’20) wherein organized retail is the
key enabler for growth of branded play within fashion. Today, organized apparel retail in India reflects a
journey of more than two decades that has allowed it to build product design, sourcing, merchandising
and retailing capabilities.
Leading retailers developed and invested in key functional elements accredited to retailing: design
institutionalization, assortment planning, retail foray, city penetration, skill training
The country has seen the entry of foreign brands in the country in last few years and more brands will
continue to enter in the few years and more brands will continue to enter in the country with 100% FDI
in single brand retail.
Indian lifestyle brands, however, leverage deep understanding of consumer trends, uniqueness of India
fashion market, enjoy consumer loyalty in addition to understanding of the geographical and regional
diversity of the country.
Domestic lifestyle apparel brands, Fabindia, Louis Philippe, Van Heusen, Raymond, Arrow, W, BIBA, AND,
Zara and Large Format Stores like Shoppers Stop, Lifestyle, Pantaloons will continue to adopt aggressive
penetration and foray into Tier I and II Indian cities in order to tap the potential. Pantaloons which is a
leading large format fashion retailer as well as a leading player in the value fashion segment, is engaged
in retailing of apparel and accessories.
Organised brick & mortar segment will see a steady growth rate of ~11.7 percent between FY 2015 and
FY 2025 and grow to about USD 32.6 bn by FY 2025.
Online Formats
The share of online is currently ~4.5 percent of the overall apparel market. The share of online in the
overall apparel market is expected to increase in future but it won’t affect the share of brick & mortar
retail and both the channels will continue to co-exist.
The online market has grown manifold in recent years and witnessed the emergence of strong vertical
players with widespread geographical reach. However, the large retail houses will also be able to translate
the legacy and trust enjoyed by these brands when they move toward offline to online models.

Exhibit 3.29: Evolution of Online Retailing in India
With respect to the online space within the fashion and lifestyle retailers broadly fall under 5 key segments
based on their merchandize offering and business model,
• Horizontal Marketplace: player who having a wide spectrum of offering and multi-brand offering
• Vertical Aggregators: they have a relatively narrower category focus, e.g., apparel and lifestyle
and offer multiple brands within their segments
• Western Private Label Led: These players offer lesser categories, but along with multi-brand
offering they also have a focus on private labels
• Ethnic Fashion Led: they are ethnic only focussed players. While they have a sizeable category
offering in the form of apparel and lifestyle, their products are principally based around ethnic
taste
• Online Extensions of B&M Retailers: many B&M centric players have forayed in to online retailing.
This trend is observed with retailers like Shoppers Stop as well as apparel and lifestyle brands like
W, BIBA, Fabindia

Exhibit 3.30: Business Models for fashion e-commerce
The online apparel retail market in FY 2020 was USD 2.9 bn. Men (50 percent) and women (44 percent)
segment contribute to bulk of online apparel market with kids contributing only ~6 percent of the market.
High share of men’s segment in online apparel market is driven by high penetration of casual wear
categories.
Myntra is the leader in online apparel market driven by wide collection of brands across price points
catering to wider set of consumers. High market share of Myntra in online apparel market is driven by
wide collection of brands across price segments; increasing focus on private label to bridge the price gap
offering in the market.
Online apparel market is dominated by western wear contributing to ~60 percent of share of the market.
High share of western wear in online apparel market is driven by high penetration of international and
casual wear brands on online platform. Also, online fashion portals have focused on private label in the
casual wear category further driving the penetration of casual wear category. These online fashion portals
started with catering largely to the younger age audience, but it is increasingly finding accelerated and is
expected to be adopted by consumer cohorts across all age groups.
Online western wear market is dominated by men which is similar to the trend witnessed in overall fashion
category.

Exhibit 3.31: Online Apparel Market Mix – Overall & Player Wise FY 2020
33% 34% 31% 30% 31%

59%
7% 7% 8% 9%
2%
61% 70%
60% 59% 60%
39%
Overall Industry Am Fp Aj My LR
Horizontal Marketplace Vertical Aggregators Western Wear Innerwear Ethnic Wear
Men contribute 60 percent of share in online western wear market compared to 50 percent of share in
overall online apparel market.
Exhibit 3.32: Online Western Wear Mix – Overall & Player Wise FY 2020
5% 5% 3% 10% 7% 5%
28% 27% 25%
35%
40% 41%
67% 70% 70%

60% 52%
50%
Overall Industry Am Fp Aj My LR
Horizontal Marketplace Vertical Aggregators Mens Womens Kids

Omnichannel Play
In order to provide seamless experience to customers across channels, coupled with the need of enhanced
digital customer behaviour, brick & mortar retailers and ecommerce players are adopting omni-channel
retailing approach to provide,
• enhanced customer experience
• personalized marketing & promotion
• higher brand loyalty

3.5 COVID-19’s Impact
The COVID 19 epidemic has had a major impact on overall business and consumer sentiment in the
country. With the strict lockdown enforced by the government, the retail industry has been greatly
impacted and has seen a massive dip in sales in the short term.
The consumer sentiment is cautious at present and it is expected that the consumers are expected to tone
down their discretionary spends as compared to essentials, which is likely to impact the apparel category
in the short term and thus a skewed demand towards impulse & casual wear. Consumers are expected to
engage more with the basket of casual categories such as t-shirts, tops, casual shirts and active wear.
While the consumers are eager to get back to the retail environment, in the new scenario we expect that
they will seek more value in everything they purchase. Value attributes tend to extend beyond just price
for the consumer, such as consumer would now expect that clothes and that serve dual purposes of work
from home and occasional trips to office. Consumers will actively seek enhanced value attributes in formal
wear and work wear. Also, one of the points that many reports have been highlighting is that while there
is decrease in footfall, there has been increase in probability of purchase and increase in ticket size.
The sudden lockdown not only impacted their sales but also disrupted the supply chain at the backend.
However, as India comes out of this strong lockdown there are already initiatives by retailers to restore
the supply chain. In light of the supply and demand constrictions, brands and retailers are working
together to put in place an integrated demand supply planning framework. Additionally, brands are
expected to experiment with newer strategies to reach out to customers such as mobile commerce as
well as direct to consumer model to boost their business. Given that the customers are expected to prefer
online channel in the short term, this event could also fasten the adoption of omnichannel strategy among
many brick & mortar retailers. On the other end, the retailers are also gearing up to grab the post
lockdown opportunity when the market opens up to a new normal by working towards making the store
environment safe & hygiene for customers. In the post COVID scenario, organized retailers will emerge
stronger as safety and hence trust emerges a strong currency. The ability of leading organized players to
lead and define standard policies, procedures and process for store re-opening and continued operations
will be a significant advantage. We believe given the initiatives taken by retailer and stakeholders in the
supply chain as well as customer’s willingness to come return to the retail environment, we believe that
this situation is a blip and the expect the normalcy to return back to over time.
In the post COVID era, where the customers are expected to seek more convenience and experience, the
rate of adoption of omnichannel strategy among the lifestyle fashion players is expected to increase.
Brands will, over time, adopt the hyperlocal model to optimise last mile fulfilment metrics of cost, time,
inventory turns and logistics. In the initial phases of adoption, fulfilment is expected to happen from
marketplaces, online as well as offline. Whilst the immediate access and availability issue will be solved
through horizontal marketplaces, legacy lifestyle brands will capitalize on trust, salience, exclusive brand
(EBO) store format, wide penetrated network over the mid and long term. Consumers strongly attribute
trust, experience and service with organized formats, especially exclusive brand formats and large
format. These formats have not ceded preference even in post COVID times as consumers are eager to
re-engage with these formats.

Another strategy that is expected to see increased adoption is social commerce, wherein brands engage
directly with consumers to sell their products. Some of the benefits that this approach presents is it allows
brands to directly engage with the customers which can further be leveraged for category launch, curated
assortment, SKU variants, promotions and trials. It also aids in shopper analytics and targeted marketing
to customer. In the COVID scenario especially during the lockdown where the traditional channels were
completely disrupted, this channel helped brands connect faster with their customers. Select brands such
as Bata, Fossil, Wildcraft are already leveraging this model and directly engaging with customers.

4
Competition Benchmarking

4 Competition Benchmarking
4.1 General Information
Exhibit 4.1: Year of Launch of Key Apparel Brands in India
# Company Brand Year of Launch
Central 2004
1 Future Lifestyle
Brand Factory 2006
Arrow 1993
USPA 2011
2 Arvind Lifestyle
CK 2008
GAP 2015
Colourplus 1993
3 Raymond (Branded Apparel) Park Avenue 1986
Parx 2007
4 Indian Terrain Fashions Indian Terrain 2000
5 Monte Carlo Fashions Limited Monte Carlo 1984
6 Credo Brands Mufti 1998
7 Fabindia Overseas Fabindia 1976
8 Biba Apparels BIBA 2004
AND 1999
9 House of Anita Dongre
Global Desi 2007
W 2002
10 TCNS Clothing
Aurelia 2011
11 Benetton India United Colours of Benetton 1982
12 Sports & Leisure Apparel Lacoste 1993
13 Kewal Kiran Clothing Limited Kewal Kiran 1989
Jockey 1996
14 Page Industries
Speedo 2011
15 Inditex Trent Retail India Pvt. Ltd. Zara India 2010
16 Trent Ltd. Westside 1998
17 V-Mart Retail V-Mart 2002
19 Shoppers Stop Shoppers Stop 1991
20 Reliance Trends Reliance Trends 2008
Source: Annual Reports, Secondary Research, Wazir Analysis

4.2 Store Related Information
Exhibit 4.2: Total Number of Stores (EBOs) - Public Companies
# Company Brand As of March, 2020
Central 40
1 Future Lifestyle
Brand Factory 107
Arrow 290
USPA 368
2 Arvind Lifestyle
CK 67
GAP 15
The Raymond Shop 872
3 Raymond (Branded Apparel) Made to Measure 75
Branded EBOs 403
4 Indian Terrain Fashions Indian Terrain 161
5 Monte Carlo Fashions Limited Monte Carlo 230
K-Lounge 203
Killer
6 Kewal Kiran Clothing Limited Lawman Pg3
126
Integriti
Lawman Pg3+ Integriti
Jockey 620
7 Page Industries
Speedo 42
8 V-Mart V-Mart 218
9 Shoppers Stop Shoppers Stop 90
10 Trent Westside 147
11 Reliance Trends Reliance Trends 557
Source: Annual Reports, Secondary Research
Exhibit 4.3: Total Number of Stores (EBOs) – Private Companies

# Company Brand As of March, 2020
1 Credo Brands Mufti 300
2 Fabindia Overseas Fabindia 298
3 Biba Apparels BIBA 278
4 House of Anita Dongre Global Desi 142
5 TCNS Clothing W 304
6 Benetton India United Colors of Benetton 106
7 Inditex Trent Retail Zara India 21
8 H&M India H&M 40
Source: Company Website, Secondary Research

Exhibit 4.4: Store Distribution by city type for Western Wear Brands (as of March 2020)
Raymond 32% 20% 31% 13% 4% 1350
Arvind Brands 24% 24% 30% 19% 3% 1523
ABFRL 10% 17% 24% 25% 23% 2253
Jack & Jones 18% 22% 28% 21% 11% 94
H&M 30% 40% 10% 20% 40
ZARA 43% 29% 10% 19% 21
GAP 27% 47% 7% 20% 15
Pepe 9% 20% 16% 32% 22% 237
Spykar 23% 13% 22% 29% 25% 263
Indian Terrain 17% 23% 27% 25% 8% 161
Jockey 9% 28% 24% 21% 18% 620
Kewal Kiran Brands 4% 4% 29% 31% 32% 529
Levis 17% 18% 21% 20% 24% 393
Top 2 Cities Top 6 cities Tier 1 Tier 2 Tier 3
Source: Wazir Advisors

Exhibit 4.5: Store Distribution by City Type for Large Format Stores (as of May 2020)
Shoppers Stop 20% 34% 19% 26% 1% 90
Lifestyle 17% 31% 22% 27% 3% 77
Pantaloons 14% 25% 21% 20% 20% 357
FBB 24% 29% 27% 13% 7% 61
Central 20% 38% 23% 18% 3% 40
Westside 15% 23% 18% 25% 19% 147
Max 10% 33% 16% 28% 13% 264
Reliance Trends 10% 23% 26% 30% 11% 557
V-Mart 1% 20% 19% 58% 218

2%

Exhibit 4.6: Store Distribution by City Type for Ethnic Wear Brands (Private Companies)
(as of March 2020)
Fab India 25% 27% 12% 20% 16% 292
Global Desi 28% 26% 17% 18% 11% 142
BIBA 19% 24% 19% 27% 12% 278
W 19% 23% 18% 25% 15% 304

4.3 Revenue Benchmarking
Exhibit 4.7: Revenue of Players – Public Companies (INR Cr)
Revenue Revenue Revenue Revenue Growth Growth
# Name of Player (INR Cr) (INR Cr) (INR Cr) (INR Cr) (FY 12-FY (FY 17-FY
FY 12 FY 15 FY 17 FY 19 17) 19)
Future Lifestyle
1 NA 3,134 3,877 5,728 - 21.5%
Fashions
Arvind Lifestyle
2 1,314 2,361 2,898 4,644 17.10% 26.6%
(Arvind Fashion Ltd)
Aditya Birla Fashion
3 - - - 8,118 - -
Retail Limited
Raymond Limited
4 759 1,011 1,270 1,706 10.80% 15.9%
(Branded Apparel)
Indian Terrain
5 141 290 403 422 23.40% 2.4%
Fashions Limited
Monte Carlo Fashions
6 372 583 584 656 9.40% 6.0%
Limited
Page Industries
7 683 1,543 2,132 2,852 25.60% 15.7%
Limited
8 V-Mart Retail Limited 282 722 1,005 1,434 28.90% 19.5%
9 Shoppers Stop Limited 1,948 3,042 3,678 3,481 13.60% -2.7%
Trent Limited
10 819 1,358 1,738 2,532 16.20% 20.7%
(Westside)
11 Reliance Trends 489 1,940 3,714 - 50.00% -
Source: Annual Reports, Secondary Research, Wazir Analysis
Exhibit 4.8: Revenue of Players – Private Companies (INR Cr)

Revenue Revenue Revenue Revenue Growth Growth
# Name of Player (INR Cr) (INR Cr) (INR Cr) (INR Cr) (FY 12-FY (FY 17-FY
FY 12 FY 15 FY 17 FY 19 17) 19)
Credo Brands
1 Marketing Pvt Ltd 235 329 370 395 9.50% 3.2%
(Mufti)
Fabindia Overseas
2 485 757 1,038 1,121 16.40% 3.9%
Private Limited
BIBA Apparels Private
3 173 378 457 - 21.40% -
Limited
House of Anita Dongre
4 119 324 441 - 30.0% -
(AND & Global Desi)
TCNS Clothing (W &
5 127 329 713 - 41.3% -
Aurelia)
Benetton India Private
6 430 719 699 - 10.2% -
Ltd (UCB)
Sports and Leisure
47 96 101 - 16.7% -
7 Apparel Ltd (Lacoste)
8 Zara India 260 721 1,023 - 31.5% -
Source: MCA Reports, Secondary Research, Wazir Analysis

Pakhi Saxena
Retail & CPG: Business Director & Head
+91 9971666404
pakhi.saxena@wazir.in
Wazir Advisors Pvt. Ltd

3rd Floor, Building #115, Sector 44,
Gurgaon - 122 002 Haryana, India
Tel: +91 124 4590 300

Date: 15/06/2020
To
The Board of Directors

Aditya Birla Fashion and Retail Limited
Piramal Agastya Corporate Park
Building ‘A’, 4th and 5th Floor, Unit No. 401, 403, 501, 502
L.B.S. Road, Kurla, Mumbai - 400 070
Dear Ma’am/Sir
Re: Proposed rights issue of equity shares (“Equity Shares”) by Aditya Birla Fashion and Retail Limited
(“Company”, and such issuance, the “Issue”).
With reference to the captioned matter, we Wazir Advisors Private Limited, 3rd Floor, Building 115, Sector
40, Gurugram-122002, Haryana,hereby accord our no-objection and our consent to our name, our report
India Fashion Market dated 14/06/2020 (the “Report”) and its contents , in whole or in part or any extract
thereof, being included in any documents issued by the Company in connection with the Issue, including
the Letter of Offer and Abridged Letter of Offer intended to be filed by the Company with the Securities
and Exchange Board of India (“SEBI”) and the stock exchanges where the Equity Shares of the Company are
listed (the “Stock Exchanges”), and in any publicity or other materials, presentations or press releases or
media releases prepared by the Company or its advisers (“Issue Documents”).
This letter does not impose any obligation on the Company or the Lead Managers or advisers to include in
any Issue Documents all or any part of the information with respect to which consent for disclosure is being
granted pursuant to this letter.
We further confirm that we have, wherever required, obtained requisite consent that may be required
from any governmental authority or other person in relation to any information used by us in our report
India Fashion Market published on 14/06/2020. We also authorize you to deliver this letter of consent to
SEBI, the stock exchanges or any other governmental or statutory or regulatory authority as may be
required.
As per our records and information submitted by the Company, we confirm that we are not related to the
Company, its directors or promoters, or the Lead Manager(s) as stated in Annexure 1, in any manner.
Further, we authorize you to include the Report as a “Material Contract and Document for Inspection” in
the Issue Documents, as required and make the Report available for inspection in accordance with
applicable law and have no objection with you sharing the report with any regulatory or judicial authority
as required by law or regulation in relation to the offer or pursuant to a request/order passed by any
authority.
We further confirm that the above information in relation to us is true, correct, adequate and not
misleading in any material respect and without omission of any matter that is likely to mislead, and
adequate to enable investors to make a well informed decision.
Registered & Corporate Office: Wazir Advisors Private Limited, 3rd Floor, Building 115, Sector-44, Institutional Area,
Gurgaon-122002, National Capital Region, India: +91 124 4590300 I F: +91 1244590333 I www.wazir.in,
Corporate Identity Number: U67190HR2008PTC080898
We further confirm that as on the date of this letter, neither the Company, its directors nor its promoters
are related parties of Wazir Advisors Private Limited.
We represent that our execution, delivery and performance of this consent have been duly authorised by
all necessary actions (corporate or otherwise).
We agree to keep the information regarding the Issue strictly confidential.
This letter can be relied on by you, the lead manager appointed in relation to the Issue and the legal advisor
to the Issue. We authorise you to deliver this letter of consent to SEBI, the Stock Exchange(s) and any other
regulatory or statutory authority as required.
Yours faithfully,
For and on behalf of Wazir Advisors Private Limited

harminder Digitally signed by
harminder sahni
sahni Date: 2020.06.15

12:15:09 +05'30'
Authorised Signatory
Name: Harminder Sahni, Managing Director, Wazir Advisors Private Limited
Date: June 13, 2020
Cc:
ICICI Securities Limited

ICICI Centre
H.T. Parekh Marg, Churchgate
Mumbai - 400 020.
SBI Capital Markets Limited

202, Maker Tower ‘E’,
Cuffe Parade,
Mumbai 400 005
Maharashtra, India
Axis Capital Limited

1st Floor, Axis House,
C-2 Wadia International Centre,
P. B. Marg, Worli, Mumbai 400 025
BNP Paribas
BNP Paribas House, 1-North Avenue
Maker Maxity, Bandra Kurla Complex Bandra
(E), Mumbai 400 051
CLSA India Private Limited

8/F Dalamal House
Nariman Point
Mumbai 400 021
Khaitan & Co
One Indiabulls Centre
10th and 13th Floor, Tower 1
841, Senapati Bapat Marg
Mumbai 400 013
Cyril Amarchand Mangaldas

5th Floor, Peninsula Chambers
Peninsula Corporate Park
Ganpatrao Kadam Marg
Lower Parel
Mumbai 400 013
Encl: Annexure 1

India's Growing Fashion Market

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India's Growing Fashion Market

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India Fashion Market

Private and Confidential

India Fashion Market 1

India Fashion Market 2

Exhibit 1.1: GDP Ranking of Key Global Economies (2018)

Exhibit 1.2: Total Private Final Consumption Expenditure (USD bn)

India Fashion Market 3

1.3 Key Growth Drivers

India Fashion Market 4

1960 1970 1980 1990 2000 2010 2018

Source: World Bank

Growing Middle Class

Exhibit 1.5: Household Annual Earning Details

Exhibit 1.6: Indian Household Size and Growth Trend

India Fashion Market 5

Exhibit 1.7: Increasing Urbanisation

2000 2005 2010 2015 2018 2025P

Source: Secondary Research

High Share of Urban Retail

Exhibit 1.8: Share of Urban and Rural in Overall Retail

52% 50% 45%

48% 50% 55%

2012 2018 2025P

Source: Wazir Analysis

India Fashion Market 6

Indian Retail Market

India Fashion Market 7

Exhibit 2.1: Share of various Categories in Overall Indian Retail Basket

India Fashion Market 8

Source: Wazir Analysis

India Fashion Market 9

Indian Fashion Market

India Fashion Market 10

Exhibit 3.1: Indian Fashion Market (USD Bn)

FY 2015 FY 2018 FY 2020E FY 2025P

Source: Wazir Analysis

FY 2012 FY 2018 FY 2020E FY 2025P

Branded Apparel Organised Apparel

Source: Wazir Analysis

India Fashion Market 11

3.2 Western Wear & Ethnic Wear Mix

35% 32% 31% 28%

65% 68% 69% 72%

FY 2015 FY 2018 FY 2020E FY 2025P

Western Wear Ethnic Wear

Source: Wazir Analysis

FY 2015 FY 2018 FY 2020E FY 2025P

Source: Wazir Analysis

India Fashion Market 12

26% 26% 26% 26%

58% 57% 56% 55%

FY 2015 FY 2018 FY 2020E FY 2025P

Mens Womens Kids

Source: Wazir Analysis

43% 40% 47% 45%

57% 60% 53% 55%

Source: Wazir Analysis

India Fashion Market 13

Men's Western Wear Women's Western Wear

Casual Formal Casual Formal

Source: Wazir Analysis

India Fashion Market 14