Imagine buying a pair of denims on equated monthly installment (EMI)?
In the face of stiff competition from non-denim quarters — trousers, chinos, cargos — denim brands including Levis, Lee, Wrangler and others are renewing efforts to scale up the low denim consumption in India.
In the pipeline are plans to ramp up retail presence, sell denims on EMIs or even sell non-denim apparel within stores to boost walk-ins.
As in the case with Levi’s, which recently started retailing multi-coloured smart-fit pants from its flagship stores.
“The opportunity in the Indian denim market is huge as it is currently dominated by smaller players,” said J Suresh, managing director and CEO at Arvind Lifestyle Brands Ltd and Arvind Retail.
Arvind Lifestyle, a flagship of the R3,500-crore Arvind Ltd, plans to aggressively scale up its Flying Machine brand, by opening 100 Flying Machine stores every year. The company currently has about 90 stores in India.
Besides, it is also looking to scale up the retail presence of its dozen other brands including Lee, Wrangler, US polo and Tommy Hilfiger, which are marketed in joint venture partnerships or licensing arrangements.
“We are betting on the premium range where the growth and margins are higher,” said Suresh.
While globally, denim is a $57-billion (R3,15,894-crore) industry growing at a compunded annual growth rate of 3-5%, the Indian market is quite small at R7,700 crore, according to consultancy firm Wazir Advisors (see graphic).
While an American owns an average of eight pairs of jeans, an Indian has just a fraction, at 0.35, with even a Chinese national ahead with one pair of jeans bought every year.
“The truth is that the market is over saturated,” said Sanjeev Mohanty, managing director, Benetton India.
“Most consumers buy new jeans (only) when their old jeans get worn out or do not fit anymore. As jeans fall in popularity, the growth of woven bottoms is growing,” Mohanty added.
It's not just Arvind that's seeing tough times. Levi Strauss India, the wholly-owned subsidiary of American denim firm Levi Strauss & Co, has new trends by introducing EMI schemes for buying a pair of jeans. It has also put a stop to expanding its low-cost denim brand Denizens and is focusing on the flagship Levi's franchisee.
“We are prioritising our efforts behind the Levi's brand in India. As per capita income grows, we believe consumers will spend more on lifestyle categories. This fact, coupled with the trend that office spaces are becoming more casual in their dress code, should translate into growth for the denim market,” the Levi Strauss spokesperson said in an email response.