Retail boom to spur garment sector growth
Fuelled by a phenomenal retail boom, coupled with rising middle-class incomes, the domestic garment industry has hit a high growth trajectory, reports Samiran Saha.business Updated: Sep 06, 2007 00:33 IST
Fuelled by a phenomenal retail boom, coupled with rising middle-class incomes, the domestic garment industry has hit a high growth trajectory.
The Rs 22,000-crore domestic garment industry is set to grow anywhere in the range of 20 per cent to 25 per cent in the current financial year.
Analyst say the domestic garment sector is poised for a quantum leap, but point out that it will not be easy for exporters to switch to the domestic industry because of squeezing margins.
“The domestic garment-manufacturing market is very attractive with a 20 per cent growth projections. Several exporters are now planning a switch to the domestic market,” said S.N. Rangaiah, GM of India’s largest garment export house Gokaldas Exports.
The domestic industry will stabilise in the next three years and register a growth of around 30 per cent, he said, adding margins here were comparable to those in exports. The presence of big players in retail, he felt, will give a fillip to the domestic industry.
Chairman and managing director of Raymond Gautam Singhania said the opportunities in the domestic garment retail sector are “irreversible”.
“The quantum of just the women’s wear segment is Rs 2,700 crore of which casual wear accounts for nearly Rs 800 crore. That is a huge segment that we are keen to capture,” Singhania said.
Andy Riggs, global brand manager of Lee Cooper, said: “We expect the domestic garment industry to grow at 15-20 per cent, which is huge.”
However, Vishesh Manaktala of a Delhi-based garment export house said: “The domestic market is very price conscious and margins are low.”
Karunesh Vohra, CEO of Bangalore’s Munch Design Workshop agrees. “Exporters will recuperate with time, but switching to the domestic sector will not be simple as margins in both businesses are different,” Vohra said.