group project swot analysis current trends total apparel market in rs ... facilities for textile...

GROUP PROJECT

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Industry: Readymade ApparelsCompany: Babyoye

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A

a) Industry Analysis

b) External Environment Scanning

c) Current Trends

PART – A

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INDIAN APPAREL MARKET

COMPETITION ANALYSIS

ENVIRONMENT ANALYSIS

DISTRIBUTION & SWOT ANALYSIS

CURRENT TRENDS

TOTAL APPAREL MARKET IN RS(CR) MARKET COMPONENTS - CAGR

MEN’S APPAREL MARKET IN RS(CR) WOMEN’S APPAREL MARKET IN RS(CR)

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CURRENT TRENDS

CURRENT SCENARIO OF SALES CONSUMER BEHAVIOUR

41%

40%

10%

9%

Womenswear

Menswear

Kidswear-boys

Kidswear-girls

By 2020, women’s wear would reach 43% compared to 37% of menswear

• Second biggest industry after the IT Industry

• Textile sector contributes 14% to industrial production and 4% to GDP

• Growth Drivers: cultural diversity, income level, media, growth of the working class, raise in wages, spending power, increase in usage of digital devices,increase in access to internet and higher penetration of smart phones

• E-Commerce: ease of access, attractive discounts, lot of varieties, price comparison, and easy return policies heavily attract the consumers to purchase apparels online.

• Now instant purchases – comparison from all other sites, COD, heavy discounting, return policies, convenience etc.

• Result – people willing to experiment with new trends, make purchases all year round, aspirational(branded vs. non branded), increased competition and foreign players, more quality control at backend

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CURRENT TRENDS

• Highly fragmented: presence of numerous players

• Broad Classification: Men, Women, Kids & Unisex wear

• Better technology usage leads to better quality products

• ‘Need based’ to ‘Experience based’

• Market is estimated around 2 lac crorewith unorganized sector accounting for more than half of the market

• Branding & sub-branding

• Offering quality standards in variety: material, stitching etc.

• Highly dynamic market with frequently changing demand & trends

• Driven by a buoyant economy and increasing purchasing power

Category Some Key Brands

Formal Wear Allen Solly, Arrow, Cambridge, Colour Plus, Louis Philippe, Peter England

Casual Wear Lee, Flying Machine, Parx, Weekender, Benetton, Pepe

Kids Wear Lee, Ruf ‘n’ Tuf, Wear-house, Weekender, Gini&Jony Ltd, Lilliput

Ladies WearNike, Reebok, Vogue, Levi Strauss, Lee, Freelook, Black Berry, Biba,

KEY HIGHLIGHTS

Aditya Birla Group 1.70

PVH Corp 1.50

Private Label 1.20

Arvind Ltd 0.50

Inditex, Industria de DiseñoTextil SA 0.50

Jockey International Inc 0.50

Rupa& Co 0.50

Benetton Group SpA 0.40

Celebrity Fashions Pvt Ltd 0.40

Future Group 0.40

Levi Strauss & Co 0.40

Raymond Ltd 0.30

J G Hosiery Pvt Ltd 0.30

KewalKiran Clothing Ltd 0.30

Lux Hosiery Industries Ltd 0.30

Others 87.9

*Source: http://www.portal.euromonitor.com/portal/statistics/tab6





CURRENT TRENDS

TOP LEADING PLAYERS (WITH MARKET SHARE %) :- 2015

• Dominated by the unorganized retailsector (others in above table = 88%)

• According to United Nations Industrial Development Organization, there are 13 SME clusters of readymade garments

• Among the 13 clusters Tamil Nadu, Maharashtra and NCR region lead the chart in terms of annual turnover

• In terms of exports Madhya Pradesh, Maharashtra, Andhra Pradesh, Gujarat and Delhi are leading from the front

• Cluster development initiatives by Government to strengthen SMEs and provide them with economy of scale, bargaining power, networking opportunities and competiveness

- technical assistance

- subsidies for technology upgradation

- marketing support 7





CURRENT TRENDS

UNORGANIZED SECTOR & SME LIMITATIONS OF SMEs

• 65% of the merchandise is sold at a discounted rate because of intense competition from the leading brand and their discounting policy has made SMEs difficult to operate

• Limited capacity restriction, SMEs cannot operate beyond a certain level

• Inadequate logistics & improper supply chain managements creates huge problems for the smaller players

• Supply chain management becomes complex as smaller players are forced to extend their reach geographically for advertising & brand building

• Stress on producing volumes has increased due to increasing demand

• Smaller players need to inject in more investments to sustain existence

• India stands at second position in Global Textiles Exports as per the recent data released by ‘UN Comtrade’

• Govt. policy of diversification of market and product base helped India venture into the newer markets

• India’s textiles exports to the world are US$ 40.2 billion.

• India’s growth is phenomenal as Global textiles growth rate is only 4.7% compared to India that is 23%

• Total global textiles exports are of US$ 774 billion with India commanding 5.5% of the share

• Apparel exports from India accounts for 3.7% of share in the global readymade garment exports.

• Increase in share of the Textiles Exports from India largely attributed to the growth in the Apparel and Clothing sector, accounts for 43% of the share alone

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CURRENT TRENDS

EXPORTS & IMPORTS





CURRENT TRENDS

POLITICAL

ECONOMIC

SOCIAL

TECHNOLOGICAL

ENVIRONMENTAL

LEGAL

PESTEL FRAMEWORK FOR ANALYSIS FROM MACRO ENVIRONMENT LEVEL





CURRENT TRENDS


POLITICAL ECONOMICAL SOCIO-CULTURAL

• Excise duty made mandatory since 2011

• Fiscal tax structure rationalised

• Custom duties have brought down

• Schemes like Market Linked Focus Product Scheme, Duty Free Import AuthorisationScheme, Duty Drawback Scheme have been implemented

• Allocation of 200 cr for setting up mega textile clusters

• Rising domestic consumption as well as export demand

• Expected to reach Rs1,034,000 crores with CAGR of 11% by 2020

• Organised retailing is expected to grow upto 24% by 2020 (5%now)

• Scheme like 100% FDI in textiles, skill development and setting up of Integrated Textiles Parks (SITP) implemented

• Cheap-skilled labor, abundance of raw materials, high young population and slow down of Chinese economy

• Readymade apparels purchase with increase in the disposable income

• Fashion and style preferences of consumer in global sphere are linked

• Increase in spending in clothing sector due to demographic dividend

• Growth in working women and fashion consciousness boosted the apparel industry recently





CURRENT TRENDS


TECHNOLOGICAL ENVIRONMENTAL LEGAL

• Setting up of Technology Upgradation Fund Scheme (TUFS)

• Evolution of online marketplace

• Proposed concessional customs duty list of 5 per cent for buying major machineries for production of technical textiles

• Boost in investments because of Make in India

• Apparel companies manufacturing clothes as per environmental standards

• Popularity of ‘eco-label” products

• Government regulation have increased in textile industries

• Government norms to reduce carbon footprint gained popularity

• National textile Policy formulated to keep a check on availability and procurement of raw materials.

• The Textile Undertakings Act, 1995 aims to provide all the relevant facilities for textile industry to utilize its full potential and achieve growth target

• Rigid and archaic labour laws still pose challenge

PORTER’S FIVE FORCES FOR ANALYSIS FROM INDUSTRY LEVEL





CURRENT TRENDS





CURRENT TRENDS

PORTER’S FIVE FORCES

Threat of New Entrants

• Economies of scale• Access to

distribution channel

• Cultural diversity• Geographical

proximity • Government

regulation

Bargaining power of suppliers

• Less threat from fragmented and independent small suppliers

• More threat from large suppliers posing threat of forward integration

Bargaining power of buyers

• Large retailers source from multiple suppliers

• Bulk orders preferred by retailers

• Backward integration by large retailers possible to have more control over production





CURRENT TRENDS

PORTER’S FIVE FORCES

Threat of Substitutes

• Custom made clothing emerging as new substitute

• Majority of Indian customers prefer tailor made clothes

• Lack of standard sizes act as reluctance to purchase readymade clothes

• Rise in purchasing power and convenience offered by readymade clothes offers less risk of substitutes

Intensity of Rivalry

• Presence of different retailers in this segment- Foreign and Domestic (Organized +Unorganized)

• Increasing presence of large retailers in malls and retail chains

• Small retailers acquiring franchisee agreements as well as including branding merchandise in their product portfolio

RETAILING IN INDIAN READYMADE APPARELS INDUSTRY

SPECIALISEDCHAINS

DEPARTMENT STORES

RETAILING DISCOUNTSTORES

FACTORY OUTLETS

OFF-PRICESTORES

E-TAILERS





CURRENT TRENDS

RETAILING IN INDIAN READYMADE APPARELS INDUSTRY

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Specialty retailers: They deal in specialized clothing and related merchandise from a singlecompany and are generally owned or franchised by the garment company. Example; WillsLifestyle, Koutons, Zara

Department stores: Large retailers having wide and deep range of assortments of garmentproducts and their variants, usually divided into departments based on product, service andcontrol wise differentiations, such as: Shoppers Stop, Globus and Westside

Full Line discount stores: These stores such as Big Bazaar and Vishal Mega Mart offer the mediumto low range branded products and assortments and use the value based pricing strategy

Off – price stores: they sell the off season products and the items garment companies aredumping due to overstocking

Factory outlets: Offer branded and designer products at much discounted rates

E-tailers: . They sell their products to the customers on a computer screen with a facility of homedelivery





CURRENT TRENDS

VARIOUS RETAILING FORMATS

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CURRENT TRENDS

SWOT ANALYSIS

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CURRENT TRENDS

SWOT ANALYSIS

• Indians are now more inclined to make the purchase for occasion- specific clothing rather than need based clothing. Festivals throughout the year acts as a powerful stimulant for the rising trend.

• Less preference for traditional shops- A higher variety in terms of size, price, designs, brands at a single place is one of the major cause why malls and e-shopping sites have

become more preferred outlets than the traditional outlet.

• Growth of organized retail and increasing presence of international brands- The organized apparel retail market is expected to comprise of $18 billion in 2018 which will be 28% of the overall apparel retail market. In 2014 international brands comprised 18 per cent of the organized retail market and this will go up to 25 per cent by 2018.

• Ready-to-wear(RTW) apparel have become more popular than the Ready to Stitch(RTS) apparels. In 2014, the RTS segment comprised 20% (US $8billion)of the total apparel market where as the RTW made up the rest of the market. The demand for RTS apparels is growing at a rate of 5.5% and the demand is mostly from tier I, II cities

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CURRENT TRENDS

CURRENT TRENDS IN APPAREL INDUSTRY

EXPECTED

• Opportunity for Indian entrepreneurs because of rising labor cost in Chinaand non-compliance of large number of factories in Bangladesh

• To capture space in market left by China and Bangladesh, Indian exporters need to be competitive in pricing apart from meeting strict timelines and assuring better quality delivery

• Overseas buyers looking Indian products as safe and reliable option for sourcing

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CURRENT TRENDS

TRENDS IN IMPORTS AND EXPORTS

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a) Existing distribution system of the companyb) Existing sales management system of the company c) How do the sales and management system

function in the company? d) Comparing sales and management of your chosen

company to its any competitore) Your suggestions for improving the channel

management of the company

PART – B

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BABYOYE DISTRIBUTION

SYSTEM

SALES MANAGEMENT

FUNCTIONINGCOMPETITOR-GINI

AND JONYSUGGESTIONS

• Procurement - Local vendors for Indian labels and Imports for international labels

in main hub Bhiwandi

• Total 125 stores in India – 95 are company owned , rest are franchisee

• Joined hands with Franchise India, Asia's leading retail and franchise solution

• Spread across more than 45 cities

• 3 company owned stores in MP, total planned 5

• Direct delivery to stores – No middleman involved, FedEx Logistics partner

• Stores inventory of the best selling products to last 15-20 days in its stores

• SCM software- IBM’s SAP software, with module Amigo and Ambi52

• Lean distribution system ensures less lead time

• Consignments shipped twice a week

MAIN HUB FRANCHISEE/OUTLET

• OFFLINE:

• Sales management - IBM’s BI software and the WonderSoft software

• Sales personnel ratio of 5:1 of men to women

• ACE– 24 days empathy training programme including15 days of software training

• Supernova Competition – Talent engagement and development program for

Supermoms and Superdads

• ONLINE:

• Delivers to 20,000 cities and towns in India

• 2 warehouses in New Delhi and Mumbai planning to set up a third in Bangalore.

• Just in time arrangement with its 80 distribution partners

• Delivery time is 3-5 days and its logistics partners include Bluedart and Aramex.

• Omni channel strategy 23


SYSTEM

SALES MANAGEMENT


AND JONYSUGGESTIONS

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SYSTEM

SALES AND MANAGEMENT


AND JONYSUGGESTIONS

REGIONAL SALES MANAGER

BUSINESS MANAGER

STORE MANAGER

CUSTOMER RELATIONSHIP

EXECUTIVES

QUALITY MANAGER

CATEGORY MANAGER

CENTRE OF RETAIL SERVICES

• Sales Management system : “Logic

Enterprise Sales”

• Stock replenished once in 15 days/ as per

the annual plan decided and is

completely done by the company at a

header level

• Franchise doesn’t order for stock unless

there is a stock out

• The annual stock delivery plan (to each

franchise outlet) decided by the

merchandising team at the company

based on previous sales and expected

future trends


SYSTEM


FUNCTIONINGCOMPETITOR –

GINI N JONYSUGGESTIONS

Logic enterprise

System

Achieved Sales

Sales Target for

store

Target for sales

people

Stock details

SALES MANAGEMENT SYSTEMS - GINI AND JONY

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Category Fixed Variable

Cat A 12,000 approx 700 - 3000

Cat B 10,000 approx 500 - 2000

Cat C 6,000 approx 320 - 1050

• Annual revision of targets

• Sales figures captured from the billing data and the stock details updated accordingly

• 2 end of season sales per year – One in January and one in august

• Margins for Franchise: 13% For discount sales, 18% for normal sales

• Sales force hired by franchise and salary also paid by franchise

• Salary – 2 components : Fixed and Variable; Variable component considering 90% - 120%

achievement

• Here, category decided based on seniority, experience etc


SYSTEM




• Inventory controllers should do frequent review of loss and damage information

with the corporate office

• Better co ordination between buying-mechandising –front end .Appropriate

discounts and discontinue slow movers

• Better understanding of demand styles at the merchandiser level

• Better streamlining of supply chain flow

SUGGESTIONS FOR IMPROVEMENT


SYSTEM




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GALLERY

group project swot analysis current trends total apparel market in rs ... facilities for textile...

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