IntegratedApproach FabricGarmentRetailBranding

SunilO.Khandelwal ChiefFinancialOfficer May6,2011

BIGPicture GlobalTextileIndustry
2009 Global trade in textiles and clothing increased to US$ 510 bn from US$ 355 bn. in 2000 - CAGR of 4.63% 2020 Global trade expected to grow to US$ 1000 bn from US$ 510 bn in 2009 CAGR of 6.3%
Global Textile & Approval Trade
1200
1000

USDbn.

1000 U S $ in B illions 800

586

CAGR5%
529 612 510

800

Top Exporters
650

Amount US$ BN. 162 189 23 136 510

%
31.76% 37.06% 4.51% 26.67% 100.00%

600 400 200

500

Europe China

309

346

362 31 0 300 350

India Others

220

240

250

200

0 2006 2007 2008 2009 2015 (E) 2020 (E)

Total

Textile Years Apparel

Source: UNComtrade,OTEXA,Eurostat &Technopak Analysis

BIGPicture IndianTextileIndustry
220

80
Domestic Market Exports
11 % CAGR

134

70 46

78

45 140 89

23 16 30 2005 47 2009

26 52 2010 (E) 2015 (E)

Projections

2020 (E)

Source: Technopak

The domestic textile market in India is projected to grow from USD 52 bn. in 2010 to USD 140 bn. by 2020 at a CAGR of 10.5% The export market in textiles is projected to grow from USD 26 bn. in 2010 to USD 80 bn. by 2020 at a CAGR of 12% The total Indian Textile Industry is projected to grow from USD 78 bn. in 2010 to USD 220 bn. by 2020 at a CAGR of 11% In order to meet the additional estimated demand (US$ 150 bn) created for Textile and Apparel by 2020,investments to the tune of Rs.320,000 Crores (US$ 68 bn) across the Textile supply chain will be required. India has the potential to increase its export share in world trade from the current 4.50% to 8.00% by 2020. The high growth for Indian exports is possible due to increased sourcing shift from developed countries to Asia and Indias strengths as a suitable alternative to China for global buyers.

BIGPicture IndianApparelIndustry
2005
Apparel US$ 22bn INR Cr 1,01,000 Men US$ 10 bn. INR Cr 45700 Women US$ 8 bn. INR Cr 36000 Kids US$ 4 bn. INR Cr 19300

INTEGRATED TEXTILE SOLUTIONS

2009
Apparel US$ 33 bn INR cr 1,54,000 Men US$ 14 bn. INR Cr 66300 Women US$ 12.5 bn. INR Cr 57800 Kids US$ 6.5 bn. INR Cr 29900

2010(E)
Apparel US$ 36 bn INR cr 1,70,900 Men US$ 15 bn. INR Cr 72700 Women US$ 14 bn. INR Cr 65000 Kids US$ 7 bn. INR Cr 33200

2015(E)
Apparel US$ 61bn INR cr 2,88,800 Men US$ 24.5 bn. INR Cr 115800 Women US$ 25 bn. INR Cr 117000 Kids US$ 11.5 bn. INR Cr 56000

2020(E)
Apparel US$ 100bn INR cr 4,70,000 Men US$ 38 bn. INR Cr 176860 Women US$ 43 bn. INR Cr 202300 Kids US$ 19 bn. INR Cr 90840

The current domestic apparel market of US$ 22 bn is expected to grow @ 11% annually to reach US$ 100 bn by 2020 The main drivers of domestic growth are increasing population, increasing income levels, rapid urbanization, improving demographics, increased organized players and increasing penetration of retailers into smaller cities

BIGPictureIndianRetailIndustry
Particulars Total Retail (Rs. Crores) Organised Retail (Rs. Crores) Organised Retail Penetration (%) 2008-09 14,40,000 93,900 6.5% 2013-14 27,20,000 2,57,000 9.4% CAGR 13.5% 22.3%

RetailsectorinIndiagrewat10%14%CAGRbetween200405and200708on thebackdropoffavourable demographics,risingdisposableincomeand increasingurbanisation Organised retailgrewfasterat28%ledbynewentrants,lowpenetrationand largeexpansionsbyexistingplayers Goingforward,Indianretailisexpectedtogrowat13.5%CAGRoverthenext5 yearsandalmostdoubletoRs.27,20,000cr.fromitsexisting14,40,000cr. Organised retailisexpectedtogrowfasterat22.3%increaseitsshareinretailto 9.4%by2014fromtheexisting6.5%
5 Source:Crisil Research

BIGPicture ApparelRetail

Apparelretailhasthehighestshareofabout35%intheoverall organised retailmarket Currentestimatedsizeoftheorganised apparelretailmarketisaboutRs. 35000crores Theshareoforganised retailisgrowingrapidlyanditwouldbe40%ofthe totalapparelretailby2020

Source:Technopak Analysis
6

Rising Incomes: Per capita Income (US$)

(Urban Percentage of Total Population)

Rapid Urbanization

CAGR: 10%

Source:RBI

Source:Census

(Urban Population across Age Groups)

40 35

Dropping Dependency Ratio

30 25 20

DependencyRatio

Source:UN

Median Age: 26

Median Age: 29

Unlike any other top-10 economy (including China), India will have the lowest median age and the trend will be even more pronounced by 2020 as most other populations age even more rapidly This population is more aspirational and aware and with higher spending power and will consume more number of categories than their parents Source: Technopak Analysis

Fabrics for Fashion

Wovens andKnits

Fabric Manufacturing Strategy

Marketing, Design and constant endeavor on Product Development

Research and Development

Innovation Across the Value Chain

Vertical Integration

Global sized plants

NeedofthedayforFabricmanufacturers
Speedierexecutionyetbeingcosteffective

Innovation
Processes Products Brands Channels

Understandtheneedsandconcernsof RMGmanufacturersandalignyourself accordingly

11

Fabricforfashion
Indiasfabricproductionis55000mn.Sq.mtrs. ItisincreasingataCAGRofabout3%inthelast3 years 5%ofthefabricproducedisexportedandis growingat14%CAGR About22%ofythe fabricproductionisknitted fabricgrowingataCAGRof5% About55%ofthefabricproductionisnoncotton Tomeetestimateddemandadditional50bn.Sq. mtr.Ofwovenfabric(1.4lakh looms)and76bn. Sq.mtr.Ofknittedfabric(1.4lakh machines)

Garments
Currentlymens wearisthebiggestsegmentofthe marketwithestimatedmarketsizeof73000crores ShirtsandTrousersformsalmost50%ofthemens segment.Highgrowthcategoriesinmenmarketinclude activewear,Tshirts,Innerwearandshirts Womenwearisgrowingfasterthanotherapparel segmentandestimatedatabout65000crores Sarees andsalwar kameez formalmost60%ofthe womens segment.Thehighgrowthcategoryinwomens segmentincludeinnerwear,topsandTshirtsandsarees andsalwar kameez Kidswearmarketisalsogrowingrapidlyand estimatedat 33000crores.Girlswearisgrowingrapidlyandthefast growingsegmentsareTshirts,bottomwearanduniforms

RetailStores
Retail is the most important chain in the clothing segment. A new and exciting store on the high street/mall should provide inspiration, choice & value and is relevant to shoppers in todays climate Product ranges should constantly change to offer styles that the customer expectson trend yet wearable, versatile yet different and above all incredible value Fashion, style & value are important - they want clothes that fit and makes them look good Equally important is the shopping environment Above all the customer is the heart of business and therefore approach everything from customers point of view and create a proposition to give them what they want .lots of new ideas, style and value to be brought in the brand

PopularStoreBrands

Product Brand

Branding
What is brand? Name, Sign, symbol intended to identify goods and services of one seller from another Branding is decommodification of a product Brand Identity Perspectives of Marketer Brand Image Perspective of Consumer

Brand proposition
Market Positioning Brand Personality Brand Attributes Brand Differentiator way Value, ideas, style Simple , confident, friendly Honest, ideas led, choice, quality Doesnt dictate Wear it your

Conclusion Domesticclothingconsumptionisgrowing
rapidlyandlikelytotouchUSD100bn.by2020 Organised retailisgrowingataCAGRof20%p.a. andwouldbe40%ofthetotalretailmarket Clothingretailismajorportionoforganised retail formingabout35% Indiantextileandclothingindustryneedstogear upforthisgrowthandexpandcapacities EstimatedinvestmentsforclothingaloneisUSD 40bn. TUFschemeshouldbecontinuedtill2020to promotethisinvestment

Integrationoffabrictoretailingandbrandingisinevitable forthegrowthoftheindustry

Conclusion
Fabricmanufacturershavetoproduceattherighttime, rightqualityandatrightprice Garmentmanufacturershavetokeepinpacewiththe latestfashiontrendsandproduceasperretail requirement Retailershavetoformstrategyandpositionthemselves tothetargetedaudience Brandbuildingistheorderoftheday Iindustry playersneedstofindouttheirownnicheand strengthandpositionattherightpartoftheintegration chain Corecompetencyandsimplicityofthebusinessmodel wouldbethesuccessmantra FinallyROCEtobethemaindriverforthebusiness

Thankyou LetsbuildtheIndianTextile Brand