Having witnessed an explosion in the Indian mid-segment apparel market during the pandemic, several brands also tweaked their models to fit in.
By Reya Mehrotra
When fashion designer Ritu Kumar launched her sub-brand Aarké late last year, she heralded a new trend for the millennial woman—affordable designer wear. Her latest endeavour was also a foray into the mid-segment apparel market, making her offerings available to a larger section of consumers and beyond the metros.
“Aarké is the newest offering from Ritu Kumar, catering to women who dress with Indian aesthetics. It is rooted in tradition, yet captures the various moods of a multi-tasking urban woman,” reads the introduction to the brand.
The idea of offering a designer garment in the value segment may have been new for Kumar, who has been ruling the fashion world for over 50 years, but several homegrown ventures are already betting big on affordable, stylish clothing.
Earlier last year, omnichannel women’s fashion retailer High Street Essentials— which owns ethno-fusion brand Indya and western apparel brand FabAlley—raised Rs 25.5 crore through its existing investors after it raised Rs 20.75 crore in June 2020.
Launched in 2012 by Shivani Poddar and Tanvi Malik, the fashion house continued to grow and expand throughout the pandemic and forayed into personal and skin care segment. It also launched its daywear brand— Earthen by Indya—last year while strengthening its online portfolio, which accounts for 50% of its total business.
Another Indian e-commerce clothing brand Libas, which offers reasonably priced apparel and caters to the mid-segment market, scaled its business by opening its first physical stores in Delhi in September last year. It plans to have 200 more such set-ups by 2025.
The onset of the pandemic and the resultant toll on incomes and buying habits of consumers led to the rise of several small and mid-segment brands dealing in ethnic and fusion wear, western wear and lounge wear, among others, in the past few years. Aware of the untapped potential of the market, both established and new brands are curating affordable and unique clothing for the Indian women to experiment with and, thanks to the digital wave, are also finding takers.
Vocal for local
There is no dearth of high-end and luxury labels ranging across ethnic, fusion and western wear in India but being able to own a Manish Malhotra, Falguni Shane Peacock or a Ritu Kumar with the premium pricing remains a dream for many.
On the other hand, there are several western brands selling in India that offer affordable wear and therein lies the paradox. There is a demand for homegrown labels, but the local market remains out of reach owing to geographical barriers.
All that is changing now, thanks to digitalisation bridging the gap between local sellers and consumers.
Over the last decade, a number of mid-segment brands has emerged in India as e-commerce platforms became popular. The growth has been slow but steady. However, the pandemic ushered in an era of hyper digitalisation, which in turn opened gateways for online businesses and presented an opportunity for offline businesses to shift to online as well.
The consumer found a new confidence of purchasing from small and medium brands selling through the online mode. Several homegrown labels like Aachho, Libas, Rustorange, Indya, Bunaai, Koskii, Lavanya–The Label and Tjori started flooding the digital space and witnessed a spurt in the number of orders. What worked for these brands were the freshness of designs and variety and the affordability they provided.
Kreeva, an e-commerce Indian ethnic wear platform with a prime focus on India’s rich heritage, has been seeing a constant growth since its launch in 2020.
According to founder Manthan Dhameliya, the brand clocked a revenue of Rs 10 crore in 2020 and the figure went up to approximately Rs 25 crore the following year. While the pandemic adversely affected businesses initially, it opened doors for e-commerce brands like Kreeva to grow, says Dhameliya. The brand also witnessed an increase in the number products in carts per shopper during the pandemic.
Among the homegrown labels, fusion and ethnic categories are bestsellers. E-commerce platform Flipkart shares that 2021 saw an interest in fusion ethnic and affordable ethnic wear during the festive season. In the category, the men and women kurta segment, ethnic dresses and asymmetric / A-line kurtas continue to be popular choices. Amazon Fashion India, too, saw an uptick in the sales of local homegrown brands over the past few years, which has paved the way for more conscious, localised and eclectic brands in the country. “There was a surge in the demand for ethnic and fusion wear this festive season. A spike in demand was seen for salwar kameez and other ethnic and fusion wear such as saris and kurta sets for women as well as men,” adds Saurabh Srivastava, director and head of Amazon India Fashion.
Having witnessed an explosion in the Indian mid-segment apparel market during the pandemic, several brands also tweaked their models to fit in. Rustorange, an online contemporary wear women’s brand that is a brainchild of three friends—Samik Sarkar, Shashank Agnihotri and Kuvalaya Singh—was founded in 2016 but since 2020, the brand has seen a healthy growth. Co-founder Sarkar says they wanted to bring in unique designs at great prices. “Designer labels in India are very expensive. Even the cheapest designer piece would cost at least `10,000-15,000. So, we thought a digital brand that could work with minimal inventory would help us experiment before we mass manufactured.” All their designs are illustrated and voted on Instagram before launching to know consumer preference.
Sarkar also credits the millennial women in their 20s and 30s, who neither want to dress up like young adults nor willing to give in completely to ethnic, for the trend. “As per my research, there is demand for Indo-western clothing among women who want to distinguish themselves from the 21-year-olds and older women,” he says, adding: “What Manyavar, a men’s traditional wear brand, did to the groom’s fashion back then, Indian brands are doing it today to cater to the needs of contemporary Indian clothing at affordable ranges.
Initially, during the onset of the pandemic in 2020, Rustorange’s operations were shut but as the lockdowns were lifted in May 2020, orders started rushing in. “We did Rs 2 crore business in 2018, Rs 7 crore in 2019 and Rs 10 crore in 2020. In 2021, the brand saw business of Rs 24-25 crore,” he says adding that until 2019, coordinated salwar suit sets were popular but since 2020, dresses have picked up from their collection. Most of the fashion retailer’s business comes from its website and portals like Myntra and Nykaa Fashion, besides social media contributing in smaller parts.
Another e-commerce platform Etsy has several small and medium sellers selling directly to the customers. Kari by Kriti, available on Etsy, is Hyderabad-based Kriti Jindal’s brainchild. She shares that the last couple of years have seen a tremendous growth in small businesses that are leaning towards sustainability, ethically sourced, organic, and handmade products.
“With easy options like next-day shipping, clear return policies and cash on delivery, the Indian market has become much more open to experimenting with newer and smaller brands. People have become exceedingly supportive of small businesses,” she says.
Unfortunately, the sustainable fashion wave is yet to catch up in India, feels Delhi-based Payal Jaggi, who started Kinche by Payal, an upcycled clothing brand on Etsy, in 2014. As far as sustainability is concerned, fashion will be a last resort in India since festivals and weddings demand fast production and instant gratification, she says.
“All my kantha jackets are now upcycled and my phulkari chaddar jackets are getting a lot of attention. I believe that people in India have always experimented with fashion but unfortunately sustainability is not the first thing on everyone’s mind,” she adds.
The pandemic push
The digital shift was inevitable, but the pandemic hastened it. Initially slowed due to lockdowns, online businesses picked up quickly around mid-2020. In June 2020, the government’s announcement to ban Chinese online women’s fashion brand Shein further worked in favour of homegrown Indian brands as consumers looked for similar options at great prices.
In October 2021, the Confederation of Indian Industry (CII) and management consulting firm Kearney jointly released a report titled ‘Creating a competitive advantage for India in the global textile and apparel industry’. According to Neelesh Hundekari, partner and India head for textiles, apparel and lifestyle retail at Kearney, “Covid-19 has triggered the redistribution of global trade shares and a recalibration of sourcing patterns (‘China plus one’ sourcing), providing a golden opportunity for Indian textiles to stage a turnaround and regain a leadership position as a top exporting economy. We believe India’s textile industry should target 8% to 9% CAGR during 2019–2026, driven by domestic demand growth and significant growth in annual exports.”
The report also highlighted that achieving the $65-billion exports target up from $36 billion in 2019 will require India to carefully strategise actions in five key areas, including apparel, fabric, home textiles, man-made fibre and yarn and technical textiles.
Another report, ‘Textile Industry: Trends and Prospects’, released by Infomerics Valuation and Rating, a SEBI-registered and RBI-accredited financial services credit rating company, highlights that the Indian textile industry is on the road to recovery. The industry had slumped to $75 billion after peaking at $106 billion in FY2020. However, government initiatives have raised hopes for the sector to grow to $300 billion by 2025-26, a 300% growth in the next two years. As of now, the report suggests, the textiles and apparel (T&A) industry contributes 2.3% to the country’s GDP, 13% to industrial production and 12% to exports.
Digitisation during the pandemic also erased the need of the middlemen and brought the original creators to the fore. New and emerging marketplaces gave the creators the platform to sell directly. Local marketplaces thrived, such as Delhi-based Sowtex Network, a B2B sourcing platform for textile buyers and sellers that was founded in 2017. It offers 46 categories including fabrics, motifs, laces, badges, apparel machines, testing equipment, neck patches, and so on. Another such Noida-based platform Lal10, founded in 2017, an online wholesale marketplace for rural micro, small and medium enterprises (MSMEs) in India, helped sellers in categories like apparel, handbags and lampshades.
The platform also saw fundings by angel investors in 2020 and has helped form an alliance between artisans and weavers with labels like Anita Dongre, Toast, FabIndia, Zara, Wills Lifestyle, and so on.
Currently, the platform is helping thousands of artisans connect with retailers in India and other countries.
The ethnic rush
Where there’s a market, there’s a business opportunity. Several new and flourishing Indian labels are dealing in both Indian wear and fusion, with the latter being a growing favourite category among the Indian women. According to Technopak, India has a $20 billion ethnic wear market, of which 93% is women’s wear.
Observing a good consumer traction, e-commerce platforms like Myntra, Amazon, Flipkart and Nykaa Fashion (a multibrand e-commerce fashion offering by Nykaa launched in 2018) have launched several in-house ethnic wear labels. In August 2021, Nykaa Fashion launched its own ethnic wear label called Gajra Gang that presents a range of lehengas that twirl, tunics, saris and more. Adwaita Nayar, CEO of Nykaa Fashion, shares that its women’s wear brand Gajra Gang’s assortment and social media community strive to inspire as well as support women to fearlessly build the lives of their choice. Myntra, too, has several in-house ethnic labels launched to set foot in the competitive ethnic market. Myntra’s in-house labels include Anouk and House of Pataudi. The latter was launched in 2018.
Shopping lifestyle app Ajio, which is owned by Reliance Retail, specialises in several ethnic wear brands. In fact, it has a separate tab for local Indian wear collection called ‘Indie: The Artisan Store’ through which consumers can choose from a range of indie picks by local artisans and brands.
An online marketplace for local artisans and handcrafted products, Indie by AJIO includes ethnic wear in Ikat, Shibori, Banarasi, Bagh, Ajrakh to Jamdani, Tangail, Chanderi sourced from 50 Geographical Indication (GI) clusters in Rajasthan, Uttar Pradesh Gujarat, Odisha, Bihar, Jharkhand, Madhya Pradesh, Bihar, Telangana, Andhra Pradesh and West Bengal.
Small and regional labels have also seen an uptick on social media platforms and marketplaces like Instagram and Facebook marketplace, where they have started selling online.
International brands too have not shied away from an ethnic rush in recent times, observing a lucrative market. Swedish retailer H&M’s collaboration with designer Sabyasachi Mukherjee for their Indian collection was much talked about. Japanese brand Uniqlo introduced a special kurta collection in 2019. Raymond launched its Ethnix range last year.
In October last year, Reliance Brands Ltd (RBL) bought 40% stake in designer Manish Malhotra’s MM Styles. Later, its holding company Reliance Retail Ventures bought a major stake in Ritika, Ritu Kumar’s fashion house that sells semi-formal and bridal ethnic wear. Since 2019, Aditya Birla Fashion Retail Ltd (ABFRL), too, has bought stakes in ethnic wear brands like Jaypore, Sabyasachi Couture and Tarun Tahiliani.
In fact, brands like Louis Philippe and Peter England, which are also a part of ABFRL’s portfolio and sell western wear for men, announced new ethnic wear collections this festive season.
Commenting on the expanding ethnic market, Siddharth Bindra, Biba India’s managing director, says, “The share of e-commerce sales has gone up by 20-25% in the past 17-18 months. We expect online sales to go up to 30-35% in the next two to three years. We have sharpened our focus on e-commerce as it provides the convenience of contactless delivery. Apart from our own website, we have also expanded presence across marketplaces like Amazon and Myntra.”
