Denim to see exponential growth in Indian garments market

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According to Aamir Akhtar, CEO of Denim (Lifestyle Fabrics) at Arvind Mills, the denim industry is growing at a compound annual growth rate of 13 to 15 per cent.

Denims in India is expected to see exponential growth in the coming years, even as the overall growth in the apparel industry is slowing down.

According to Aamir Akhtar, CEO of Denim (Lifestyle Fabrics) at Arvind Mills, which is one of the largest denim producers in the world, the denim industry is growing at a compound annual growth rate (CAGR) of 13 to 15 per cent.

A couple of years ago, the apparel industry in this country had a healthy growth rate at 12-15 per cent. Now it is down to 3-5 per cent.

Coming back to growth of denims, India’s production rose to 1.2 billion meters in 2015. “Historically, denim has been one of the fastest-growing apparel fabric segments, having grown by 500 million meters, from 700 million meters in 2010 to 1.2 billion in 2015,” said PR Roy, chairman of Diagonal Consulting in India, at at a two-day summit on Denims: A Democracy in Fashion in Ahmedabad, Gujarat, India.

He noted the country’s denim capacity is far higher than current production. “There is a gap of another 300 million metres in India… It’s a question of tapping the resources that already exist,” he added.

Diagonal Consulting in India had organised the conference, in collaboration with the Confederation of Indian Textile Industry.

While India has been one of the major global suppliers of denim fabrics, the country’s denim segment’s current export market still falls far behind its domestic market, which is 65 per cent of the total production. While most of the global brands outsource denim apparel work to Indian players, most of it is again meant for the domestic market and not for exports.

According to recent estimates, denim, which makes up 35 per cent of the country’s total textile exports, is expected to rise to 45 per cent by 2020. The production capacity is also expected to rise to 1.5 billion meters by 2020. Its growth in the clothing market has also been more focussed on the domestic market.

According to Prashant Agarwal, Joint Managing Director of Wazir Advisors, a retail and management consulting firm, “The total denim capacity in the country is about 1.2 billion metres per annum, while the utilisation is around 900 million metres per annum, of which 250 million metres would be exports. However, denim apparel exports would roughly form around 50-60 million.”

However, in terms of denim apparel such as jeans, the domestic market still falls behind other competing nations, partly owing to the fact, as cited by J Berrye Worsham, president and chief executive officer of Cotton Incorporated, that only 32 per cent of people in India like to wear denims.

Meanwhile, Justin Coates, manager of market analysis at Cotton Inc, is of the opinion that the percentage of Indian consumers who enjoy wearing denim is highest among men (50 per cent), those between ages 15 and 24 (46 per cent), those living in Delhi (43 per cent), while people living in Bangalore (41 per cent).

Meanwhile on the global front, the denim jeans market is projected to grow at 8 per cent, up from $55 billion in 2015 to $59 billion in 2021. While the projected growth rate in Asia, including India hovers around 12 – 15 per cent, that for Latin America, North America and Europe is expected to be around 15 per cent, 10 per cent and 4 per cent, respectively in next six years.

It is estimated that close to 1.9 billion units of denim jeans were sold in the world in 2015 and by 2021 yearly sales of jeans will cross two billion units.

Sharing a recent study by Cotton Inc, J Berrye Worsham, president and chief executive officer of Cotton Incorporated, who was present at the conference, said 71 percent of people in Europe and Latin America enjoy wearing denim, followed by 70 percent in the U.S., 58 percent in China and 57 percent in Japan.

 “In the last seven years denim has really picked up,” said Nirav Shah, co-founder and partner of Diagonal Consulting, citing how Bollywood has led the trend for city folks to embrace it, leaving rural areas not far behind. “A lot of fabric goes to surrounding markets, and there is still a lot more export potential for denim, with Bangladesh, Vietnam and Cambodia taking a big leap into jeans production,” he said.

 

[SOURCE :-apparelresources]