India should allow FDI for Setting of Mega Shopping Malls or Not ?

More and more foreign companies trying to set up mega stores in India. This will definitely help our economy but there are drawback which affect common people leaving in India.

Central commerce and industry department not willing to give permission for it. If multi branded stores affect small business and farmers.

Instead of this india Govt will try to increase Import and Export of product and services to other countries which generate more foreign currency and make rupee strong in global market.

What is Your view on FDI?

FDI in India
FDI in India

Drawing crowds for Online Shopping

As important as it is to increase footfall at a store, achieving a high conversion ratio is a completely different challenge altogether. For industries such as the fashion apparel retail, multi-brand apparel retail and single brand garment retail, the challenge of converting footfall is even more complex. Let us look at some commonly applied mechanisms to enhance footfall and then strategies to enhance conversion:

Hoardings – Strategically placed advertisements can be a great crowd puller;

Connectivity – It is vital to choose a location that has great connectivity and ample parking space;

Branding – While apparel retailers prefer a niche appeal, the trick is to create an exclusive brand image that invokes curiosity, not just among the target audience;

Visibility – An indispensable aspect of marketing for the retailer, great store visibility boosts footfall significantly—consulting landscaping experts or architects often help;

Customer experience – The modern day customer does not tolerate delays or rude behaviour at stores. till date, the most effective marketing strategy in business. Implemented meticulously, such solutions can boost sales, enhance visibility and help retailers analyse the consumer base and footfall.

A thorough understanding of the demographic and local tastes, as mentioned earlier, can also help achieve a higher conversion ratio for retailers.

Online Shopping
Online Shopping

Conversion strategies for Small Business

For your eyes only

Visual appeal in the apparel industry makes a big impact on the footfall as well as the conversion ratio. For example, an apparel store with mannequins donning their latest collection has a greater chance of people walking into them than their counterparts with a mere sign and adaptability of these players. The jungle law of survival of the fittest however, still applies in these markets and, going by the resistance that some of these emerging economies offered to FDI in retail, it is evident that a lot is left to diplomacy and chance.

Simply Put

In spite of the challenges, the emerging economies provide the ultimate opportunity for brands to tap the rapidly growing and dynamic markets. Adopting strategies that ensure a longlasting and fruitful run is therefore mandatory to cope with the regional diversity in such economies. Looking at players that have made a mark over the last decade, it is evident that their adaptability, customisation and region-specific marketing strategies have been their greatest strengths.

For local players, the markets are still ripe with opportunities globalisation brought about. Footfalls will increase over time and so will consumption; however it is only the players equipped with footfall conversion strategies, superior customer relationship management techniques and quality brand management policies that will hold the reins to the market in the long run.

Online Saree Shopping in India
Online Saree Shopping in India

strategies

While the techniques mentioned may improve footfall at a store or a shopping mall, converting them into buyers involves a more comprehensive strategy that delves deep into customer psyche. Well-groomed sales executives, ample retail space for movement and accessible store displays often induce a desire to shop from a store. As more and more companies opt for CRM (customer relationship marketing) solutions and as the options in the market are increasing, with the introduction of cloud computing and SaaS options in the CRM space, retailers today have a variety of solutions to choose from, for management of their customer data. With these advanced systems, retailers can have access to actionable, stat-based and concrete data that facilitates faster business decisions. Access to customer data that is effectively segregated, real-time data sharing and multi-channel usage options make today’s CRMs an absolute necessity for retailers. These solutions can help identify issues in the marketing strategy as well as constantly keep a tab on costs for companies, thereby helping retailers identify, target and eventually manage customers better. A customer, who enjoys a pleasant retail and after- sales service experience, has a higher chance of recommending the store to a friend/relative, even if the product is at par with the rest of the market. This can have a direct impact on footfall conversion as word-of-mouth remains.

Western influence on Indian Apparel Market

As the emerging markets become globalised, the retail landscape undergoes a gradual transformation. Global giants enter these markets with a bang, set new trends, innovate, consolidate and eventually dominate. The success stories of brands such as Adidas, Nike, Fila and Reebok in the sportswear segment, bear testimony to this fact. Fortunately however, the impact on the domestic industry is rather positive as these players learn from the giants, enhance their models and continue selling. It is the size and dynamism of these markets that accommodate both these categories of retailers and therefore, competition increases at a rate that is slower than the rate of innovation

Western Brands
Western Brands

Ramp to store – The journey of art and commerce

Designers are a whimsical lot. While some of their ramp hits turn out to be bestsellers and trendsetters, a number of them cannot make it to the stores due to their non-commercial designs.
In spite of this, retailers across the globe latch on to successful designers irrespective of the last time their designs were a retail success. While some call it the love of art, retail businesses know well that the benefits are not just confined within the limits of money.

Art versus commerce While high fashion may not care for the retail community, ramp hits that can make it big at the stores are what drive the fashion apparel industry forward. Fashion as an art form, can never be ignored and neither can its commercial importance be overlooked. For apparel retailers, a deep insight into the fashion industry can be a massive value addition to business, as it can often help predict change of preferences in the market.
For example, a new bridal wear collection launched by a famous fashion designer is likely to have a strong influence on the bridal fashions of the season ahead. Similarly, a fashion house releasing a brand new neckline design will have replicas flooding the flea markets and other small apparel stores. By no means does such replication hamper the designer’s reputation or bank balance and should in fact, be considered an advantage, as the design is likely to stay in the market longer due to the mass appeal.

Sona Mahapatra at ramp to promote handloom garments.
Sona Mahapatra at ramp to promote handloom garments.

Similarly, high fashion cannot be ignored due to its ability to influence great minds, set trends and take the industry forward. Unique and sometimes shocking as they are, high fashion has little commercial appeal, yet the hype around it makes its importance in fashion quite obvious.

APPAREL EXPORT SECTOR IN INDIA

The ambitious target of USD 50 billion by 2015 for the apparel export sector set by the government bears testimony to the massive potential of the sector. In spite of export growth slowing in recent months due to turbulence in the European and US markets, the Indian government has revealed that the sector is in line to achieve the USD 18 billion target for the present fiscal. The incentives provided to the sector over the last decade also make it clear that the sector has emerged as one of the most important segments for export.

Indian's Textiles Export
Indian’s Textiles Export

Apparel export quite naturally assumes massive importance in india as the country is one of the largest producers of raw materials required for apparel manufacturing. From cotton to artificial materials, India’s cheap labour and low production costs makes it one of the most favoured manufacturing destinations in the world for clothing materials.

Investment insights for the textile industry in India

The textile sector in India is one of the most important manufacturing industries which not just employs a large number of people but also supports several others sectors. Consequently, the investment potential in the sector is equally high. However, it is important to keep in mind that a large number of players in the sector belong to the micro and small enterprise category and a larger section of industry is still unorganized. While some credit the unorganized sector as the binding force and the saving grace at the time of crisis of the industry, there are obvious roadblocks created by this sector when it comes to organized investment.

According to the Department of Industrial Policy and Promotion, FDI worth USD 959 million entered the sector in the 2000-2011 period. In fact, over the last two decades several government initiatives have been taken to enhance the flow of investment in the textile industry. Setting up of an FDI cell in the Economic Division was one such initiative and the prospects of signing an FTA with EU was another major boost. However since the latter has been pushed back to the next quarter and FDI flow has been sporadic due to the slow recovery of the European and American markets, the textile industry similar to other manufacturing industries in India faces a significant shortfall in terms of investment.

Investment challenges

Investment, be it domestic or foreign, needs the right direction, the right intention and the right implementation. Though major textile manufacturers are of international standards and can make good use of the investment, it is often the lack of supporting infrastructure that causes leakage of capital. While it works to India’s advantage that is the largest producer of cotton in the world, it also hurts that it has one of the poorest supply end infrastructure and wastage of raw material is a very common problem. Similarly, red-tapism, corruption and misuse of funds are also not unknown in the sector and the tendencies often make foreign investors shy away from investing in India.

Domestic investment in the textile industry has mainly come from the investments large corporations have made towards the setting up of their plants. Schemes such as the TUFS have worked well in the favour of these organizations. However for the SME sector, investment in plant and machinery is often a challenge as lenders are wary of investing in this sector. This makes the middle spectrum of textile industry a rather volatile part which has immense potential and yet remains below par.

For the smaller players, it is far smarter to trade than to manufacture those who have taken the hassle to produce also ensure that a large part of their business comes from the unorganized sector. This tendency, often makes the textile industry appear like a loss making and struggling sector while the reality may often be far from it.

Indian Textile Industry
Indian Textile Industry

The industries

A closer look at the organized and unorganized sector allows us to classify sub-sectors in the textile industries.

ORGANISED INDUSTRIES UNORGANISED INDUSTRIES
Composite mills Hosiery and knitting units
Combing units Power-loom units
Worsted and non-worsted spinning units Hand-made carpets and druggets units
Knitwear and woven garment units Independent dyeing and process houses
Machine-made carpet manufacturing units

 

The organized sector has the maximum potential to draw domestic as well as foreign investment in India. The mills and other manufacturing and processing industry boast of state-of-the-art technology and highly skilled labour force. This is mainly because of the international exposure and almost consistent success that these players have enjoyed over the years.

In spite of the positives of the organized textile sector, there remain basic challenges for new players keen to enter the industry. Current players who dominate the Indian market can further be divided into foreign and domestic categories.

INDIAN COMPANIES INTERNATIONAL PLAYERS
SRF Johnson & Johnson
Entremonde Polycoaters Du Pont
Kusumgarh Corporates Procter & Gamble
Supreme Nonwovens 3M
Garware Wall Ropes SKAPs
Century Enka Kimberly Clark
Techfab India
Ahlstrom
Pacific Non Woven
Vardhman
Unimin

 

Market scope

 There is a debate in the industry whether textile manufacturing is an industry worth investing in or entering in the present market. While the traditional businesses in the category may have its fair share of challenges due to the dwindling of exports, it is worth noting that certain sections of the technical textile industry have performed phenomenally. Interestingly, this industry has a niche B2B appeal and finds a rapidly growing demand in the global market.

Logically, supporting the technical textile at this hour of crisis for the overall textile industry is likely to be an intelligent move as the sector holds the potential to pull through the entire industry. The sector also requires significant investment in R&D and technology which can provide long-term benefits to the industry on the whole.

Apart from this, the American market looks set to recover sooner than expected and hopefully the European market will follow. The recently announced debt restructuring package for the loss making textile mills and the Handloom Revival, Reform and Restructuring package by the Government of India are also likely to bring back the lost glory of the Indian textile industry.

Reports indicate that the signing of the FTA with the EU is a highly anticipated move by the government and the delay is hurting the industry significantly. However, it is expected that investment and business interaction trends are likely to shift towards the Asian and domestic markets in the years ahead due to their rapidly growing size and evolving nature.

 

Gains

 According to recent statements to the media by Indian textile minister Anand Sharma, there have been no losses reported by the textile industry since the debt restructuring and a robust 7.9% growth in total spun yarn and 4.7% growth in total fabric production took place in the April-September 2012 period over the corresponding period last year.

On another positive note, the two major cotton producing states, Gujarat and Maharashtra have been significantly upbeat about their new textile policies. The new policy allows the states to set up and export from processing units within their state instead of depending on other states like Karnataka for the processing. The two states are also hopeful of attracting more manufacturers to set up plants as the two new policies provide various capital incentives for the players in some of the regions.

The Gujarat government has also made its intentions of targeting the higher end of the Asian market. Reports indicate that the government is confident that the new policy will make the state an attractive investment option for companies in China, Japan and Hong Kong.

 

Roundup

 The process of bringing in FDI into the textile sector may ease up as the states bring about their investment friendly textile policies. However, supporting the handloom and the micro and small units in the textile industry should take higher priority for the government as it is the largest and most influential sector that remains oblivious and deprived of the various schemes, incentives and advantages being provided to the industry. Aiding this sector and bringing in more players from the unorganized side to the organized category will also help improve revenue for the government and open the market up further for investment.

Published in the Apparel Magazine (CMAI)

Non woven fabrics

Non woven fabrics are referred to those materials that consist of long fibres bonded together by mechanical, chemical or thermal treatment. Typically a part of the technical textile industry, non woven materials are gradually finding their use in other applications.

As the term suggests, non woven materials do not require weaving or knitting and also provide a scope for using recyclable raw materials. In fact, there are several non-woven materials that can be recycled themselves. This makes them a rather eco-friendly alternative to woven artificial materials.

High competition in the textile manufacturing industry has increased the demand for non-woven fabrics. From pillows and cushions to packaging, these materials are gaining popularity by the day.

In India, non-woven materials are gaining new grounds every day as sectors such as healthcare and hospitality begin to find new uses. A textile manufacturing and exporting unit based out of West Bengal, “We have seen phenomenal response for our non-woven materials in recent years and this is thanks to the growing awareness about the environment as well as sustainable manufacturing practices. Interestingly, nonwovens have made significant headways into home textile manufacturing and most players today are looking for safer and more efficient alternatives to woven fabrics. If we take into consideration the time, machinery and cost involved in manufacturing woven materials, nonwovens help reduce some of the aspects significantly.”

Non Woven Fabric
Non Woven Fabric

One major advantage of nonwovens is that the manufacturing process decides the absorbency, resilience, liquid repellence, softness, strength and other physical characteristics. This makes the engineered fabrics open to a world of new possibilities and innovation.

If we take a closer look at how the clothing manufacturing industry is poised presently, we notice that there is a massive scope for new age materials to make a mark. This is mainly because the growing raw material costs and the shortage of skilled labour have disturbed the demand-supply balance. Today the gap between technical and non-technical textile has blurred almost completely. The accessorizing trend along with a growing awareness about environment and life cycle of clothes has a brought about a change of perspective among designers, manufacturers and retailers alike.

Synthetic fibres replicating natural ones like silk and cotton have been around for a long time. However, the new age materials needs much more than just the same texture. The current global demand is for materials that are light, resilient, chemically safe and cost effective. Nonwovens qualify as a new age material irrespective of the fact that it has been around for a long time. This is because the nonwovens are finding their use in products where woven materials traditionally dominate

The technical side

 Before we delve deeper into the manufacturing process of nonwoven materials it is important to understand the basic behind the formation of the material. In all three forms of bonding of the fibres- thermal, mechanical or with adhesive, the fibres are arranged in the form of a mesh or in the form of a sheet.

REICOFIL machinery is one of the most popular technologies used in the manufacturing of nonwoven materials. Based on the manufacturing process nonwovens can be classified into the following categories:

  • Staple nonwovens
  • Spunlaid nonwovens
  • Air-laid paper

The manufacturing processes for each these are unique and so are the properties of the material.

As discussed earlier, nonwovens allow significantly more flexibility in terms of determining the physical properties of the material. Tweaks in the manufacturing processes and sometimes different machines are used in production of these materials.

Indian scenario

In India, nonwovens continue to be looked at as a technical textile that only has application at factories. However, home textiles made from nonwoven material have been significantly popular in urban India, thereby bringing the material closer to the customer. It is a matter of time before nonwoven materials carve a niche in the commercial textile market.

Published in the Apparel Magazine (CMAI)

Massive potential of the small scale textile manufacturing industry

The small scale industry forms the backbone of the Indian economy. The textile manufacturing sector, which is an integral part of the Indian manufacturing industry, is a good example of an industry that relies heavily on its small scale units. While the government has time and again promised wholehearted support to the sector, challenges remain in the market that impede its holistic growth.

In fact, the cottage industry itself has undergone a massive transformation over the decades thanks to the advent of new technology that has increased productivity of these units and also made them more efficient. In today’s hyper connected world, the cottage industry has a higher potential than a full fledged textile production unit if technology is leveraged effectively and scales are considered.

Before we look at challenges, let us look at some unique features of the textile cottage industry in India and identify areas that have the maximum potential.

The charkha

The charkha is an iconic symbol of the Indian cottage industry. It had an indisputable role during our freedom struggle and even today the symbol of Mahatma Gandhi sitting evokes a self sufficient and independent industry.

Ideal of spinning cotton and other fine short staple fibres, the charkha was used extensively during the early part of the 20th with more advanced machinery. This manually operated spinning wheel however set a benchmark in the industry in terms of sustainable home based production that forms the foundation of the massive small scale sector in India.

Current scenario:

Today the cottage industry has come a long way in terms of specialisation. The internet has facilitated several small scale units to connect on a global or national B2B network. This positive impact has in fact allowed small players to gain specific specialisations and realise the true worth of their uniqueness.

Ecommerce has also been a major driving force in the industry in the last 4-5 years. Online retailers today are bringing to the limelight not just local producers but also providing a platform for the small scale manufacturing units to sell directly to their customers.

With small units required to produce more and produce quickly, several new innovations are coming to the forefront through them. In fact, the digital age is witnessing a serious surge of home-based businesses in the textile industry with simplified and effective business models.

Challenges

In spite of the growing nature of the small scale textile manufacturing industry challenges plague the sector. Firstly, it is important to understand the basic challenges that most small scale industries have- their unorganised nature. While the government has been keen to bring in more players under the tax net and consequently get more players into the organised sector, traditional businesses continue to follow traditional methodologies and thereby obstructing the flow of domestic and foreign investment in the sector. century in India to produce cloth. Gradually however the manual mechanism was replaced.

Textile Industry of India
Textile Industry of India

According to Sudhakar Sahoo, founder of Odisha Saree Store, an online retail store that provides a platform for micro handloom and other small textile manufacturing units across Odisha to reach out to customers across the globe, “There aren’t enough schemes in place for the weavers. In fact, my travels across the state of Odisha have revealed that there exists fake organisations that register weavers and pocket the government’s money released through the schemes. The weavers in fact benefit the least and work the hardest.”

Traditional handloom also faces some modern day challenges in terms of design. A lot of village based producers of textile and clothing may be unaware of design, pattern and fabric trends in the existing market. Mr Sahoo says, “There is a need for a design revival in the handloom market. The units need to align their designs with the choices and fashion of the modern generation.”

Technology and automation challenges

Over the years, the small scale textile manufacturing industry in India has struggled to bring in effective technology due to various factors the biggest of which is capital. Things are however changing with certain small units with niche specialisations leveraging state of the art technologies to produce on a larger scale with a smaller infrastructure.

According to Sumit Mall, director at Times Fiberfill, a leading manufacturer and exporter of technical textile and home furnishings in Eastern India, the distribution of automated units in the country is uneven. “Micro and small units have to rapidly automate their processes in order to compete with the large global entities entering the market today. Unfortunately the progress is highly localised in the western and southern parts of the country where the support services for maintenance, transportation and manpower are advanced. Eastern India also has its advantages in the form of availability of water. This makes it an ideal place for the manufacture of fabrics.”

Traditional businesses often struggle to bring in technology due to capital shortage. However a large number of business owners in the sector, being educationally backward often fail to understand the importance of new technologies and new methodologies in modern business and continue to perform below their actual potential. The first step to make them accept this technology is for the government to break these invisible barriers of traditional businesses.

Into the future

With new innovations and a lot of capital going into R&D, the textile industry will witness new fabrics, new designs and new concepts and the more they permeate the small scale industry the faster will be their growth rate. The government will need to build more B2B and B2C platforms so that small and micro players get the right exposure and the right price for their unique products.

While ecommerce has propelled the small scale textile industry to an extent, the need of the hour is for the government to collaborate with mid and small sized players in order to leverage the talent, the artistry and skills of the local weavers across the country. The tremendous diversity of the industry and its regional variation in terms of designs, style, patterns and colours provides an incredible opportunity for distributors, retailers and marketers to make India the hub of textile innovation and production.

Published in the Apparel Magazine (CMAI)

Where culture meets design: A look at Odisha’s rich handloom heritage, the challenges and future outlook

For a country as diversified as India, it is obvious that each state has its own culture that reflects heavily on the designs and patterns emerging from it. Odisha, is no exception. Its rich cultural diversity, values, motifs and local talents reflects extensively on its popular products in the textile industry. Locals will tell you that Odisha is quickly emerging as the hub for fabrics, apparel designs and handloom.  The handloom sector in Odisha arguably is one of the largest employers in the state. Odiya artisans are known to possess skills and artistry that has been inherited unhampered for generations.

The Odisha government has been an active participant in the efforts to nurture this incredibly high potential cottage industry. With 4 percent of the population of the state dependant on the sector and the demand for products on the rise, the state has a massive responsibility of making the sector lucrative for newcomers while at the same time developing the infrastructure to support the existing talent. According to the Odisha Government’s Handlooms, Textiles and Handicrafts Department there are around 1.19 lakh looms in the state of which 88186 have been brought under the cooperative fold. During 8th & 9th five-year plan the Directorate of Textiles also introduced several schemes to improve the condition of the sector.

The potential

According to the government website, production potential for the various textile products emerging from Odisha is the following:

Type Region Looms Production potential (In lakhs) INR
Silk Tie-dye, Silk and Cotton Bomkai Boudh, Sonepur 6773 4063.8
Khandua Silk Saree Cuttack 2255 1217.7
Cotton tie-dye Saree and Furnishing Bargarh, Sonepur, Bolangir and Nuapada 8045 3816.6
Tasar thana saree and furnishing Bargarh, Jajpur, Balasore, Nuapatna 2424 1163.52
Berhampur Silk Saree Joda Ganjam 609 292.32
Single count fine cotton Saree Jagatsinghpur 2234 804.24
Medium variety cotton Jajpur, Khurda, Bargarh, Bolangir, Ganjam and Nayagarh 5563 2003.47
Course variety cotton Bolangir, Cuttack, Khurda, Kendrapara, Nayagarh, Puri, Nuapara,Kalahandi, Kandhamal, Balasore, Bhadrak & Sambalpur, Sonepur 17220 5166
Nuapatna - Handloom Heritage
Nuapatna – Handloom Heritage

The unorganised sector

While the organised textile manufacturing and handloom sector in Odisha soars to new heights each year, there looms some serious dark clouds over the unorganised segment of the cottage industry. However, we interviewed few handloom owners and found out what they were doing, the challenges they faced and their future outlook about the industry. Here is a brief extract from our travels across the state:

Interview 1

Name: Madan Mohan Patra,

Age: 70

Profession: Weaver, designer, owner

Products: Cotton and Silk Saree

Speciality: Using skin friendly dyes and fabrics

Madan Mohan Patra, in spite of his age, has a modern approach in his production.  He owns a small loom where he produces cotton and silk sarees. His biggest interest is studying modern designs and he has been introducing constant changes to his products to keep up with the current styles. He also ensures that he shares his insights with his group weavers and is therefore an influential weaver in his locality.

He explains that the biggest challenge for his weavers is the lack of infrastructure to increase production. A larger space to work would translate into more innovation higher production. The working conditions have a great scope for improvement in terms of hygiene and safety. Mr Patra also ads that the nature of their work forces weavers to sit in one place for long hours. This causes health problems including eye disorders. He explains that the process of mixing acid with colours during the colouring stage is also a dangerous process. However with exposure to modern ideas, the weavers have been able to ensure better safety with the help of gloves and masks now available locally. Among other challenges, Mr Patra says that the rising price of silk is making it difficult for the weavers to afford the material.

In terms of future outlook, Mr Patra feels that there needs to be more support to the small scale handloom sector from the government, the local communities and also the master weavers.

 

Interview 2

Name: Somnath Patra

Age: 40

Profession: Designer and Master Weaver

Somnath is a popular local designer and master weaver in Odisha who has worked with both unorganised and organised players in the textile sector. His work also involves selling in bulk, sarees that he procures from local weavers. He explains that one of the biggest challenges in the small scale sector in Odisha is the lack of infrastructure for quality machine printing. He also says that filing patents has to be made more accessible for the local weavers and designers. He adds that the day the village weaver can file for patents is when the weaving and handloom sector in Odisha will truly take off. He also says that it is difficult to raise the price of the products though the price of raw materials has been constantly increasing

While business is not the same all year round, festivals such as Durga Puja, Sabitri and Raja festivals spell good sales for the weavers and handloom owners, according to Somnath.

Industry outlook

Digging deeper into the handloom sector in the state, we find a very contrasting picture where on one hand, traditional handloom owners want to adopt to modern techniques and infrastructure while globally there remains a constant demand for the traditional patterns and authentic embroideries. Interestingly, some of the weavers we interviewed did not want their next generation to pursue the business and instead wanted them to be doctors and engineers.

With the government taking steps to bring in more and more players into the tax net and thereby pulling them into the organised sector, it will ideally require a mix of nurturing the traditions and shaping them for the future. There is not a bleak outlook in the industry but when one compares it to traditional small scale industries of European countries or even some parts of Western India, we find ourselves wondering whether we are doing justice, as a nation, to the massive talent of Odiya weavers.

Published in the Apparel Magazine (CMAI)