Retailers ramp up ethnic wear bet to cash in on Rs 1.84- trillion pie

Some of the country’s top corporate houses, including Aditya Birla Fashion, Reliance Retail and Tata-owned Trent and Taneira (by Titan) are betting big on the Rs 1.84-trillion ethnic wear market in India. This week’s TCNS Clothing acquisition by Aditya Birla Fashion for Rs 1,650 crore for a 51% stake only reinforces this trend, say experts.

Ethnic wear is the largest apparel category in India at 30% (Rs 1.84 trillion) of the Rs 6.15-trillion domestic apparel market, according to Aditya Birla Fashion’s MD Ashish Dikshit. Ethnic or Indian wear includes everything from sarees to salwar-kameez, lehengas, kurtas, kurtis, anarkalis, sherwanis, bandhgalas, dhotis etc.

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While 80-85% of the ethnic wear market, according to experts, is dominated by the unorganised segment, the branded or organised end of the market at 15-20% (around Rs 28,000-37,000 crore in size) is growing at around 20% per annum now as consumers increasingly opt for Indian wear across occasions.

Within the organised ethnic wear market, 40% belongs to brands in the mid and value segment, 30% each by premium brands and super-premium & luxury brands, say experts.

As Jaydeep Shetty, a Mumbai-based retail expert and consultant, explains, “Office wear earlier for women would mean largely western wear, though sarees were also part of the wardrobe. Over time, the trend of wearing kurtas, kurtis and leggings for office and other occasions has increased, which has helped the ethnic wear market grow in the country, especially, in women’s wear.”

Brands such as W and Aurelia, both part of TCNS Clothing, and Biba have helped fuel growth in the women’s category while Manyavar from Vedant Fashions is driving the market on the men’s side, he says. Fab India, meanwhile, is a popular choice among both.

“We had no presence in ethnic wear till 2019. We now have a business which is around Rs 600-700 crore in size, which we want to scale up to Rs 5,000 crore in the next 3 years,” Dikshit said in an interview to FE this week after the TCNS acquisition.

The blueprint that Aditya Birla Fashion has put in place involves partnerships with designers such as Shantanu & Nikhil, Tarun Tahiliani, Sabyasachi and the House of Masaba at the luxury end of the market and acquisitions or organic launches at the premium, super-premium and mass end of the market.

So, besides TCNS Clothing now, which is into premium women’s ethnic wear, the company had acquired a premium and artisinal men’s brand called Jaypore earlier and launched brands such as Tasva and Marigold Lane to boost its presence in the category.

Rival Reliance Retail too has been stitching up a robust strategy in the last few years, tying up with designers Satya Paul, Raghavendra Rathore, Ritu Kumar, Anamika Khanna, Manish Malhotra, Rahul Mishra and Abraham & Thakore under subsidiary Reliance Brands. While at the mid and lower end of the market, it has been driving its presence up with in-house brands such as Avantra by Trends.

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Bharat Mehta, a Mumbai-based textile and retail entrepreneur, explains that Reliance Retail has been aggressively pushing its affordable ethnic wear range through its Reliance Trends stores as opposed to Aditya Birla Fashion which earlier depended on its Pantaloons chain to drive ethnic wear among its consumers.

“Aditya Birla Fashion has now turned its attention to a wider audience, while Reliance Retail has its eye firmly on the middle-class consumer with its Avantra range,” Mehta says.

Tata-owned Trent, last month, launched a new brand Samoh, which will compete with Reliance Retail and Aditya Birla Fashion in the ethnic wear space. Some experts say that it will have to accelerate its pace in the future.

Trent said Samoh will debut with its first-ever store in Lucknow in Hazratganj and will cater to people who appreciate luxurious and modern take on cherished designs and motifs from the Indian hinterland.

“Samoh’s range draws inspiration from traditional roots and blends it seamlessly with modern aesthetics. Samoh will undoubtedly provide a compelling touch of luxury and sophistication to our customers, while they shop for their special moments in life,” Noel Tata, chairman of Trent, said in a statement.

CK Venkataraman, MD, Titan, had said earlier that he wanted to make Taneira a popular brand in sarees much the way Tanishq was to watches. The company plans to take store count of Taneira to 125 outlets in the next few years from around 25-30 stores now and is looking to increase turnover of Taneira to Rs 1,000 crore from around Rs 250-300 crore now, said experts.