The Indian retail market is fast becoming a favourable choice for the major fashion retailers. This is because the changing trends are making the Indian fashion retail market both interesting and lucrative. The country’s retail market is expected to grow 6% annually to reach US $ 865 billion by 2023. The fashion industry has undergone an intense transformation in the type and positioning of brands, formats, products with the emergence of new fashion players. The variety of fashion brands has taken a leap in all sub-categories such as apparels, footwear, bags, jewellery and accessories. Fashion retailers, now, are not only confined to metro cities but have started mushrooming in Tier II and III cities as well.

There are varied factors that attract the International fashion brands and fast-fashion retailers to this fastest growing economy in the world. Some of them are:

Young consumer base: Undoubtedly, fashion is primarily for young population and the Indian retail market provides the largest young consumer base for domestic as well as international fashion brands. In contrast to the increasing aged populations in the West, Japan, and even China, India will become the world’s youngest emerging economy by 2020. Around 64% of the population falls in the working group. The young consumers have fashion aspirations and they are ready to experiment with the modern designs. Further, the Indian fashion consumer is quite heterogeneous due to income disparities, the influence of ethnic clothing, and regional and religious preferences. To match the taste, choice and preferences of this group, fashion retailers offering great options to experiment with.

Retail-specific policies: Major impetus in the Indian fashion retail has been received by the liberalised retail policies by the Government, which has allowed 100% FDI in single-brand retail. This has allowed foreign players such as H&M and GAP to set up to their outlets in India to capitalise the growing consumption and market potential. Apart from this, the Government has also relaxed the mandatory local sourcing requirement of 30 per cent. The fashion players namely IKEA and H&M were looking for this opportunity for quite some time.

Apart from this, India’s improved ranking to 100 out of 190 in World Bank's 'Ease of Doing Business' will also boost FDI in the country.

Consumer buying behaviour: The changing behaviour of Indian consumers is the key contributor to the success and expansion of fast fashion majors here. Increasing time-poverty, growing brands consciousness, increasing acceptance of digital technology, exposure to international events and fashion icons, and rising confidence levels of the consumers have led to the evolution and growth of major retail hubs in India.

Alternative retail landscape: There has been an increase in alternate retail channels in India such as direct selling, home shopping networks and e-tailing. As a result, fashion brands have started looking at these options to tap the larger consumer base not only in metros and mini-metros but also in suburban markets of Tier II and III cities.

Author's Bio: 

Mayank Mohindra is an author on apparel, fashion, and textile industry.His articles are based on latest apparel industry news, textile news and/or analysis of the dynamics of global apparel trade, and fashion industry.