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India’s e-commerce industry is flying high while being driven by increasing pan-India mobile phone adoption across all social and economic segments along social commerce retail giants like Amazon and Flipkart leading the bandwagon. The e-commerce market size is currently estimated at $75 billion in 2022 with the potential to grow to $111 billion by 2024 and $200 billion by 2026, at CAGR of 20-22 per cent.

India is currently becoming even more digitally savvy with new global technologies like 5G network and ONDC (Open Network for Digital Commerce), quick commerce and hyperlocal delivery across the country. Studies by some leading research companies like IBEF date of December 2022 and TRAI data shows the tremendous rise after the Covid years in e-commerce trade and the transition from feature phones to smartphones now considered a necessity rather than a luxury.

Amazon and Flipkart steal the show

The online retail market is currently estimated to be 25 per cent of the total organized retail market and is expected to reach 37 per cent by 2030 with Amazon and Flipkart holding around 60 per cent market share. Amazon India is the biggest preferred online destination for sellers and currently has over 10 lakh sellers on its e-commerce platform. The largest category on Amazon is the online smartphone channel with a 47 per cent market share. The marketplace offers 168 million products to Indian customers with over 4,000 products sold on Amazon per minute. It’s also a leader in most core product categories such as consumer electronics and is doing really well in Tier I cities having over 5 million Prime subscribers who get added benefits when they buy.

Following a close second is Flipkart, a marketplace, hosting 4.2 lakh sellers and including digital commerce entities such as Flipkart, Myntra, Flipkart Wholesale, Flipkart Health+, Shopsy and Cleartrip. The Flipkart Group led the online Diwali festive sale with around 62 per cent share in terms of GMV followed by Amazon with a GMV of around 26 per cent. Flipkart currently leads in the apparel vertical thanks to the acquisition of Myntra and has launched a social e-commerce ‘Shopsy’ app that empowers aspiring local entrepreneurs to set up online shops. To outdo its competitor, Flipkart increased its supply chain during the pandemic and is currently promoting free signups along with a loyalty programme that offers free delivery and early access to sales.

JioMart, Meesho join the bandwagon

Many others like Meesho, JioMart, Myntra and Nykaa now give stiff competition to this duopoly with each new platform having its own USP. Meesho is a social commerce/reseller platform where over 70 per cent customers are from Tier II, III cities who are usually housewives or fashion influencers who operate WhatsApp and Facebook groups, with hundreds of potential buyers looking for value for money options.

JioMart, that started as an online grocery store now sells almost all products. Unlike Amazon and Flipcart, it has a limited number of sellers as independent third parties. Most listings on JioMart are from Reliance's brands, and deliveries are dispatched from the 15,000 Reliance Retail stores across India.

Myntra is the online fashion arm of Flipkart and presently Tier-II markets contribute 40 per cent to its sales, especially during mega sale events. And Nykaa is a market leader in the online beauty and personal care market (BPC) operated by FSN E-Commerce Ventures. It offers delivery services to around 90 per cent pin codes across India. Indeed, with shoppers from Tier-II, III cities taking rapidly to online buying along with rising aspirational middle-class, the way ahead looks extremely promising for India's e-commerce landscape.

 

Munich Fabric Start Bluzone Closure

One of the world’s largest and most reputed textile industry shows, the three-day Munich Fabric Start that concluded on January 26 showcased multi-layered and complex new materials and presented the colour palette for Spring/Summer ’24. The show also discussed efficiency and transparency through digital transformation and steps towards full sustainability. The sub-show on denim, street wear and sportswear, the two-day Bluzone that concluded a day before also drew visitors from across the world. Over 14,000 visitors from 58 countries, especially from the DACH region, Benelux, Scandinavia, the UK and Turkey attended the multi-event exhibition.

The next edition of Munich Fabric Start and Bluzone exhibition will take place in July 2023 to present Autumn/Winter 2023-24 materials and trends. It will also continue the search for ultimate goal of sustainability through digitalized processes. Organized by the Munich Fabric Start Exhibitions GmbH, the show is of particular importance as it precedes the Paris and Milan international trade shows calendar and is useful for its research, sourcing contacts and information exchange within global traders and manufacturers.

Impressive list of industry attendance

The exhibition was attended by product managers of leading brands including About You, Adidas, Akris, Alberto, Allude, Best Secret, Bestseller, Betty Barclay, Bogner, Boss, Brax, C&A, among others. As Sebastian Klinder, Managing Director Munich Fabric Start commented, “Munich Fabric Start and Bluzone were well attended and we had two, respectively three days of intense conversations, game-changing business decisions, inspiration and innovation. Our conference program with over 90 top-class speakers was more extensive than ever before. The interest in new developments, especially in the areas of digitization and sustainability was extremely high and is now going much more into depth.” However, the just concluded exhibition saw 20 per cent less attendance than the show in January 2020 which is attributed to the still-cautious executive travel, particularly from Asia and economic tightness in many countries.

Speaking about the Bluzone, Francesca Polato, Berto Industria Tessile said, “The increasing number of fairs dedicated to the denim sector is clear testimony to the particular attention that the fashion business, and not only, is paying towards this sector. As for German business, Bluezone is definitely the most important exhibition. This show allows us to have the first real and tangible feedback on our work.”

Key highlights

Finding new aesthetics that are within the parameter of sustainability was discussed at great length as the industry feels strongly about not compromising on the aesthetics of fabrics which if not delivered would result in consumers not embracing sustainable fabrics in larger numbers. This was accepted as a challenge for the sector’s R&D units. As a spokesperson of Bluzone pointed out, denim experts Calik Denim, Iskur Denim, Kilim Denim and Tejidos Royo are working towards the goal of high-tech finishing solutions that are low on environmental impact. This is because of using sustainable dyeing methods, 0 per cent water and chemicals usage and the use of renewable energy sources.

Using technology to increase efficiency was another popular topic as the current and predicted market situation will continue to stress on decreasing production cost to reflect the mood of the retail sector and withstand recession and price inflation across goods and services. The EU Green Deal was also an important part of the three-day dialogues as the EU Strategy for Sustainable and Circular Textiles has started its implementation and manufacturers, exporters and importers are expected to comply.

  

Tirupur’s knitwear exports fell by some 19 per cent in the third quarter.

There was a contraction in demand in key markets such as the US and the European Union during the December 2022 quarter despite buying seasons such as Thanksgiving Day, Christmas, and New Year.

Though the order placement is gradually increasing, and January 2023 saw some increases, these are not promising and the declining trend is expected to continue in the fourth quarter. In dollar terms, knitwear exports from Tiruppur declined by ten per cent when compared with December 2021. Overall, knitwear exports from India fell two per cent during December 2022 as against December 2021.The declining trend for Tirupur exporters started in August 2022 as an impact of the Russian-Ukraine war. Tirupur accounts for about 55 per cent of knitwear exports from India.

High inflationary conditions and recessionary trends in key markets of the US and EU kept the textile and apparel demand subdued in 2022, especially the latter half. Volume growth in most markets remained in negative to nil zone, with market size increase happening due to higher product costs. These dwindling orders have caused some financial stress for exporters in Tirupur and the industry has requested for an increase in interest subvention.

  

Texworld Evolution will be held in France, February 6 to 8, 2023.

There will be 750 exhibitors from over 20 countries and the exhibition center will concentrate in one place most of the global sourcing for fashion brands, from ready-to-wear to luxury.

The event presents an opportunity for buyers to measure the new balance between the major international sourcing zones after the transformations related to the Covid crisis. There will be 220 Chinese companies, 122 Turkish manufacturers, 43 Korean companies and 45 Indian companies. Thai embroiderers and Indonesian manufacturers will also be visible. Africa will be represented by 270 companies. The African continent will also be represented with companies from Ethiopia and Ghana.

Several round tables and conferences will open debates on themes such as the contribution of Web3 in the fashion and clothing industry, secondhand markets, or ways to make a company sustainable without compromising its competitiveness. Other highlights will revolve around the issues raised by sustainable fashion and recyclability. A conference on the sourcing offer in Ghana will finally allow uncovering the industrial potential of this country.

The February edition also includes a revisited sustainable sourcing itinerary. This will bring together a hundred companies that have implemented CSR initiatives in an operational manner.

  

Ralph Lauren has launched a cashmere sweater that is certified Cradle to Cradle (C2C) Gold.

It is being made available under the men’s brand Purple Label and the women’s brand Collection and is the first of five C2C products planned by the company. It is woven from fine cashmere fibers, dyed in rich hues and featuring a transformed signature label cut from organic cotton. The sweater has gone through a multi-step certification process with the Cradle to Cradle Products Innovation Institute, a non-profit that has set the global standard for products that are safe, circular and made responsibly.

The kind of luxury Ralph Lauren stands for has always been about timelessness, authenticity and a life well-lived. Since the brand believes true luxury encompasses not only a product’s beauty and quality, but how it was made and how it will endure, it created the industry’s first C2C-certified luxury cashmere product.

As part of the C2C certification process, Ralph Lauren has also launched a recycling program for 100 per cent cashmere in partnership with Prato of Italy – a leading textile production company combining science and technology to create a circular economy manufacturing system for high-quality wool and cashmere. The program, initially available in North America and Europe, allows consumers to ship their 100 per cent cashmere items from any brand to Prato to be recycled.

  

Pure London (UK, February 12 to 14, 2023) will be bringing together the most forward thinking and creative brands from around the world. The aim is to celebrate beautiful craftmanship, design and style and also highlight the importance of ethical and sustainable fashion.

Contemporary fashion brand Emme Marella is designed for dynamic and style savvy women. Italian style merges with the latest trends to create an energy-filled collection which celebrates colour and texture. Sophisticated cuts and creative details create an exuberant yet feminine range. Persona by Marina Rinaldi will feature elegant everyday women’swear that is modern, laidback, and youthful. An easy-going spirit runs through the line which features printed separates, relaxed tailoring, directional knitwear, and chic dresses.Queens of Archive will feature show-stopping, timeless and feminine pieces that are designed in-house using bespoke prints and fabrications. The brand evokes a hybrid culture fusing design, music and creative storytelling to bring a layered, more considered product and story. iBlues is a feminine brand with an eye-catching collection in striking bold colours. Designs are full of attitude made from high quality fabrics with attention to detail.

Pure London is the UK’s leading trade fashion buying event and has the largest women’swear offering in the UK and the largest offering of international brands as well as exciting onsite trend partner and new sustainability initiatives.

 

EuratexAutumn 2022 Report

After a strong first half of the year, the EU economy has now entered a much more challenging phase. The EU is among the most exposed advanced economies, due to its geographical proximity to the Russo-Ukrainian war and heavy reliance on Russian gas. The energy crisis is eroding households' purchasing power and weighing on production. Economic sentiment has fallen markedly. Growth in 2022 was better than previously forecast and GDP growth in the EU was on the upside in the first half of 2022. Expansion continued in the third quarter, though at a considerably weaker pace. The potent momentum from 2021 and strong growth in the first half of the year have lifted real GDP growth in 2022 as a whole to 3.3 per cent in the EU (3.2 per cent in the Euro area).

Growth expected to slacken

However, the growth outlook for 2023 is significantly weaker and higher for inflation compared to the European Commission's Summer Interim Forecast. Growth will significantly contract at the turn of the year. Amid higher uncertainty, energy price pressures, erosion of households' purchasing power, a weaker external environment and tighter financing conditions were expected to tip the EU, the euro area and most member states into recession in the last quarter of the year.

As inflation keeps cutting into households' disposable incomes, the contraction of economic activity is set to continue in the first quarter of 2023. Growth is expected to return to Europe in spring, as inflation gradually relaxes its grip on the economy. However, with powerful headwinds still holding back demand, economic activity is set to be subdued, with GDP growth reaching 0.3 per cent in 2023 as a whole in both the EU and the euro area. By 2024, economic growth is forecast to progressively regain traction, averaging 1.6 per cent in the EU and 1.5 per cent in the Euro area. The predicted inflation in 2023 will be around 7 per cent; current inflation in the EU is 9.3 per cent and 8.5 per cent in the Euro area.

Strong labour market remains undaunted

The surprising fact in the report is about EU’s labour market. The robust labour market seems unaffected despite the challenging environment brought on by the looming recession and inflation. Currently, employment and participation are at their highest and unemployment at its lowest in decades. The forceful economic expansion pulled in an additional two million people into employment in the first half of 2022, raising the number of employed persons in the EU to an all-time high of 213.4 million. The unemployment rate remained at a record low of 6 per cent in September. Labour markets are expected to react to the slowing of economic activity with a lag but will remain resilient. Employment growth in the EU is forecast at 1.8 per cent in 2022, before coming to a standstill in 2023 and moderately edging up to 0.4 per cent in 2024.

Weak outlook for clothing sector

Derived from the EU Commission’s September 2022 survey on European Business Cycle indicators and Business Consumer Survey (subsector database), the EU Business Confidence indicator for the months ahead deteriorated, reflecting these energy-related challenges and increased economic uncertainty. Managers’ confidence fell sharply in the textile industry, going markedly below its long-term average and to pre-Covid level in the fourth quarter of 2019. The textile industry’s confidence indicator for the months ahead dropped substantially (-6.3 points), resulting from managers’ more pessimistic views on their production expectations, on their appraisals of stocks of finished products (accumulation of stocks), and of order-book levels.

The indicator in the clothing sector decreased more moderately and in September 2022 was down by -1.1 points. The decrease in confidence resulted mainly from negative developments in manager’s appraisals of the order-book levels. By contrast, entrepreneurs’ production expectations for the months ahead improved, as their assessments of the adequacy of finished products stocks (reduction of stocks). The employment expectations and the assessment of export order-book levels, which are not included in the headline indicator, worsened. To summarise, the EU’s clothing and textile sector is set to contract and this contraction will negatively impact on a wider scale through supply chains from other nations.

  

Superdry’s revenue was up 24 per cent in the nine weeks to December-end.

The British brand saw sustained demand over the Christmas period as sales at stores caught up to pre-pandemic levels. However Superdry expects to broadly break even this year compared with its earlier forecast for a profit since its wholesale segment underperformed amid higher uncertainty during the last quarter.

The retailer’s adjusted loss before tax widened further in the half year from the same previous period. Superdry doesn’t expect market conditions to become easier any time soon, but with a new financing package in place, and the brand in great health, it is approaching the year ahead with optimism.

Premium British fashion brand Superdry has products like apparel, fragrances, body sprays and body plus hair washes. The UK market represents around 50 per cent of Superdry’s weekly sales and the US around ten per cent. Despite the revenue increase, Superdry is cautious due to increased cost inflation and the worsening conflict in Ukraine, as operating margins are certain to come under pressure.

Inflation-pinched British consumers cut their shopping in December 2022 by the most in at least 25 years, dashing hopes of a Christmas boost for the country’s flagging retail sector.

  

India has extended the implementation of the quality control order for viscose staple fiber by 60 days. The extension is upto March 29, 2023.

In order to check the imports of low-quality viscose staple fiber, the order was issued on December 29, 2022, which was to be implemented within one month of notification. However, looking at the import dependency of India on viscose staple fiber, especially some nominated categories, and the various procedural issues being faced by the user industry, a request was made to extend the deadline for the applicability of the notification by the Confederation of Indian Textile Industry(CITI) and other industry associations. This was to ensure a smooth transition and also to make sure that the viscose staple fiber orders which were already shipped were not impacted.

During this extension Indian manufacturers will get time to meet their prior commitments and to ensure complete compliance with the prescribed quality control standards.Viscose staple fiber is a manmade, bio-degradable fiber used for manufacturing various textiles.

In Tamil Nadu over two lakh power looms have switched over to 100 per cent viscose staple fiber and contributed significantly to fabric exports. Manmade fabric is expected to be the future growth engine of Indian textiles and the clothing sector.

  

Indian imports of textiles rose by as much as 48 per cent until November 2022 this fiscal year. Outbound shipments, however, shrank by 13 per cent.

India has traditionally been an exporter of garments and textiles. This growth in imports was driven by purchases of inputs like raw cotton, fabrics, and manmade textiles as well as of finished products.

Apparel imports shot up 53 percent in the first eight months of this fiscal. Over 40 per cent of these imports came from Bangladesh, where several Indian firms have set up units to take advantage of its duty-free access to markets like the US and the EU. Another 20 per cent of imports originated from China.

A shortage of cotton in the domestic market not just pushed up imports of the fiber but also affected the production capacity of several units in the value chain. The spurt in cotton prices, too, drove up the import value of both inputs and finished products. However this situation is expected to improve in the next fiscal once investments made under the PLI scheme start giving results, with India’s recent trade deals with the UAE and Australia as well as expected improvement in cotton production also helping.

The share of apparel and textiles among the total merchandise exports of India declined to eight per cent in December 2022 from nine per cent the previous year.

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