How fast fashion is changing India's retail scene

The arrival of international brands and the growing affluence of the country’s middle class is creating a new generation of shoppers.

September 27, 2016

Even five years ago the majority of Indians would go shopping just once or twice a year, usually before a major festival or for family weddings.

Now, times are changing rapidly after brands such as H&M, Forever 21 and Zara entered India to much fanfare and growing affluence is allowing a new generation of shoppers to become part of the world of fast fashion.

“Shoppers in India prefer brands that offer value for money and provide the latest global fashions,” says Anuj Kejriwal, National Director, JLL India. “The rising disposable incomes along with consumers’ aspirations to follow global fashion of this mostly well-travelled segment has fuelled the growth of fast-fashion stores here.”

Today’s city dwellers are heading out to buy clothes at least 10 to 12 times a year – and fashion stores are rapidly expanding their footprints to capitalize on the growing demand. Sales of Western-style clothing are hitting record highs, almost doubling in the past five years to $22 billion, according to Euromonitor International.

“Fast fashion has emerged as a pertinent and growing category in Indian retail sector,” says Pankaj Renjhen, Managing Director – Retail Services, JLL India. “As global and Indian fast-fashion retailers evolve in the Indian marketplace, consumer expectations around the latest fashions are growing and competition is becoming more intense.”

Spanish group Zara first arrived in India in 2010 and now has 18 stores in India. Swedish brand H&M, which set up shop in the country in 2015, has expanded rapidly to become the country’s fastest growing global fashion brand, opening 16 stores in 18 months.

Domestic retailers take up the challenge

Indian brands are making their mark in the sector after gauging the success of the international retailers, who have been selling items from around $10. “Domestic brands are adapting their business model in order to compete with fast-fashion and growing advent of online retailing. Their approach towards expansion is more structured. They open stores in the right location and make strategic real-estate decisions,” adds Kejriwal.

India’s first domestic fashion chain, Cover Story opened its first stand-alone store in Mumbai in June featuring its own version of catwalk trends but adapted for Indian culture. ” “You can’t take on the Zaras and H&Ms of the world sitting in India,” Kishore Biyani, chief executive of Future Group, which owns Cover Story tells the Wall Street Journal. “You need to look and feel what they do to beat them at their own game.” Cover Story plans to open 50 other stores across India in the next three to four years.

Like with Western retailers, it’s not just about the clothes; it’s about the whole shopping experience. “Domestic brands are constantly innovating and bringing in newer formats to focus on providing experiential shopping environment,” says Renjhen. For instance, Cover Story has a selfie booth where customers can take pictures in their new clothes and share it on social media or also print them. The large screens helps customers browse the collection.”

The right location

Store location is also a key consideration to enable brands to reach out to the maximum people from their target audience.

“Domestic brands are competing with international brands not only in terms of consumer demand and sales, but also attaining quality retail real estate,” says Kejriwal. “As India has limited quality retail developments, the competition to acquire prime space here is getting intense.”

Shopping mall developers are becoming big fans of fast fashion brands. “They too are embracing fast-fashion retailers to increase the overall foot falls of the malls,” says Kejriwal. “As these retail outlets have become the anchor stores for the malls, they are provided with prime locations in the building.”

With consumer appetite for fast fashion – both from domestic and international brands – on the rise, it’s very much becoming a driving force in India’s retail scene.

“In short and medium term, it is expected that the prominence of fast-fashion retailers will further grow in India,” says Kejriwal. “Many more international retailers are expected to set up shop in India to tap into the growing opportunities and potential of the Indian retail market. But, as ever, location remains key.”