Global retailers planning to set up shop in India are also looking at the country as a sourcing hub for their global operations, according to top executives of such firms. “I think opening Indian fashion to the rest of the world is an opportunity,” said Bonnie Brooks, vice-chairman, Hudson’s Bay Co., which owns retail chains such as Hudson’s Bay, Lord & Taylor and Saks Fifth Avenue.
She spoke on the sidelines of the Indian Fashion Forum (IFF) in Mumbai. Last year, a management team from the luxury department store chain Saks Fifth Avenue was in India to look at retail opportunities. “For Saks Fifth Avenue, India is on the horizon in the foreseeable future,” said Brooks, without giving details. During her visit in Mumbai, Brooks visited the showrooms of fashion designers Gaurav Gupta and Sabyasachi. She was also interested in visiting high-end jewellery retailers, she said. In January, Ikea India Pvt. Ltd, the local unit of Swedish furniture firm Ikea Group which got foreign direct investment approval to open stores in India, said it plans to double its sourcing from the country by 2020. Currently, Ikea sources products worth $370 million from India. It is looking at increasing its number of suppliers for existing home furnishing categories such as textiles and rugs, as well as in new categories such as furniture, mattresses, metal, plastics and lighting. The firm is also looking at sourcing goods made from local sustainable materials such as bamboo, jute and acacia. Indian handicrafts, one of the country’s largest exports, are also being sourced by luxury stores in the West. “We will end the financial year 2015 with revenues of Rs.27,000 crore, a 24% growth over last year’s Rs.21,500 crore,” said Rakesh Kumar, executive director, Exports Promotion Council for Handicrafts, adding that these products are showcased in the gift, furniture, home, fashion and lifestyle sections of high-end department stores such as Bloomingdales, Gallery Lafayette and Harrods. The Indian handicrafts market is estimated to be worth Rs.46,000 crore; exports account for close to 60% of the overall market. Moreover, 60% of the Indian handicrafts exports goes to the 10 quality-conscious markets, including the US, the UK, Germany, France, Italy and the Netherlands, said Kumar. Jewellery exports from India are also growing.
However, unlike handicrafts, most Indian jewellery is mass-produced and sold at value retail chains such as Wal-Mart, J.C. Penney and Sears. “India’s market share in the global jewellery market has increased from 0.5% in 1997 to 12.5%, accounting for $12 billion-worth of exports for Indian jewellers,” said Pankaj Parekh, vice-chairman, Gems and Jewellery Export Promotion Council (GJEPC), a lobby group. Less than 1% of the overall exports is couture, he added. Likewise Indian fashion. While India is known as a textile and apparel manufacturing hub, Indian fashion caters largely to the Indian diaspora. “Indian fashion can’t be showcased in department stores,” said Sunil Sethi, managing director, Alliance Merchandising Pvt. Ltd, a sourcing and buying agency. Over the years, the firm has taken more than 25 Indian fashion designers to the international platform, selling their products under their own brands to stores such as Selfridges, Golf & Co, TsUM, The Conran Shop, Habitat and Coin. “It will be difficult for any of the Indian cities to become a global fashion capital in the near term... India’s fashion sector is very nascent and is considered to be less than 2% compared to the global market.
Even Bangladesh and Vietnam, estimated to be a tenth of India’s size, compete strongly against India in the global apparel export,” said Neelesh Hundekari, principal and head, luxury and lifestyle practice, India, at global consultancy firm A.T. Kearney at IFF 2015. China’s contribution to global apparel exports is about 40% while India’s is 5%, he said. Meanwhile, Sethi of Alliance Merchandising is working with BHLDN Llc, a retail chain specialising in wedding wear to showcase Indian designers. A small number of fashion and jewellery designers have made a name globally, securing orders from celebrities. Lady Gaga and Nicole Scherzinger have worn ensembles of fashion designers Alpana and Nikhil. Jewellery designer Viren Bhagat, who makes only 60 pieces a year, is one of the most-sought after contemporary jewellery designers, according to Christie’s, a New York-based auctioneer.