How are Brands Shaking Up the $24 Billion ‘Desi Avatar’ Market?
4 min read
The Indian ethnic market is estimated to be valued at around 20 billion dollars or Rs. 1.45 trillion in size in the year 2020, and is expected to grow to 24 billion dollars by 2025.
With a plethora of ateliers catering to their unique audience base, the foray of big business houses’ into the segment is a gushing fashion romance. The Indian ethnic market is highly segmented into organized and unorganized markets with multiple players. Over two-thirds of the segment is unorganized. The balance is distributed between multiple big and small labels from luxury to retail.
ABFRL, (Aditya Birla Fashion Retail) by the Aditya Birla Group is India’s first billion-dollar pure-play fashion powerhouse with a bouquet of leading fashion brands and retail formats. With the acquisition of Shantanu & Nikhil and Jaypore in the year 2019, its presence in the online ethnic space has taken a step up.
In the business deal with the domestic designer label brand earlier this year, ABFRL bought a 51% stake in Sabyasachi for Rs. 398 crores, and in another partnership deal with the designer Tarun Tahiliani with a 33.5% stake for Rs. 67 crores, it is also set to launch a new men’s ethnic wear brand. The group through its collaborations is all set to seize a large share of the ethnic wear market through an attractive portfolio of brands that is comprehensive, across key consumer segments, usage occasions, and geographies.
Reliance Retails through its brand “Avantra” translated to ‘No Man’s Land’ is going all traditional. The subsidiary will be launching the chain of stores ahead of the festival and wedding season that lies ahead. The move is strategic given Tanishq by tata group foraying into the ethnic wear space and ABFRL’s growing brand portfolio in the ethnic wear segment.
Besides selling private labels, Avantra will be teaming up with regional weaver clusters and several third-party brands like ‘Nalli Silks’ and ‘Pothys’ along with offering jewelry, tailoring services, and accessories. The first store is set to come up in Bangalore.
Label Ritu Kumar keeping up with this burgeoning change was among the first luxury labels to diversify the product portfolio for every segment of the customer: Ri is a premium bridal and formal wear line and Ritu Kumar(category) is a traditional pret brand offering ethnic daily and semi-formal wear. What really is the honey for the big bees here is the margin with which the segment operates.
This burgeoning trend may be the reason why Fabindia is now looking to go public, with an IPO valued at $2 bn. How will the other players: Manyavar, Biba Meena Bazar respond and change their strategies would be an interesting sight ahead.
The arena is ripe for India’s ethnic wear market to rebound, with significant opportunities for scalability. With eyes on all the categories of audiences: value, premium, and luxury, the game is all set for who is acquiring who. It is not the first time that brands are going ethnic, the global luxury brands have done it in the past, Hermes launched a limited edition saree in 2011 while Giorgio Armani launched an exclusive Indian capsule collection of Achkan jackets for Autumn 2019. Instagram ‘Reels’ have disrupted the market and marketing practices – as never happened before in human history. Bloggers, celebrities, influencers are a go-to platform to flaunt and endorse brands, jewelry, art, and what not!
It has propelled a butterfly effect on the ethnic wear market. The brands and the bloggers are having the time of their lives. Gone are the days when sarees and Kurtis were not the first choices for a young outspoken, independent woman. Sarees have rather become that piece of clothing that every women revers. Reels are one of the major reasons for this transition. Celebrities are now often found endorsing Indian homegrown desi brands that have given a huge boost to small businesses. Given the social media and internet penetration, the Indian youth is becoming more ‘fashion conscious’ with new FOMO each passing day.
This growing craze for ethnic wear is paving way for other businesses as well.
The related lease and rental-based businesses are registering a strong growth as well. The online fashion rental market in India with a revenue of 3-4 billion US dollars, has been expanding continuously. As of June 2021, there are 44 online fashion rental startups in India with popular brands such as Stage 3, Rent A Closet, The Clothing Rental being a few.
This love of ethnic wear does not come in isolation, but is accompanied by the accessories really makes this space exciting. It is the Diderot effect, that when you have that perfect Lehenga or saree you would also need the right bangles and bracelets, the right necklace that go along, which again brings us to the basic premise of the various other connected industries that get affected.
The Indianisation of the retail houses is ramping up the ethnic wear market to a level playing field. Making India’s ethnic gazette global is sure to pay huge dividends to the robust brands. The future looks vibrant for the desi Indian, with multiple brands and options in all the categories amidst a rebound of economic activity in the country.
