Are we witnessing the rise of oligopoly in the Indian Fashion industry?
Traditional retail in the apparel segment comprised of 18 million mom & pop multibrand retail outlets with a market share of 88% in 2017. With the advent and growth of corporates in this category, today the proportion of trade channel is barely 60%.
Corporates are entering the industry by establishing National Fashion Brands or partnering with international brands or launching private labels, in case of retailers.
Reliance is present in the affordable fashion space vide Reliance Trends. It is the biggest player in the affordable luxury segment with brands like Giorgio Armani, Jimmy Choo, Hugo Boss, Diesel and has entered strategic partnerships with designers like Manish Malhotra, Abu Jani Sandeep Khosla, Raghavendra Rathore, Ritu Kumar and Anamika Khanna. It is launching the label-Youth in the value format and is now bringing the biggest Fast Fashion brand Shein to India. Reliance retail has more than 18000 stores in India and growing rapidly every day.
Tata has captured the fast fashion space with Zara, has entered the value segment with Zudio and is growing expeditiously in the affordable fashion arena with Westside.
Adirya Birla’s The Collective boasts of international brands like Ralph Lauren, Hackett London, Ted Baker, American Eagle and Forever 21. It has Louis Philippe, Van Heusen and Peter England in its stable and has formed alliances with designers like Tarun Tahiliani, Shantanu & Nikhil, Masaba and Sabyasachi.
Other notable players eating into this pie are Arvind Fashions, Shoppers Stop, Landmark Group(Lifestyle and Max), Raymond, Manyavar, Page Industries(Jockey), Myntra H&M and Nykaa to name a few.
The growing clout of these handful players in the market raises concerns for the industry as a whole.
1)Will these big players edge out the local fashion labels? Or will the local labels display resilience and adapt to online marketplaces for their subsistence?
2)With a few big brands commanding the market, will the manufacturers lose their bargaining lever and become subservient by compromising their margins for survival?
3)While the final consumer is spoilt for choice right now, will this be the case once a few big brands and retailers with deep pockets rule the industry by exterminating localised labels?