New Delhi, June 20
The Indian apparel sector is projected to clock a 11 per cent compound annual growth rate (CAGR) over FY24-FY29, a report showed on Friday.
India's apparel sector expanded at an 11 per cent CAGR over FY20-24, in line with nominal GDP and private final consumption expenditure (PFCE) growth, according to HSBC Global Investment Research.
Driven by increasing penetration and affordability, branded segment has seen a 16 per cent CAGR over FY12-24 (unbranded 5 per cent CAGR).
Going forward, across different apparel sub-segments, non-formal wear has higher growth expectations with active wear (25 per cent FY24-29 CAGR driven by post COVID-19 trend of casual wear) and organised value retail (16 per cent CAGR FY24-29, the biggest beneficiary of shift from unorganized) expected to clock highest growth.
Apparel though remains a competitive market disrupted by e-commerce, foreign brands, and changing fashion cycles, said the report.
There are two major business models — Format focused (retail outlets with distribution primarily limited to the company's own outlets and e-commerce) and Brand focused (fixed asset-light business but working capital-intensive due to distribution mix).