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Global Lifestyle Monitor: India - Cotton Incorporated

CORPORATE / MARKET DATA / SUPPLY CHAIN INSIGHTS / GLOBAL LIFESTYLE MONITOR: INDIA

As an emerging consumer powerhouse, India offers promising prospects for retailers and brands monitoring the apparel market for expansion opportunities. India has claimed the position as the world's second largest producer of cotton, while simultaneously experiencing market growth and increased consumer demand. According to Euromonitor International, real Indian clothing expenditures amounted to INR 2.7 trillion in 2011 and are projected to grow 60% to INR 4.3 trillion by 2016. Although the growth of India's retail sector is well-documented, the retail landscape remains quite traditional. Independent stores dominate the retail environment and organized retailers represent less than 7% of all retail sales (Mintel). According to the 2012 Global Lifestyle Monitor survey, half of Indian consumers (50%) say they buy most of their clothes from unorganized retail stores or street markets. Regardless of where Indians choose to buy clothing, they show a high affinity for clothes shopping when compared to other global consumers. Eager Indian shoppers remain passionate about quality cotton clothing in a market where western apparel continues to gain popularity, especially among young men. PURCHASING PATTERNS A considerable segment of Indian consumers (41%) report that they have more money to spend on clothing compared to last year. Discretionary income for apparel purchases and a fondness for shopping (91% say they
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Global Lifestyle Monitor: India - Cotton Incorporated

somewhat like or love shopping for clothing) translates into the potential for a thriving apparel market. Menswear is the fastest growing apparel segment in India, and is expected to remain so for the next several years (Venn Research). Continued growth in the menswear sector could be attributed to a wider acceptance of and preference for westernized clothing by male consumers, which has encouraged brands to expand their offerings. Research shows that 98% of men's wardrobes are dedicated to western apparel, compared to 75% for women. Indians exhibit fewer impulse shopping behaviors, with almost half (47%) planning their apparel purchases, a pattern seen in both younger (ages 15-34) and older (ages 35-54) consumer groups. A primary reason that consumers are likely to plan purchases relates to the reality that Indian consumers shop significantly less than the average global consumer. Less than one-fifth (18%) shop for apparel at least once a month, compared to the global average of 41%. Indian consumers prefer to wear the most current styles, with the caveat that fashions are comfortable. When given the opportunity, 72% (compared to 62% globally) prefer to change their clothing to fit each event they attend, rather than wear one outfit throughout the day. As expected, younger consumers tend to be more influenced by fashion, while older consumers are more likely to purchase basic styles that are comfortable. The dichotomy between Indian consumers' comfort and fashion needs could represent a market opportunity for brands and retailers that can provide both elements in their apparel offerings to appeal to a broad spectrum of consumers. NATURALLY FASHIONABLE Indian consumers value quality clothing and 81% of consumers indicate a willingness to pay higher prices to ensure that apparel meets their standards. In India and globally, the presence of natural fibers acts as a key identifier of quality apparel. As a result, knowledge of fiber content plays a major role when Indians evaluate apparel; two-thirds of consumers indicated that better quality clothing is made from natural fibers. Notably, scrutiny of apparel purchases by Indians has increased. Consumers who prefer to know fiber content has risen significantly to 72% in 2012 from 64% in 2010. Cotton apparel fulfills Indian consumers' desire for quality clothing made of natural fibers. While consumers have always been partial to cotton, their affinity for natural fibers has grown. When asked about their feelings toward cotton/ polyester blends, nearly three-fourths (72%) said cotton/polyester blends are not as good as 100% cotton. This consumer sentiment is up significantly from 51% in 2010. Recent research in Mumbai and Ludhiana
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Global Lifestyle Monitor: India - Cotton Incorporated

found that 70% of apparel items at retail contained cotton, which reflects consumer demand as more than eight out of 10 Indian consumers (84%) prefer their clothing to be made of cotton and cotton blends. The high level of comfort that Indians associate with cotton makes nine out of 10 consumers rank it as the fiber best suited for today's fashion. DEVELOPING DENIM In comparison to other countries surveyed, denim enthusiasm is not as high among Indian consumers. However, the number of consumers who love or enjoy wearing denim has grown steadily over the past several years. In 2012, 31% of Indian consumers say they love or enjoy wearing denim, up from only 13% in 2001. Younger consumers and male consumers are more than twice as likely as their counterparts (older consumers and females) to say they love or enjoy wearing denim and that they own denim apparel. Importantly, demographics play a major role in shaping attitudes toward denim in India. Consumers in Bangalore and Delhi, for instance, are more likely to say they love or enjoy wearing denim, and denim jeans have the highest popularity in Bangalore, where consumers own double the amount of jeans than consumers in other regions. As India evolves economically and culturally, cotton products, like denim, will most likely continue to gain favor among consumers. Western apparel brands and offerings, which include denim apparel, are expected to expand and provide more options for Indian consumers. Success in this market will hinge on providing quality clothing made from natural fibers that satisfy both the fashion and comfort expectations of consumers.

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Global Lifestyle Monitor: India - Cotton Incorporated

ABOUT THE SURVEY This issue is part of a special series of Supply Chain Insights reporting results from the Global Lifestyle Monitor survey, a biennial consumer research study sponsored by Cotton Council International and Cotton Incorporated. In the 2012 survey, 5,000 consumers (approximately 500 in each of the 10 countries surveyed) were surveyed via telephone, faceto- face interviews, and online. Respondents were male and female, aged 15 to 54. The ten countries included in the 2012 survey were Brazil, China, Colombia, Germany, India, Italy, Japan, Thailand, Turkey, and the United Kingdom.

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