The textile and apparel industry is the second largest job generator after agriculture and contributes 2% to the country’s GDP. Covid-induced economic challenges have prompted market leaders in the segment to reinvent themselves with ample support from e-commerce giants
Kolkata: Being challenged in life is inevitable. Being defeated is optional. And, apparel captains of Bengal are not willing to throw in the towel yet in their battle against a pandemic. In fact, they are reinventing and re-strategising to create opportunities amid a crisis.
Lux Industries, for one, has ramped up its online presence with ample support from Amazon, Myntra, Flipkart, Ajio and Nykaa Fashions. “Teaming up with e-commerce platforms has improved the company’s visibility in general and has been beneficial for our brands — Lux Cozi, ONN, One8, Lyra and Lux Venus — in particular,” said chairman Ashok Kumar Todi.
The company is also generously using social media to keep its customers updated on new launches, campaigns and brand vision. “During the lockdown, we had launched a full-fledged campaign on the ways consumers could distinguish Lux’s white vests from competing alternatives. The company wove the product’s positioning around 21 distinctive attributes with the punchline ‘Ikkis khoobiyon wali baniyaan’,” said its managing director Pradip Kumar Todi.
Lux Industries first opened shop in 1995 with the vision of becoming a leading manufacturer in “comfort innerwear” in the country. Its flagship brand Lux Cozi was born in 2001, following which the company gained momentum and transitioned from an unorganised sector to a brand-driven organised sector. At present, it offers a wide range of hosiery products for men, women and children, and has launched its exclusive brand outlet ‘CozyWorld’ to extend consumer engagement through retail.
With an annual turnover of Rs 1,964.86 crore (till March 2021) and a workforce of 2,400-plus people, Lux Industries has also evolved into a multi-continental brand that is available in 47 countries. A greenfield expansion of Rs 110 crore is on the cards.
The textile and apparel industry is the second biggest employment generator after agriculture and contributes 2% to the country’s GDP. Both unorganised and organised sectors employ millions of workers, who are either intrastate rural migrants or migrants from neighbouring states doing the same job for lower wages than local labour. Since this workforce had to return home during lockdown and is not back in full strength yet, the textile industry is grappling with inadequate human resource.
“Covid-19 has been unkindest to the vulnerable groups of our society. Many big hosiery businesses have set up hostels for labourers so that the latter do not lose their source of income and production continues despite restricted workforce movement,” said Ramesh Agarwal, whole-time director and CFO, Rupa. However, as the hosiery industry continues to remain largely unorganised and heavily reliant on cash and credit, smaller players are still struggling to recover from the economic slump. “These players have had to shut down their businesses owing to overstretched working capital and liquidity, as well as increasing raw material prices,” he added.
A Kolkata-based company that began its journey in 1968, Rupa is among the largest knitwear brands in India that produce innerwear, casual wear, thermal wear and sleepwear for men, women and children. While Frontline is its flagship brand, Rupa also has others like Softline, Euro, Bumchums, Torrido, Thermocot, Macroman and Jon.
“When lockdown was imposed, most retail outlets had to shut down and business was hit. However, online hosiery sales saw a surge, courtesy customers from tier-2 and tier-3 cities. We are trying to expand our e-presence through our exclusive ‘Rupaonlinestore’ and in partnership with key e-players like Amazon, Flipkart and Myntra,” Agarwal said. “Our annual turnover for 2019-20 was Rs 975 crore and for 2020-21 Rs 1,313 crore. We have grown by 35% in turnover and by 34% in net profits in 2020-21,” he added.
According to Vinod Kumar Gupta, the managing director of Dollar Industries, the shortage of yarn in the domestic market is a major challenge that has resulted in an increase in prices of hosiery and knitwear products. “The production of yarn in factories was put on hold during the lockdown. Additionally, the surge in yarn export to Europe and the US since October, owing to disruptions in their domestic production as well as sourcing from China, essentially resulted in a yarn shortage in the domestic market. As a result, hosiery brands have jacked up prices,” he said.
Instead of being paralysed by an abnormal hike in yarn prices, Dollar Industries shifted focus to new business avenues. “Since work-from-home has become the new normal, athleisure has gained popularity across demography. We recently made forays into this segment and around 7% of our total turnover is coming from it,” Gupta said.
Established in 2008 as a one-stop shop for innerwear needs of men, women and children, Dollar Industries has emerged as one of the leading brands in the hosiery sector with an enviable 15% market share and a significant percentage in textile exports of the total production in the Indian hosiery market. Given the company’s extensive presence across social media and e-commerce platforms, it has also emerged as the highest-selling Indian innerwear brand in the UAE and West Asia. “We have tied up with Amazon, Myntra and Flipkart, and witnessed a 3X growth in our online sales,” Gupta said.
Established in Kolkata in 1964, TT Limited is an all-India brand dealing in innerwear and casuals. Its manufacturing units are located in Tamil Nadu, UP and Gujarat, besides Bengal. According to its MD Sanjay K Jain, the GST Council’s decision to correct inverted duty structure to lessen the tax burden on the apparel industry is a key problem. “It came as a shock because the common man will have to pay 7% extra, which may impact the MSME and retail sectors. Reduction in working capital and a sharp drop in cash flow are challenges too,” he said.
To stay competitive in this new environment, TT is resorting to cost-efficient practices and has prioritised the use of technology to continue operations despite mobility restrictions. “We are currently selling across leading online platforms like Flipkart, Amazon, Ajio, Paytm and Snapdeal,” Jain said.
Source: Times of India