Fashion at the helm of India's economic growth
As India’s fashion and textile market has experienced steady growth since the millennium, investments continue to rise and fashion continues to drive India’s economic growth as a whole.
The reach of the fashion industry has spread both geographically throughout India and through sections of society. After years of steady growth, there has recently been increased funding and investments in the sector across the spectrum. For example, Venture Capital (VC), Private Equity (PE), and strategic/HNI investments have all increased.
The fashion market in India is now brand-dominated and it is estimated that people are shopping for clothes around ten to 12 times a year, a drastic increase from before. The rise of e-commerce and social media has greatly widened brands’ customer reach and allowed them to gain popularity without the investment of a brick and mortar store. Moreover, social media has allowed people to view and then purchase the same clothes as celebrities or personalities they follow, and so digital promotion is increasing items’ desirability and ease of acquisition.
Prashant Mehra, a partner of Grant Thornton India, said of the industry, “The Indian fashion retail industry has been at the helm of India’s growth story with over 500 transactions in the last decade valued at around US $13 billion. Of this, US $1.3 billion has been transacted through Domestic M&A, US $10 billion through PE/VC monies and the balance through inbound investments. These investments are a testament to both the interest and potential in the sector.” Mehra also went on to explain that, while previous investments had focused on e-commerce platforms such as Voonik and Limeroad, since this section of the market is now well funded, the focus will now shift to fashion brands themselves.
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