02 February 2022, Mumbai:

The fourth Union Budget presented by Finance Minister Nirmala Sitaraman yesterday has been hailed as "progressive and people-friendly" by many leaders including Prime Minister Narendra Modi.

The points presented in the budget which provide a huge fillip to the domestic textile industry:- 

1. Capital Allocations

• Rs 133.83 crore under Textile Cluster Development Scheme, 
• Rs 15 crore each for both PLI scheme and PM MITRA (to bring in Rs 19000 crore investment over next 5 years). 
• Rs 478.83 crore for textile capacity building, 
• Rs 105 crore under Raw Material Supply Scheme to generate employment and productivity.
• Rs 17,683 crore to the Cotton Corporation of India (CCI) for procuring cotton under the MSP.

2. Tax Schemes:

• Raise in import duties for certain fabrics that can be produced domestically,
• Exempts in custom duties on import of trim & accessories.
• Budget allocation to attract fresh investments in textile

Industry view

The budget has been praised by many leaders across the textile and apparel industry.

Budget to wipe out CCI’s losses

Ravi Sam, Chairman, Southern India Mills Association (SIMA), opines the budget will help India become a superpower in coming decades.

"Budget to wipe out CCI’s losses incurred for procurement of over two crore bales of cotton during the last two years."

Addressing structural issues on taxation and raw materials enhances the overall competitiveness of textile industry, he feels.

However, he urges the government to exempt ELS cotton and sustainable cotton from 11% import duty. 

Tax exemption to enhance fabrics market:

MA Ramaswamy, Chairman, PDEXCIL, appreciates the exemption offered on certain fabrics, embellishments and accessories.

"This will help the fabric and the made-up sector."

The PLI scheme for textiles will also help boost employment, he adds.

Ease of Doing Business 2.0:

Appreciating the initiating of ‘Ease of Doing Business 2.0’ with industry stakeholders, Prabhu Damodaran, Convenor, Indian Texprenuers Federation says, the move will help the federation improve its ranking.

The extension of tax incentive period for new manufacturing units by a year will motivate industries regarding new Capex, he adds. He also hailed the government’s move to prioritize the use of technology for cotton crop assessment. This will help the industry get good market place intelligence.

Retail industry was as badly impacted in the pandemic:

The Clothing Manufacturers Association of India (CMAI) too hails the removal of import duty on accessories, embellishments, trimmings, buttons, etc, a long-time demand of the industry. CMAI believes this would particularly help apparel exports to be more competitive.

The Associations has welcomed the budget as a growth-oriented with several measures that encourages capital expenditure and other growth-related activities.

Extension of the ECLG Scheme for MSMEs by a year will help the apparel industry, since many units are still struggling to overcome the adverse effects of the pandemic.

However, it is unfortunate that the enhanced outlay for the scheme is restricted only for the hospitality industry – as the retail industry was as badly impacted in the pandemic.

Even under the current wave, retail continues to be impacted with lockdowns, partial closures, limited working hours, etc, CMAI said in a press release.

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03 February 2022, Mumbai:

Adidas has signed Indian football player Sandesh Jhingan as new brand ambassador to inspire the next generation of footballers in the country.

The endorsement deal signed with Adidas makes Jhingan one of the few elite Adidas ambassadors in India like Rohit Sharma, Mirabai Chanu, Lovlina Borgohain, Manpreet Singh, Simranjit Kaur, Nikhat Zareen, and Jeremy Lalrinnunga.

Sunil Gupta, Senior Director, Adidas India, the partnership will enable the brand to inspire the youth and work towards a common goal of building football from the grassroot level in India.

Jhingan adds, the association will take him closer to his dream of seeing India develop greater passion for football and gain a spot in the 2026 FIFA World Cup.

Adidas India currently has over 400 stores across the country.

In addition to retail stores, the brand also sells through its website and other e-commerce platforms.

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03 February 2022, Mumbai:

Powered by a massive 114 per cent rise in global luxury sales, direct-to-consumer (DTC) online purchases rose by 17 per cent year-on-year in 2021, as per a new survey data from global DTC e-commerce specialist ESW.

According to the survey, formed in response to the COVID-19 pandemic, behavioral shifts remained entrenched throughout 2021.

Clothing remained the most popular cross-border category to buy, although footwear saw big growth.

Luxury emerged as the topmost performer while the DTC sales increased slowly for multi-brand retailers and single brand and specialist retailers.

ESW's "The Global Voices: 2022 survey" of more than 14,000 consumers across 14 countries revealed millennials remain the driving force behind increased DTC and cross-border shopping rates.

In fact, its figures show that 25-40-year-olds reported increased DTC purchasing across all 11 purchasing categories monitored as part of the survey.

That led to sizeable increases in domestic e-commerce sales of luxury products, sporting goods, cosmetics, fragrance, and skincare across all age brackets.

The report also said that in 2021, 37 per cent millennials made more than 11 online cross-border purchases, an increase of 12 per cent.

This was followed by 30 per cent of Gen Z, 26 per cent of Gen X and 19 per cent of Baby Boomers.

Geographically, shoppers in the UAE, China and India reported the highest rates of purchase frequency levels at 11 or more.

In the UK, 31 per cent of respondents reported making 11 cross-border purchases or more in 2021, followed by Germany and France. By country, shoppers in Japan, China , the UAE, South Korea and Mexico reported the highest rate of respondents spending more than GBP£1,100 (US$1,500) on cross-border purchases in 2021.

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02 February 2022, Mumbai:

Replacing the oh-so-comfy boyfriend jeans and oversized shirts that ruled 2021, low-rise jeans are making a comeback in the industry.

Archana Puneeth, Designer and Founder, Archana and Puneeth says the rebirth of low-rise is met with visceral backlash, the trend is making a comeback due to Instagram TikTok and millennial fashion.

Currently #lowrisejeans has over 34.6 million views on the video sharing platform.

The low-slung denim is returning with a better, body-inclusive point of view. They are no longer exclusive to a certain few skinny girls and the silhouette is now as fuss-free and oversized as it is low-waisted, adds Puneeth.

Divya Boppana, a fashion influencer, feels low rise jeans are making a comeback due to fashion shows happening across the world.

The launch of low-rise jeans by brands like Prada and Mui Mui has restarted the trend.

Rukshar Hairdry, another influencer adds, high-rise jeans aren’t for all body types. So, there needs to be a wide acceptance of what is likeable.

Whatever makes diverse people comfortable, becomes the trend eventually.

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01 February 2022, Mumbai:

Showing their solidarity with small sellers in India, Reliance Industries recently urged the Union government to introduce stricter norms to treat small sellers indiscriminately against e-commerce biggies Amazon and Flipkart.

For years, global e-commerce marketplaces Amazon and Walmart have been discriminating against smaller players by onboarding sellers with larger market share on their platforms.

To discontinue this practice, the government passed a regulation in 2016 disallowing any seller from having more than 25 per cent sales on an ecommerce platform.

Government steps up norms to end foreign dominance

In 2019, the government had passed a law disallowing ecommerce platforms from owning significant stakes in seller firms.

This led to Amazon reducing its stake in Prione, the parent of Cloudtail to 24 per cent. In 2021, the American e-commerce company acquired a few shares of Catamaran Ventures, which owns a 51 per cent stake in Prione.

If Amazon acquires Catamaran completely, it would automatically own 100 per cent of Prione. However, according to new government regulations, global marketplaces cannot own stakes in seller companies.

They are confronted by domestic retailers including Reliance and Tata. Currently, Amazon and Walmart own 90 per cent of the Indian e-commerce market. This kind of market share is not available to them even in their home country. The e-commerce markets of most countries are dominated by domestic retailers.

Hence, Indian conglomerates are desperately trying to reduce the share of American retailers. Their argument about giving sellers a level-playing ground is actually an excuse to oust global biggies from the domestic market, points out a leading consulting company.

Stricter norms for foreign e-commerce companies

Policymakers too are helping protect Indian e-commerce market by introducing stricter norms for foreign companies. They have debarred MNC companies from retailers their own brands on marketplace.

However, Amazon and Flipkart continue to hold stakes in certain home care, personal care and other brand categories. These brands have not yet been identified by regulatory bodies, says retail expert.

Amazon and Walmart have also picked up stake in various Indian companies through their investment arms. For instance, Flipkart owns a minority stake in Aditya Birla Fashion while Amazon holds a share grocery retail chain, More and Future Group.

Network to standardize onboarding on retailers

To deal with these discrepancies, the department for promotion of industry and internal trade (DPIIT) is building an open network for digital commerce (ONDC). The network aims to not just curb digital monopolies but also standardize the onboarding of retailers on ecommerce sites.

Recently, many direct-to-consumer brands decided to quit Amazon and Walmart marketplaces as their brands were not being given fair treatment.

Many of these brands complained about the higher transactions fees on the platform to ensure brand visibility and customer interaction on the platforms.

They had to pay 40 per cent commission to sell their products on the platform besides incurring advertising costs. Though, many of these brands have shifted focus to D2C market, they may not be able survive due to dominance of Amazon and Flipkart in the Indian e-commerce market.

Hence, retail biggies like Reliance and Tata Group are using lack of level playing field as a pretext to oust Amazon and Flipkart, as per a retail industry expert.

How they succeed in their venture and how Amazon and Flipkart hold ground against Indian competitors, needs to be seen.

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