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Consumers in India Becoming More Modern

Cotton Inc. survey shows shifts in buying patterns.

A shopper in India.

With an estimated 1.2 billion consumers, India is home to 17 percent of the world’s population, and a new survey from Cotton Incorporated’s Global Lifestyle Monitor shows an emerging and more discerning consumer base.

A prevailing force in the Indian economy is the rapidly growing consumer segment of young professionals who like shopping and have more disposable income. As a whole, India is still an underdeveloped and underserved retail market, but that is changing, especially for clothing and textiles. Of the total retail market in India, it is estimated that only 3 to 7 percent is organized in such distribution channels as branded specialty stores, department stores and hypermarkets. The rest is considered unorganized, made up of informal stores, independent shops and street markets.

Among all retail segments, the clothing and textiles segment has the highest penetration of organized retailers at about 20 percent of the market. Global Lifestyle Monitor data shows that consumer preference for organized retailers has more than doubled since 2001 to 48 percent from 21 percent. Over time, independent stores have lost share to hypermarkets, while chain and specialty stores have garnered greater customer loyalty and prestige for their product offerings. This shift is a reflection of the influx of foreign, single-brand retailer investment in India’s largest cities, the increasing brand consciousness of Indian consumers and the demand for Western clothing styles.

Indian consumers spend about 9 percent of their household budgets on clothing, compared to 3 percent in the U.S. and 10 percent in China. Survey responses from Indian consumers in five metropolitan cities — Bangalore, Chennai, Delhi, Kolkata and Mumbai — highlight distinct differences in how these urban populations shop and what they buy, but also a strong preference for cotton products. With an established and large textile manufacturing industry, India continues to influence cotton globally at every point along the supply chain, from agriculture and production to retailing and the consumer.

Indian consumers are among the world’s most fiber conscious. When asked to name the fiber best suited for today’s fashions, 91 percent chose cotton, the highest percentage among all countries surveyed. Consumers who say they love or enjoy wearing denim has more than doubled since 2001. Cotton is the dominant fiber at Indian retailers — 85 percent of clothing at Mumbai retailers contained cotton and more than nine out of 10 were 100 percent cotton.

While denim, a cotton staple, is not a mainstay of consumer wardrobes in India, growth in ownership and wearing frequency over the past few years shows significant changes. From 2001 to 2010, the percent of consumers reporting they love or enjoy wearing denim has more than doubled to 29 percent from 13 percent. During the same period, the percentage of Indian consumers purchasing jeans has tripled to 30 percent. Male consumers in India own more denim and wear denim more often than female ones. Indian men reported owning an average of four denim bottoms compared to one for women.

With the increasing brand consciousness of Indian consumers and demand for Western clothing styles, denim’s popularity in India is expected to continue to grow. With India’s recent allowance of direct international investment of multibrand retailers (although they are still restricted to minority ownership), consumers in India can look forward to greater access to international brands, retailers and products.