RETAIL INDUSTRY

The retail industry is a sector of the economy that involves the sale of goods and services to consumers
for personal use. It encompasses a wide range of businesses, from small local shops to large
multinational corporations. Retailers act as intermediaries between manufacturers or wholesalers and
end consumers, providing a platform for products to reach the market.

2.1 HISTORY

Clothing, footwear, and accessories are designed, marketed, manufactured, and sold in the fashion
sector. People used to make clothes for themselves before the apparel business was established
themselves. As the world changed, so did the industry, which was created to oversee the process for
consumers. Clothing began to be mass-produced in the mid-nineteenth century. When some
manufacturers started making garments that didn't require a fitting session with a professional, a tailor
or a sewer Fashion did not establish itself as an industry in the traditional sense until the nineteenth
century, when informal networks of neighbourhood tailors emerged into the manufacturing industry
During World Wars I and II, factories flourished out of new era. Although mostly led by European
fashion houses, changes in the fashion business and the establishment of designers as arbiters of
taste began to take shape in the early half of the century. Now, the fashion industry is a multibillion-
dollar global business dedicated to the creation and sale of clothing. Some commentators distinguish
between the fashion business (which produces "high fashion") and the garment industry (which
produces "mass fashion"), but the lines between them had blurred by the 1970s.

There may appear to be distinctions between the high-end designer clothing seen on the runways of
Paris or New York and the mass-produced sportswear and streetwear marketed in malls and markets
around the world. The fashion industry, on the other hand, includes the design, manufacture,
distribution, marketing, retailing, advertising, and promotion of all types of apparel (men's, women's,
and children's), ranging from the most exclusive and expensive haute couture (literally, "high sewing")
and designer fashions to everyday clothing. The fashion industry is a modern-day product. Prior to the
mid-nineteenth century, almost all clothing was created by hand for individuals, either at home or on
order from tailors and dressmakers. Clothing had increasingly become mass-produced in standard
sizes and sold at fixed prices by the beginning of the twentieth century, thanks to the rise of new
technologies such as the sewing machine, the rise of global capitalism and the development of the
factory system of production, and the proliferation of retail outlets such as department stores. Although
the fashion industry began in Europe and America, it is now a worldwide and international enterprise,
with items designed in one country, manufactured in another, and sold in a third. An example would

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be a An American design house might acquire fabric in China and have the garments made in Vietnam,
completed in Italy, and transported to a warehouse in the United States for distribution to worldwide
retailers. The fashion business has long been a major employment in the United States, and it continues
to be so in the twenty-first century. However, as production shifted elsewhere, particularly to China,
employment fell dramatically. Because statistics on the fashion industry is often supplied for national
economies and described in terms of the industry's many distinct segments, obtaining aggregate
estimates for global textile and garment production is challenging. By any estimate, though, the
industry accounts for a large portion of global economic production. The fashion industry is divided
into four levels: raw material production (mostly fibres and textiles, but also leather and fur); fashion
items production (by designers, manufacturers, contractors, and others); retail sales; and various forms
of advertising and marketing. These levels are made up of a number of distinct but interconnected
sectors, all of which are 7 dedicated to meeting customer demand for clothes under conditions that
allow industry players to make a profit.

The Indian retail market is predicted to rise by 6% year on year to USD 865 billion by 2023, up from
USD 490 billion now. Apparel accounts for 8% of the retail market in India, with a market value of
USD 40 billion. The increased need for fashion accessories, in addition to fashion garments, makes
the Indian fashion sector both attractive and lucrative. In recent years, the Indian fashion retail sector
has seen a number of interesting changes and challenges, all of which are signs of the country's
evolving fashion retail business.

Source: India briefing Figure:1(Indian Retail Market)

To keep up with the increasingly competitive retail scene, Indian fashion firms are continually
reinventing themselves. When it comes to the money generated per square foot in physical stores,

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there is now a greater emphasis on productivity. As a result, fashion firms are examining their shop
networks and doing structured research on location, rentals, and revenue creation. There has been a
lot of change in the last ten years. Despite a rise in the number of malls, there is still a scarcity of good
retail space. As a result of the scarcity of great retail real estate developments in India, fashion retailers
are now fighting not just for consumer wallet share, but also for prime real estate space. In recent
years, there has been a tremendous growth in demand for high-quality retail spaces in strategic
locations. Over the last decade, the number of stores in the premium and high-end fashion segments
has increased dramatically in Indian shopping malls. However, merchants must now grasp the
importance of customizing product offerings and formats across distinct micro- markets more than
ever before. We've found that what works in one region's retail centre may not function in another.
Depending on the location and catchment, there are also differences in the type and positioning of
brands within the fashion section among distinct malls. In other words, fashion retailers' real estate
strategies are tailored to micro-markets, taking into account the buying inclinations of potential
customers. Newer forms that incorporate technology and improve the shopper experience have been
conceived to cater to ambitious and sophisticated consumers. Rather than being merely business-
oriented, retailers have become more relationship and experience-focused.

2.1.1 MARKET REVIEW

Consumer preferences are changing dramatically in India, which is one of the world's fastest
developing economies. The country's corporatized retail is being driven by rising disposable income,
brand awareness, and a growing population of tech-savvy millennials. In comparison to other
developing economies, India's retail sector has seen long -term growth. The garment business in India,
which is the second greatest contributor to the retail industry after food and grocery, is undergoing
significant changes. India has become a highly attractive market due to the entry of foreign brands,
shifts in consumer preferences from non- branded to branded products, the country's fast-growing
economy, and big young consumer population. India has the world's largest youth population, which
is becoming more fashion conscious as a result of increased access to mainstream media and social
media. This has created hitherto unimaginable retail market opportunities. The Indian fashion business
is a leader in the retail sector, with a promising growth rate of 9.7%. Within the retail categories,
clothes have shown a rather high level of openness to corporatized retail. The widespread adoption
of corporatized retail in the apparel industry has prepared the way for more formal and systematic
operations, procurement, and distribution processes and procedures. As a result, the clothing 18 retail
market has been able to capitalize on the benefits of modern management principles, resulting in
greater product offerings, improved customer management, and scientific supply chain management

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procedures. Apparel retail is predicted to continue to see greater corporatized retail penetration outside
of major urban clusters, as well as a rise in demand for branded apparel. The Indian garment market
is divided into three categories: men's wear, women's wear, and children's wear. Men's clothing
currently accounts for the majority of the garment market.

• Men’s Wear

Shirts, trousers, suits, winter clothing, t-shirts, denim, daily wear, active wear, ethnic, innerwear, and
other products are among the different product categories in the men's wear segment. Shirts are the
most popular men's clothing item, followed by trousers and denim. Due to changing consumer
preferences, denim, active wear, and t -shirts have showed promising development in recent years and
are predicted to grow at high CAGRs of 14%, 14%, and12%, respectively.

• Women’s wear

In India, the women's wear market accounts for 38% of the entire garment sector. Globalization has
resulted in a greater understanding of fashion trends and styling as a result of quick fashion.
Furthermore, the rise in the number of working women has fuelled the market for women's clothing.
The Western, fusion, and occasion- specific ethnic dress are predicted to be in high demand. Women’s
Ethnic apparel, western wear, Indo-western wear, innerwear, and other types of clothing are available
in India. With a 66% share of the women's wear market, wear is the single most important category.
The saree is undoubtedly the most popular traditional Indian clothing for ladies, and it has a long
history of around Rs 37,837 crore market.

• Kid’s wear

One of the fastest expanding categories of the Indian apparel business is children's wear. Given the
size of the business, a number of national and international players have entered the market. With 29%
of its population under the age of 30, India is one of the world's youngest countries. A market of less
than 14 years is a prosperous one. As a result of the firms' shift in attention to India, Indian consumers
have profited. Improving quality while lowering expenses is a win-win situation. With rising
disposable income, exposure to global fashion trends, and the entry of foreign brands into the country,
Indians are spending more on children's clothing. The market for children's clothing can be divided
into two categories boy's wear and girl's wear.

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2.2 TYPES OF COMPANIES

The term retail stands for selling goods from a particular location. The role of a retailer in the retailing
process is to act as a mediator between a manufacturer and a customer. As a result, a retailer is also
referred to as a reseller or a middleman who serves as a link between a manufacturer and a customer.
Primary, secondary, and tertiary classes can be used to categorise the retail industry.

2.2.1 ORGANISED SECTOR

The government has registered the organised sector. As a result, it is referred regarded as an organised
sector. People in this industry are guaranteed employment and get regular, fixed income. The organised
sector includes institutions including businesses, hospitals, and schools. Getting your firm properly
registered is a challenging process, making it challenging to join the organised sector. The government
regulates the organised sector and levies the appropriate taxes on it. People who work in the organised
sector enjoy a number of advantages, including a regular pay and job security. They are also given
other advantages like allowances and perquisites in addition to this. Employees in this industry must
work fora set number of hours per day at a set salary, with raises in pay given at predetermined
intervals. Let's now talk about the various organised retail business kinds in the sector one by one.

• Department Stores

The extremely diverse product mixtures seen in department stores define them. In other words, they
sell a wide variety of goods, such as apparel, appliances, and hardware. Typically, each category of
merchandise has its own area or department in the store. The breadth of the product mix varies every
store, but department stores' main selling point is its capacity to offer a broad selection of goods in a
single location. For instance, consumers can purchase household items like dishes and luggage as well
as clothing for men, women, and children.

• Chain stores

The chain store movement was developed during the 1920s.Chains were able to purchase a wide range
of goods at steep discounts because they were so big. When compared to the costs of single unit
retailers, the reductions significantly reduced their cost. Because of this, they were able to cut their
retail prices than those of their tiny competitors and so grow their market share. In addition, chains
were able to draw in a large number of clients due to their handy locations, which was made possible
by their financial resources and knowledge in location selection.

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• Warehouse Retailers

Warehouse stores offer a basic shopping experience at extremely low costs. Retailers who own
warehouses streamline every element of their operations and convey the cost savings.

• Franchises

The franchise strategy combines local ownership with large national corporations. An owner buys a
franchise, which grants her the right to utilise the company's name and business strategy for a
predetermined amount of time. The franchise agreement frequently contains clear instructions,
training, and ongoing assistance for the owner. The local company is created and run by the owner
or franchisee.

• Online Retailing

Online retailing is without a doubt a major force in the retail sector, yet it currently only makes up a
small portion of all retail sales. Many businesses, including Amazon, conduct all or the majority of
their sales online. The buyers who make in-store purchases are significantly influenced by online
marketing. Online orders are driven by catalogues that are distributed to clients' homes in a similar
coordinated strategy.75 percent of buyers who made purchases first browsed the catalogue, according
to a poll conducted by Land's End on its website.

• Specialty Stores

As the name suggests, specialty store would specialize in a particular product and would not sell
anything else apart from the specific range. Speciality stores sell only selective items of one particular
brand to the consumers and primarily focus on high customer satisfaction. Example-You will find only
Reebok merchandise at Reebok store and nothing else, thus making it a specialty store. You can never
find Adidas shoes at a Reebok outlet.

• Automatic Vending

A sale is made without the slightest contact between a seller and a buyer through automatic vending.
The purpose of automatic vending is to make purchases more convenient. Automatic vending
machines are typically used to sell goods from well-known brands with high turnover. The "4 Cs"—
coffee, cold drinks, cigarettes, and candies—make up the majority of what is sold through automatic
vending machines. By bringing customers to places where there are no stores nearby or when they
are unable to visit a store, vending machines are an excellent strategy to grow your business. Schools,

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universities, companies, public buildings, and other locations have vending machines installed.
However, since they must be constantly restocked, operating vending machines is expensive.

• Malls

The mall is one of the most well-liked and frequented retail formats in India. These are India's biggest
retail formats. Everything a person needs to buy is available in malls, all under one roof. Malls offer
all of this and more, from clothing and accessories to food and movie theatres.

• Supermarket

A supermarket is a type of retail establishment that typically offers food items and household goods
that are well organised and displayed in separate departments. A supermarket serves the customer's
household needs and is a modernised version of a modest grocery store. The numerous food items
(meat, veggies, dairy products, juices, etc.) are all tastefully arranged in their respective departments
to draw clients in and encourage them to choose whatever they need or want.

2.2.2 UNORGANISED SECTOR

The government has not registered this industry, and the terms of work there are not regular and fixed.
There are no laws and regulations followed by the government. Since there are no requirements
for registration or affiliation to operate in this industry, starting an unorganised retail firm is simple.
As a result, these enterprises are not subject to taxes. There are no regular or unproductive jobs in this
sector, which consists of tiny businesses and workshops. Low- skilled firms are a part of this
industry. An unorganised firm can operate for an unlimited number of hours every day. Even
employees in these businesses are required to work on the weekends and on official holidays. They
receive daily pay, which are considerably less than the wages. They receive daily pay, which is
considerably less than what is paid in the organised sector because salaries in this industry are set by
the employer rather than by law.

2.3 BUSINESS MODELS IN INDUSTRY

A business model represents the internal logic of a firm. As managing a business entail for a high
degree of complexity, a business model allows managers to visually simplify the inner workflow of
the firm and identify the 9 essential building blocks that bring value to the market. In the fashion
industry, we can additionally simplify this model by a focus on the 4 key factors that set firms apart:
its value proposition, customer segmentation, communication and distribution channels and the degree
of complexity of the firm’s value chain. The core element of a business model is found in the

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connection created by the company’s value proposition or the solution – and the target market – or the
customers the company wishes to help.

2.3.1 Fashion, designers, fashion griffes

This business model is the one adopted by firms wishing to compete on the top tiers of the fashion
pyramid. The business model of these typologies of companies revolves around a value proposition
which is grounded on prestige and exclusivity. Let’s see a selection of the distinctive elements that set
this business model apart: Dream factor and the role of the designer. In order to deliver the dream
factor effect capable of associating aspirational values to a firm’s products, companies use fashion
media to deliver a narrative capable of conveying intangible brand values. This is effectively done by
creating an appeal through the fashion media industry and the press. The figure of the designer in
this context is extremely important as the designer delivers the most persuasive elements of the brand,
and becomes the scale of a firm’s success or failure. A famous example is provided by Tom Ford, who
assisted Gucci in becoming a credible global brand.

2.3.2 Supe Luxury brands

Even if the concepts of fashion and luxury are sometimes used as synonyms, these two concepts stand
for completely different sets of value associations. Luxury is strictly connected to timelessness and
exclusivity. In luxury, the timeless and heritage-sensitive values of a brand can be ‘stretched’ to cover
a wide range of product categories, including watches, cosmetics and leather products. In this case,
we can look more in-depth into the 4 elements of the business model of luxury

2.3.3 Value Proposition

The value proposition of luxury brands consists of allowing customers to set themselves apart from
high-paced trends and fashion fads, by owning iconic pieces of style which will never become old or
outdated. Customer segmentation

Luxury brands ideally focus primarily on customers who are sometimes described with the acronym
HNWI (High Net Worth Individuals). For this type of customers, the price point is uninfluential in the
purchase decision, as they tend to value much more the experiential component of shopping, more
than they value money. This does not mean however those luxury companies are not interested in more
average consumers. As discussed in the post: Market Segmentation in the Fashion Industry, luxury
brands can ‘commoditize’ luxury by their brand equity and applying their brand to other product
categories, to leverage the dream factor effect on a much wider audience. This is what is usually
intended with the term ‘masstige’ or mass-prestige, indicating the ‘democratization’ of luxury goods.

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2.3.4 Communication

Luxury companies revolve around a sense of heritage and tradition which in many cases if more than
a century old. This allows them to promote their products with discretion, by avoiding the ‘buzz’
factor that many other fashion firms need to ignite desire into their customers. True luxury firms do
not even advertise their products, as much as ‘unveil’ them toa selection of exclusive clients. Luxury
companies moreover, when engaged in communication campaigns stay away from promoting a
particular product, as what they focus on is the narrative and heritage of the brand. In the words of
Simon sneak they focus on the Why rather than the What or How. This approach allows them to
further distance their brands from the tumultuous competition of premium brands, in order to deliver
a message connected to passion and purpose.

2.3.5 Distribution

In marketing terms, the distribution strategy pursued by luxury firms is exclusive distribution. In the
luxury segment, companies need to deliver a shopping experience capable of conveying the full
potential of their brand narrative. Directly owned retail is a mandatory requirement for luxury
companies who need to create an environment capable of educating, informing, entertaining their
customers. This is why in luxury, companies develop their market by creating flagship stores, unique
stores, in unique store locations that allow firms to fully deploy the theatrical and educational elements
of the brand. These stores do not focus on sales, as much as in creating a stage, to foster the interaction
between a variety of brand.

2.3.6 Premium Brands

This category of products is more heterogeneous, as it relates to brands which are positioned in the
medium to high price segment. The value of these brands is delivered through a clear brand vision,
capable of connecting the value of the brand to volumes and scales delivered by the manufacturing
industry, and a large network of suppliers. This business model is more associated with a good price
quality ratio which is obtained through product specialisation and production optimisation. fashion
seasonality. A faster supply chain is also achieved by leveraging on two types of distributors: direct
retailers and intermediary wholesalers. The competition in this segment will, therefore, operate on a
variety of levels:

2.3.7 Time to market advantage

Premium brands are required to be responsive to faster fashion trends and will need to be able to
manage their global value chain in order to maintain profitability and a fast time to market. This can

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be done also by creating more standardised globalised products which are able to fit with little to no
adaptation to a wide variety of international markets.

2.3.8 Extensive distribution

Premium brands pursue industrial efficiencies such as economies of scale and economies of
scope. As a result, their distribution strategies are oriented towards obtaining the maximum possible
coverage. This can be done with owned self-standing stores, but it’s also achieved by creating an
extensive wholesale distribution through partnerships with trade customers and intermediaries.

2.3.9 Communication and Advertising

In an inflated and saturated market like the one belonging to premium brands, companies need to
develop effective marketing plans to acquire and maintain market share. In this context, where fewer
quality or heritage values can be drawn, competition is much more reliant on the cool factor and on
celebrity endorsements.

2.3.10 Fast vertical retailers

This business model is connected to companies which pursue the development of speciality chains
with a wide geographical reach. Examples of companies pursuing this business model are Terranova,
Zara, H&M and Top Shop. Their value innovation can be found in the creation of a flow of fashionable
merchandise channelled through an extensive distribution network comprised of stores located in
prime locations. Fast retailers create welcoming stores, with very convenient prices, where their
vertically integrated organisational structure allows them to effectively manage their value chain and
deliver value while achieving a high level of profitability. This typology of a company is, in fact,
capable of collecting margins which would normally pertain to both the fashion producer and fashion
retailer. Other relevant characteristics of vertical retailers include:

• The complete control of the value chain

• The creation of a standardised store concept, where all items are sold under the company brand

• The ability to respond in a timely manner to fashion trends

• The minimisation of sales risks due to efficient value chain management.

By analysing fast fashion retailers, we can see how this business model is very close to the one pursued
by digital businesses distributing their products through e-commerce stores. Fast fashion companies
are designed to manage their pipeline on the grounds of intensive data- driven analysis capable of

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maximising the production of those items which are most likely to sell. Moreover, the high speed of
operations allows for a fast turnover of merchandise. Fast fashion retailers are capable of restocking
inventory every 6 weeks.

2.3.11 Fashion Conglomerates

Since the 90s it has become common practice to grow fashion companies by acquiring promising
brands and designer ateliers. This growth strategy has allowed larger fashion companies to become
fashion conglomerates, managing a wide portfolio of business models and brands. When two
companies enter a buyer-seller relationship both the “acquirer” and the “acquired” gain benefits
making the conglomerate model of growth a viable business strategy in the fashion industry.

2.4 EMPLOYMENT

India's retail sector is one of its economic cornerstones, accounting for roughly 10% of the country's
GDP. India's retail sector is estimated to be over US$ billion, making it one

Of the top five retail markets in the world. The world's most valuable markets in terms of economic
worth. India is one of the world's most rapidly rising retail markets. With 1.2 billion people, itis the
most populous country on the planet.

• Store managers are at the forefront of the retail business as they interact with staff and customers
on the shop floor. You would have general responsibility for meeting sales targets, checking stock
levels, ensuring customers receive good service and keeping an eye on staff performance.
• Buyers are responsible for selecting and purchasing new product ranges that are suitable for a
store’s customers. You could buy for a department, a store or even a whole chain. Duties involve
checking whether products are selling well and bringing in newlines that will be popular and set
your store apart from the competition.
• Merchandisers ensure their departments hit sales targets and make a profit by organising
promotional events and finding the quickest ways to buy the right amount of stock. You would 20
predict which products will be the best sellers, what 29 lines you should stock in the future and
how much money your department will make in the coming months based on how products are
selling.
• Visual merchandisers create striking store displays that draw customers in and boost sales. You
would consider space, lighting and store guidelines while boosting the retailer’s image and brand.

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• Product technologists are responsible for the quality, safety and legality of products and are needed
for a wide range of goods such as clothing, food, electrical goods and toys. You would also be
responsible for creating new products and improving existing ones.
• Fashion designers work for retailers and mass-market design ‘houses’, producing high-street
brands. The role involves drawing sketches, selecting fabrics, creating patterns and samples,
checking which designs are popular, overseeing production and negotiating costs and prices.

2.5 GROWTH

Source: Statista Figure:2(Global apparel market size)

The latest global apparel industry statistics show that revenue from the apparel market is expected to
exceed $1.7 trillion in 2022.This marks significant growth over the past decade or so. In 2013, the
global apparel market size was at just under $1.5 trillion. The global apparel revenue in 2022
represents a 10.59 percent year-over-year increase, a slight deceleration from the 10.85 percent
increase in 2021.But this number must be put into perspective. This growth comes after an 11.8 percent
tumble in 2020 -the largest annual decrease that’s expected between 2013 and 2026.This was a result
of the coronavirus pandemic, which forced consumers worldwide to cut back on spending. Even in
the US, consumer confidence fell to a seven-year low. The biggest cutbacks were for clothing,
expenditure for which fell around four percent in 2020.This is likely a result of the lockdowns
worldwide. As people were restricted to spending more time indoors, there was less need for new
clothes.

However, the apparel market has rebounded and returned to its growth path. From 2021 onwards, total
revenues from the industry are expected to grow year-over-year. In fact, the 2023 forecast for the
market shows that revenues are expected to increase 5.48 percent to hit just over $1.8 trillion.
This marks significant growth for the global apparel market, especially considering that the annual

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average growth rate between 2013 and 2026 is 2.24 percent. Global revenues are expected to surpass
the $1.9 trillion mark in 2025, before rising further to close to $2 trillion in 2026.The global apparel
market is forecast to grow even faster going forward. From 2014 to 2020, the annual revenue growth
rate registered at -0.84 percent. But from 2021 to 2026, the average annual growth rate of the global
apparel market size is projected at 5.83 percent. That’s more than double the growth rate registered in
the three years preceding the COVID-19 pandemic.

2.6 PROSPECTS OF EXPORT

Source: Annual T and an industrial report Figure:3(Projected export market of apparel)

The statement also added that the USA was the top export destination for the nation’s textiles and
apparel shipments and accounted for 27 per cent share. India has recorded its highest- ever textiles
and apparel exports at $44.4 billion, including Handicrafts, in the financial year 2022, indicating an
increase of 41 per cent over FY21 and 26 per cent over FY20, said the Ministry of Textiles in a
statement on Tuesday. The statement also added that the USA was the top export destination for the
nation’s textiles and apparel shipments and accounted for 27 per cent share. European Union stood
second with 18 per cent shipments, Bangladesh was in the third position with 12 per cent and UAE
stands in fourth place with 6 per cent.

"In terms of product categories, the export of cotton textiles was $17.2 billion with 39 per cent share
registering a growth of 54 per cent and 67 per cent during 2021-22 over FY21 and FY20, respectively,"
reads the statement. Export of ready-made garments was at $16 billion with 36 per cent share in FY22,
up 31 per cent against the last year.

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2.7 CONTRIBUTION TO THE COUNTRY

The Indian textile sector is essential to the country's growth story and directly influences the
lives of 45 million people, from delicate and valuable craftsmanship to personal protective equipment.
India is a global leader in textiles, with a complete manufacturing value chain from fibre to garments
and the special benefit of backward integration. In the textile and apparel sector, India has one of the
most open investment rules, allowing 100 percent foreign direct investment (FDI) through the
automatic method. India's domestic textile and apparel market is valued at more than $ 100 billion in
2018 -19, and is predicted to increase at a CAGR of 12% to $ 223 billion by 2021. Apparel demand
in India is presently valued at $ 78 billion, with the domestic market accounting for over 74% of the
total textile and apparel industry.

Source: Team India BlogsFigure:4 (Indian apparel sector overview)

India’s share in global exports is only 4% compared to China 13.75% percent. In addition to
China, other developing countries are emerging as serious competitive threats to India. In this
emerging scenario, wide spread application of technology is required not only to upgrade and innovate
the quality of products but also to reduce overhead costs. The developed countries are focusing on
niche products like protective clothing, clothing for medical use by developing competitiveness in
novel "nanotechnology" coatings, greater Management (PLM) Systems, in order to deliver new "fast
fashion" paradigms, while at the same time remaining steadfastly committed to lower production
costs. The textile industry in the developed countries is also restructuring itself in a manner so as to
take advantage of product innovation. Some of the products, now being developed are jackets that

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cool the wearers down, warm them up, and send out soothing vibrations, textiles with healing and
caring properties and protection from harmful radiation. Intelligent Textiles, Smart Clothing are
receiving unprecedented attention and are in the realm of possibilities.

Immense opportunities are also being seen in the entire gamut of Technical Textiles given the range
and diversity of raw material, processes, products and applications that they encompass. "Technical
textiles" have been breaking new grounds due to their cost effectiveness, durability, versatility, user
friendliness, and eco-properties. In fact, it is estimated that around 40% of all textiles made in
Germany are now covered under the field of "Technical Textiles".

While the developed countries are seeking to upgrade their presence in the textiles and clothing sector
by moving in to the field of technical textiles, the developing countries are equally concerned about
the need to adapt themselves to the changing requirements of the consumers and move up the value-
added supply chain by adopting innovative technologies and redefining the product mix.

A noteworthy feature of these emerging trends in international trade is that the developed countries
even though exiting from direct manufacturing, continue to dominate it by controlling the retail end
of the supply chain. The cost and price structure globally is being characterized by higher potential
for profit from innovation, marketing, and retailing rather than production, assembly, finishing and
packaging. Multiple store retailers are already selling 70% of the clothing in Western Europe and 85%
in the US. The developing countries on the other hand, are becoming manufacturing hubs for textile
products, and are increasingly getting themselves integrated with the global market place and offering
capabilities not only in production capacities, but also in product development and efficient Supply
Chain management. With the removal of the Quota system, in the year 2005, the textile and clothing
industry is undergoing structural changes worldwide with production lines further shifting distinctly
towards low cost producing countries with flexible production systems, to match the growing retail
power.

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