D2C competition is more intense than traditional proficiency
Page Industries, India’s biggest innerwear firm, said direct-to-consumer companies could be a serious competition compared with traditional and established rivals, as consumers, especially younger generations, are increasingly shifting to smaller and agile brands due to a better connect and social media influence.
“We feel D2C can be a more serious competition than the traditional competence because of the aspiration of that age group, social media, the kind of connection which resonates with their thinking as well as the agility,” said VS Ganesh, managing director at Page Industries that runs the Jockey and Speedo stores in India. “No D2C brand may become 1,000 crores, but there can be 20 such brands who can nibble away your business unless you plan today. And while you are looking at your core, you also need to have a vehicle as good as those brands.”
The Indian innerwear market, worth $6.3 billion, is estimated to account for 9% of the total domestic fashion retail segment but is highly fragmented and unorganised. Once known as merely an essential wear, the segment saw work-from-home and hybrid work culture along with increasing awareness on health, fit, and personal hygiene amid the pandemic, coupled with the growing millennial customers, driving growth of the market, said the company.
Big firms including Aditya Birla Fashion & Retail (ABFRL) and Reliance Retail have recently upped their aggression in the premium innerwear segment, which is by far dominated by Page Industries that controls more than half the organised market.
In fact, ABFRL last month said it would cross Rs500 crore revenue in the innerwear segment this year and was targeting Rs1,500 crore by FY26. Earlier this year, Reliance acquired online lingerie retailer Clovia, its third acquisition since taking stakes in Zivame and Amante over the last two years. Over the past few years, a host of digital first brands including XYXX, Damensch, Almo, Bummer and Freecultr have also seen a surge in sales, especially after Covid, helped by the athleisure trend.
“All of the competition in one voice will say the next growth engine is in innerwear and the market is underpenetrated and has a huge potential. All the startups know that and they see the sweet spot in terms of the opportunity. We will be complacent if we neglect that,” said Ganesh, adding that its mono-brand website already generated Rs100 crore of annual business, one of the highest in the segment. “Our trajectory in terms of growth and richness of our product innovation, we are on track to be India’s Victoria’s Secret, which is our aspiration,” he added.
Page Industries posted sales of Rs3,900 crore last fiscal year, and had 1,191 exclusive brand outlets and 15 manufacturing units at the end of the last quarter. Innerwear accounts for half its sales, while categories including kids wear, athleisure and swimwear account for the other half.
Online currently accounts for 18% in fashion and is expected to grow three times faster than offline. By 2026, online could account for more than 25% of sales in the fashion and lifestyle categories, according to a Redseer report.
“Over the next four years, many traditional brands will have the opportunity to up their online game, or they will be victims of brands with high digital penetration sweeping the online market. Traditional players, particularly in FMCG and fashion, recognise the opportunity and the challenge, and they have been preparing to compete online,” said the report.
Some of their strategies include acquisitions of digital brands, launching their own digital brands targeting specific customer cohorts and strengthening D2C capabilities while still pushing ahead with their brands and aiming to get higher shares online.
“We like Page Industries’ efforts to find new avenues for growth — kids and athleisure range along with penetrating the rural markets. Besides, our checks suggest good demand for women’s innerwear. Focus also continues on expanding distribution across segments and channels,” said a recent investor note by ICICI Securities.