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Industry encouraged by US foray

Segment finds good response in first trade show on east coast, as part of effort to step up presence in US market

Indira Kannan  |  Toronto 

Worried about the slowdown in the European market and looking to expand the American market for Indian apparel, the industry’s export promotion group staged its first trade show in New York this week.

The two-day show organised by the Apparel Export Promotion Council, ending Tuesday, brought 35 exporters from across India to showcase their Fall/Winter 2013-14 collections.

Europe currently accounts for half of India’s annual apparel export of around $14 billion (Rs 75,000 crore); America takes a quarter. AEPC chairman A Sakthivel, in New York for the trade show, acknowledged in an interview with Business Standard that India’s apparel export in financial year 2012-13 would show little growth over last year, attributing it to sluggishness in Europe. However, exports to the US are also likely to remain static, around last year’s level of $3.2 billion (Rs 17,150 crore).

In the US, India’s apparel exporters have usually attended the Magic Market Week, considered the industry’s premier trade show, held in Las Vegas twice each year, in February and August. AEPC now wishes to step up its presence on the east coast, too. “East side buyers don’t come to the Magic show much. So, we thought now that the American economy has also slowly started picking up, let us do it in New York,” said Sakthivel. He also noted that with buyers cutting costs on travel, Indian exporters increasingly needed to come to the US to market their products. They also want to reach out to smaller and medium-level buyers, who don’t have their own sourcing operations in India.

A little over 200 buyers attended the show, said Sakthivel, who estimates it generated $40-50 million (Rs 215-270 crore) of orders. Those who had registered even before the show opened included big names such as Ralph Lauren, Lord & Taylor, Nautica and The Children’s Place. Satisfied with the response, AEPC plans to turn the trade show into an annual affair in New York.

The American market is split between the two coasts, with basic and mid-fashion orders coming mostly from the west coast and chain stores; the east coast buys mid-fashion and expensive items. “The advantage with America is that they buy bulk, not like other countries; here, there are a lot of chain stores. The quantity per sale is more in America than any other place,” says Sakthivel.

India accounts for around eight per cent of US apparel import. While China is still the leader, production and labour costs are rising there and Vietnam and Cambodia are emerging as strong exporters. According to Sakthivel, the advantages offered by India continue to be cost control and quick turnaround. “Earlier, they (buyers) started six months in advance and didn’t mind keeping the stock, inventory and all. Now, with cost control and inventory control, they want a product within two months of order. This India is able to do fast because we have all the raw materials. Quick delivery, with a good quality and good design capability, is available in India,” he said.

Along with a higher profile in the US, bringing down the share of Europe is now a priority for AEPC. It aims to lower the share of export to Europe from 50 per cent to about 40 per cent, with a corresponding 10 per cent increase in non-traditional markets such as South America, South Africa, New Zealand and Japan.

When inaugurating the apparel trade show, India’s ambassador to the US, Nirupama Rao, noted the industry back home had implemented measures to help manufacturers become more socially and environmentally responsible through its DISHA (Driving Industry towards Sustainable Human Advancement) programme.

First Published: Sat, February 02 2013. 00:40 IST