Rajesh Masand
President Clothing Manufacturers Association of India
The consumer demand is increasing
Established in 1963, the Clothing Manufacturers Association of India, or CMAI as it is more popularly known, is perhaps the oldest and largest trade association representing the interests of the domestic garment sector. It has over 4,000 members and services close to 20,000 retailers. It has a wide spectrum of membership which ranges from the micro units of less than ₹2 crore, going up to all the largest corporates in the country, as well as international brands such as Levi’s and Pepe. In a conversation with Fibre2Fashion, CMAI President Rajesh Masand shares his viewpoint on the domestic apparel market.
What are your key takeaways from the textile and apparel industry developments in 2021?
The revival of our apparel exports would rank as the most significant takeaway from 2021. Admittedly, 2020 would hardly be the appropriate reference point to assess our performance in 2021, but even if one were to compare it with 2019, Indian apparel exports are seeing a positive growth after a long time. It is important however to keep in mind the roadblocks on the horizon before we start celebrating; the skyrocketing raw material prices, the container shortage, spiralling fuel costs are some of the possible party spoilers. The full impact of these would be seen only in 2022, so whilst I am optimistic, I would not say we have turned the corner.
The domestic industry’s turnaround is another key development of 2021. For the first time since the COVID-19 pandemic hit the world in early 2020, we are seeing major positivity in the consumer psychology. The festive season, typically spanning from August to December, has seen an extremely good sentiment in the marketplace. Most brands have crossed the sales of the corresponding season in 2019 or have at least come close to it. Of course, here too we must not go overboard in our reactions since the continued reports of the so-called 3rd wave persist, and act as a damper to sentiments.
Does 2022 seem to be as uncertain as 2021? Which factors would you rank as of topmost concern?
Increasing raw material costs, and the possible change of rates in GST makes the 2022 scenario far more concerning than expected. In the domestic sector particularly, it is unfortunate that the government has chosen to disturb the market at a time when the industry is just coming out of a nearly 2-year long recession, largely caused by the pandemic.
By when do you expect the challenges of shipping industry to ease?
I expect the shipping issues to get back to normalcy around mid-2022.
Do you expect any significant movement in textile and apparel supply chains in 2022 due to the geo-political scenario, particularly the US-China tensions?
Neither the US nor China can afford to take the dispute too far beyond a level. Sure, there will be some resistance to China and Chinese products even amidst consumers. But in reality, both countries need each other equally. So, whilst I see some impact of the current tensions, I do not see a long-term change in the fundamental structure of the association.
However, what could bring about a further shift is China’s own desire to move away from labour intensive industries such as apparel.
On the demand side, do you expect a significant pick-up beyond pent-up consumption in 2022, without government support?
The consumer demand is increasing, and at least the domestic industry does depend on government support for its growth. However, I sincerely hope the government does not “disincentivise” the industry by taking some controversial decisions.
Following the recent COP26 meeting and given the textile industry’s influential role in climate change, what major developments do you expect in 2022?
I think most of the leadership of textile Industry has finally accepted the fact that the industry has been a culprit as far as environment damage is concerned. And as they say, acceptance is the first step towards correction. Thus, I do see a major shift from indifference to consciousness in 2022, and hopefully significant corrective actions going forward.
Related to this, would you say brands will increasingly start focusing on sourcing with sustainability/ethics as a factor?
Absolutely. The enthusiastic response to the CMAI – RISE SU.RE project is testimony to the fact that brands have woken up to their responsibilities, and we are likely to see an increasing focus on sustainability and ethical behaviour in the coming years.
Will we see greater technology adoptions in 2022 to solve transparency and traceability issues in the supply chain?
Traceability and transparency are basic requirements in any movement towards a more responsible work culture, and these are bound to be paid more attention to in future.
Energy prices are currently a major concern across the world. How do you see them continuing and what business strategies can we expect to cope with them?
I don’t think strategies of the apparel industry will be very different from the other industries when it comes to conservation of energy is concerned; though unlike the textile industry which is a much larger consumer of energy, the apparel industry is not a huge consumer of energy, and therefore may not be as impacted as some of the other industries.
Lastly, any changes in the textile and apparel business model that you expect?
As far as apparel is concerned, I see a significant change in terms of reduced inventory, reduced credit, and greater emphasis on profitability. I also see a come down in the sale or return model, which I think has played a major role in killing the brand profitability in recent times. I am also hoping against hope, that the share of goods sold on discount will come down.
Published on: 19/01/2022
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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