Veena Chattaraman
Assistant Professor,
Department of Consumer Affairs,
Auburn University

Dr. Veena Chattaraman received her Ph.D. from the Department of Consumer Sciences, the Ohio State University, in 2006. Her expertise lies in product and marketing research with an applied emphasis on the apparel industry. Her research program has focused on the social-psychological and cultural aspects of consumer behavior and preference formation for products. Current research topics include product preference analysis, ethnic (Hispanic) consumer behavior, and emerging technologies (virtual reality) and consumer behavior. Dr. Chattaraman has authored several research articles, which have been or are being published in the Journal of Business Research, Psychology & Marketing, Journal of Consumer Behaviour, Journal of Fashion Marketing and Management, and Clothing and Textiles Research Journal.

The steady growth of the Indian economy as a result of foreign direct investment has resulted in increasing disposable income among single- and dual-income households. This trend has driven the growth of India’s middle-class population in the 25- to 35-year-old age group and provided an increased propensity to spend.

The resultant increase in consumer spending has stimulated the growth of the Indian retail industry, and for three years in a row India tops the Global Retail Development Index (GRDI) as one of the most attractive nations for international retail investment (A.T. Kearney, 2007). According to the GRDI, India leads other nations such as Russia and China in retail potential, and the Indian retail sector is expected to reach $427 billion in 2010 and $635 billion by 2015 (A.T. Kearney, 2007).

Modern/organized retail constitutes two to three percent of this market and is expected to grow from $8 billion to $22 billion in 2010 (A.T. Kearney, 2007). According to this report, modern retail is being readily adopted in the Indian market due to the growth of the young professional segment with high disposable incomes and the propensity and willingness to spend for speed, variety, and convenience. As a result, numerous luxury retailers and international brands such as Tommy Hilfiger, Calvin Klein, Esprit, Louis Vuitton, and Swarovski have invested or are investing in India through single-brand retail.

The Indian Male Consumer

The Indian menswear market is expected to grow by 40.6 percent to a forecasted a value of $13.8 billion in 2012 (Datamonitor, 2008). In fact, men’s apparel constitutes 46 percent of the total ready-made apparel market in India, whereas women’s apparel constitutes only 17 percent of this market (Cygnus Business Consulting and Research, 2004). This is due to the fact that women in India continue to prefer traditional dress that is tailored for them as individuals for most usage contexts including work, social, and formal contexts, whereas men in India prefer Western dress for the above.

As a result, men’s clothing is the strongest category in most department stores (Batra and Niehm, 2009), and they display a larger variety of domestic and international brands. Among average-income male consumers, brand awareness is moderate, brand loyalty is low, and retailer loyalty is high (Datamonitor, 2008).

However, for the affluent male consumer, clothing is reflective of lifestyle and social status, and prestige-linked advertising is very successful in creating aspirational value in the consumer’s mind (Datamonitor, 2008). Awareness of luxury brands is also very high in this segment due to significant overseas travel and propensity for conspicuous consumption (Economist Intelligence Unit, 2005). International products/brands carry symbolic meanings in India and enhance emotional rewards for the consumer, and emotional rewards have been found to significantly predict purchase intent for both local and international brands among Indian consumers (Kumar, Lee, and Kim, 2009).

With respect to apparel selection, six influential factors including brand consciousness, quality assessment consciousness, discount and bargain consciousness, design and style consciousness, price and custom-stitch consciousness, and size specification consciousness explain 64 percent of the variance in Indian consumers’ selection of apparel (Mohan and Gupta, 2007). Male Indian consumers are best represented by two brand-oriented clusters, namely discount-oriented brand seekers and quality assessment-oriented brand seekers.

The Indian Female Consumer

While Indian male consumers’ apparel selection is significantly influenced by brand-related criteria, Indian female consumers demonstrate an equal degree of disinterest in brands (Mohan and Gupta, 2007). As previously mentioned, women in India continue to prefer traditional dress for most usage contexts including work and social/familial contexts. Due to the slow shift in consumer adoption of Western apparel, gaining market share in the womenswear segment has posed a challenge for international apparel brands and retailers (Batra and Niehm, 2009). Indian ethnic garments and garments mixing ethnic and western styling dominate the ready-to-wear market for Indian women. International retail firms in this sector face competition from numerous local designers, and to be successful they need to offer a culturally relevant product that is connected with Indian tradition.

A recent survey of Indian women employed in the IT sector revealed that although a majority of women preferred to wear a mix of traditional Indian, Indian-inspired, and Western apparel to work, Western apparel was the main preference at home or during casual gatherings with friends (Halepete and Chattaraman, 2008). However, according to the same study, during social and family gatherings a majority of the women preferred traditional Indian apparel. Studies have also found a paradigm shift in these preferences with working women demonstrating a greater preference for branded Western and Indo-western apparel in recent years (Cygnus Business Consulting and Research, 2004). Researchers are hence proposing that international retailers who address the needs of professional women in India will demonstrate greater profitability (Batra and Niehm, 2009). However, this proposition needs to be verified through market data.

With respect to factors influencing apparel selection, Indian female consumers are best categorized as style-design seekers represented through three clusters (Mohan and Gupta, 2007). These consumers frequent designer boutiques and are willing to buy from small and less well known boutiques owing to their quality assessment consciousness. With respect to shopping behavior, these consumers often shop alone and for extended durations (Mohan and Gupta, 2007).

Retail Preferences of Indian Consumers

While disposable incomes have been growing among middle-class Indian consumers, disposable time has been on a decline, or as one author put it, Indian consumers are “money-rich” and “time-poor” (Sengupta, 2008). As a result, consumers prefer different retail formats than they did a few years ago. There has been a growing patronage of hypermarkets such as Big Bazaar and Subhiksha, since consumers find all categories of products including food, groceries, garments, home appliances, durables, toys, cosmetics, toiletries, and books in these stores (Srivastava, 2008). Department stores are also a popular format among Indian consumers since these are viewed as one-stop shopping that provide the right blend of novelty, variety, ambience, entertainment, and convenience to the shopper (Srivastava, 2008).

When evaluating retail stores, five main factors account for 65 percent of the variance in a survey related to store selection criteria. These factors include:

1. attractive indoor and window displays;
2. specialty, popularity, and credibility;
3. repeated customer satisfaction and reward;
4. personalized assistance, attention, and service; and
5. travel and shopping convenience (Mohan and Gupta, 2007).

Findings from this study revealed that personalized attention and service is the most important factor with 69 percent of consumers citing it. Specialty, popularity and credibility are next in importance with 62 percent of consumers citing this factor. Travel and shopping convenience is ranked third in importance and is a reflection on the paucity of time in the lives of Indian consumers. Repeated satisfaction and reward is next in ranking, and loyalty incentive programs are increasingly being implemented by modern retailers to address this factor. Display is ranked fifth, but it is an important factor for a large segment of female consumers, particularly those in the age group of 20–30 years (Mohan and Gupta, 2007).

Although the factor of ambience did not emerge as important in the above study, retailers are increasingly emphasizing ambience since shopping constitutes a social event and a form of entertainment for Indian consumers.

In conclusion, the changing Indian demographic resulting from the growth of the middle- and upper-class professional segments has transformed the landscape of consumption and retail in India. Retailers are continually developing new products, brands, formats, and services for the evolving needs of Indian consumers, and this trend is likely to continue well into the future. Indian consumers present a tremendous market opportunity for international retailers, but along with this opportunity comes the challenge of understanding cultural nuances and strong links to tradition that are unique to this consumer. Success of international apparel brands in India may lie at the heart of adaptation and cultural authentication of western style so that they resonate on an emotional level with the Indian consumer.

References

1. A. T. Kearney. 2007. Growth opportunities for global retailers: The A. T. Kearney 2007 Global Retail Development Index. Retrieved March 6, 2008, from http://www.atkearney.com/images/global/pdf/GRDI_2007.pdf.

2. Batra, M. and L. S. Niehm. 2009. An opportunity analysis framework for apparel retailing in India. Clothing and Textiles Research Journal OnlineFirst. Retrieved March 17, 2009 from http://ctr.sagepub.com/cgi/rapidpdf/0887302X08327360v1.pdf.

3. Cygnus Business Consulting and Research. 2004. Executive summary of apparel retailing in India. Retrieved March 6, 2008, from http://www.cygnusindia.com/Industry%20Insight-Apparel%20Retailing%20in%20India-Executive%20Summary%20&%20TOC-March%202004_.pdf.

4. Datamonitor. 2008. Menswear in India: Industry profile. Datamonitor Industry Profile, 1–25.

5. Economist Intelligence Unit. 2005. Splashing out: Major international retailers are seeking to cash in on the growing market in India for branded luxury items. Country Monitor, 5.

6. Halepete, J. and V. Chattaraman. In Press. Apparel preferences and perceptions of international apparel brands among Indian women in IT: An exploratory study. Proceedings of the 65th Annual Conference of the International Textiles and Apparel Association, Schaumburg, Illinois.

7. Kumar, A., H.-J. Lee and Y.-K. Kim. 2009. Indian consumers’ purchase intention toward a United States versus local brand. Journal of Business Research, 62:521–527.

8. Mohan, R. and C. Gupta. 2007. Consumer preference patterns in apparel retailing in India. Proceedings of the Fourth Asia Pacific Retail Conference, Bangkok, Thailand. Retrieved March 17, 2009 from http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.120.6508&rep=rep1&type=pdf#page=223.

9. Sengupta, A. 2008. Emergence of modern Indian retail: A historical perspective. International Journal of Retail and Distribution Management, 36(9): 689–700.

10. Srivastava, R. K. 2008. Changing retail scene in India. International Journal of Retail and Distribution Management, 36(9): 714–721.

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