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Levi's India Limited
Banking on 'Young India'
Having met with management today at our 15th Annual India Investor
Conference in New Delhi, these are some of our takeaways...
„India has potential to be Top 4 market for Levi's
Indian demographics provide a huge growth opportunity as Levi's target audience
is the 35% Indian population that is below 25 years of age and spends INR9bn
each day. Conservative estimates suggest branded apparels could be US$12bn
category and jeans will be an important part of it. As earnings and spending rise,
the opportunity also lies in converting customer of unorganized trade (93% of
denim sales in India) to branded products. The key growth drivers for this rapid
growth are likely to be rapid digitization, new mall developments, entry of global
brands and rise of modern trade shaping consumer behavior suitably.
All round growth strategy to help achieve the goal
Levi's has doubled its sales in India over last three years. To continue such
growth momentum, it is focusing on more than doubling their current store count
through Master Franchisees by 2015. Also, specific collections are being
launched to attract women which are still users of ethnic wear. Presence over last
15years in India has given valuable insights on changing lifestyle, attitude,
spending habits and tastes and preferences of youth. The company believes this
gives it an edge over competitors that have failed to adapt to India-specific
conditions.
Challenges abound but solutions are possible
Low pricing power, lower acceptance of western dressing especially among
women, lack of distribution beyond top 6-10 towns, weak analytic services, high
waste inventory management costs, large unorganized segment and dearth of
experienced franchises are key hurdles for rapid growth. However, through
investments behind analytics, inventory management, talent development and
making India the sourcing hub for manufacturing and backend services, the
company is confident of managing these challenges.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Levi's India Limited
Banking on 'Young India'
Having met with management today at our 15th Annual India Investor
Conference in New Delhi, these are some of our takeaways...
„India has potential to be Top 4 market for Levi's
Indian demographics provide a huge growth opportunity as Levi's target audience
is the 35% Indian population that is below 25 years of age and spends INR9bn
each day. Conservative estimates suggest branded apparels could be US$12bn
category and jeans will be an important part of it. As earnings and spending rise,
the opportunity also lies in converting customer of unorganized trade (93% of
denim sales in India) to branded products. The key growth drivers for this rapid
growth are likely to be rapid digitization, new mall developments, entry of global
brands and rise of modern trade shaping consumer behavior suitably.
All round growth strategy to help achieve the goal
Levi's has doubled its sales in India over last three years. To continue such
growth momentum, it is focusing on more than doubling their current store count
through Master Franchisees by 2015. Also, specific collections are being
launched to attract women which are still users of ethnic wear. Presence over last
15years in India has given valuable insights on changing lifestyle, attitude,
spending habits and tastes and preferences of youth. The company believes this
gives it an edge over competitors that have failed to adapt to India-specific
conditions.
Challenges abound but solutions are possible
Low pricing power, lower acceptance of western dressing especially among
women, lack of distribution beyond top 6-10 towns, weak analytic services, high
waste inventory management costs, large unorganized segment and dearth of
experienced franchises are key hurdles for rapid growth. However, through
investments behind analytics, inventory management, talent development and
making India the sourcing hub for manufacturing and backend services, the
company is confident of managing these challenges.
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