“This report is largely focusing on the apparel retailers. The growth will differ across different sectors. But if we have to focus, we talk about the organized apparel retailers, the timing of this GST rate cuts really works in favour of this industry,” she said.
According to her, the combination of easing food prices, softer inflation, and buoyant festive demand has turned consumer sentiment decisively positive. “Put together what we believe is all of this should comfortably add about 200 basis points to the revenue growth of organized apparel retailers, keeping their revenue growth steady at 13% to 14% range this fiscal,” she noted.
On which segments within apparel retail are likely to lead the charge, Upadhyay said the gains will be broad-based but will play out differently across players. “Definitely larger players with stronger brands and wide reach will capture the demand much faster, especially in the mid-premium and fast fashion segments,” she explained.
However, she also pointed out that smaller organized retailers will benefit too. “This GST cut also improves the price parity for smaller organized retailers. This should help them draw more consumers from the unorganized space,” she added, predicting that while the impact may show up faster for the bigger brands, the uplift will eventually spread across the organized market.
On whether the GST cut could shift demand toward online platforms, Upadhyay said the impact would be fairly balanced. “That is something which will continue. It will be a mix of both that will keep coming in, be it from a footfall perspective or for that matter the online one. It is going to benefit almost everyone, this GST revision,” she said. When asked about rural versus urban trends, Upadhyay noted that the demand uptick will likely be across the board. “The rationalization of 5% that has happened versus the earlier dual structure of 5% and 12% has widened the consumer base,” she observed. She added that the reduced price gap between fast fashion and mid-premium products is making branded wear more accessible. “The branded wear has now become accessible to even the value-conscious consumers which indeed is improving price competitiveness. This should help draw more shoppers from the unorganized markets,” she said.
Upadhyay emphasized that the impact will be particularly visible in smaller towns. “This is something which will be more visible in the tier II and tier III cities where affordability definitely matters the most,” she concluded.
In essence, the GST rate cut, coupled with improving consumer sentiment and a strong festive tailwind, could make FY25 a year of steady, broad-based growth for India’s organized apparel retail industry.
