bric case study

BRIC NATIONS CASE STUDY

Contents Page

Page(s)

1.0 Introduction 4

2.0 Overview of India

2.1 PEST Factors 4-6

2.2 Geographic Structure and Demographics 6-7

3.0 Culture

3.1 Overview of Culture 7-8

3.2 Popular Culture 8

4.0 Fashion

4.1 Key Fashion Capitals 9

4.2 Fashion Industry 9

5.0 Conclusion 10

BA(Hons) International Fashion Promotion Global Fashion Cultures

List of Tables, Figures and Images

Page(s)

Figures

Figure 1 India’s Economy Statistics 5

Figure 2 India’s Population Increase 6

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1.0 Introduction

In 2003, a Goldman Sachs report hypothesized that, by 2050, the BRIC nations (Brazil, Russia, India

and China) would be wealthier economies than those that are currently the major economic powers

(Investopedia, 2015). This is further suggested in the words of Andy Rubin, the Chief Executive of

Pentland Brands, who states that the BRIC markets will be the biggest, and most important

economies during our lifetime (Andy Rubin, 2013). In 2014, the political leaders of the BRIC nations

made an agreement to create a $100bn development bank in which the capital will be split equally

among the countries involved (BBC Business, 2014). As a result of this development, it is clear to

predict that the global influence of BRIC nations will continue to rise (O’Neill, 2014). This information

is a clear indication of the huge global importance of the ever evolving and growing economies of the

BRIC nations, in relation to all aspects of business. Therefore, this case study will further discuss the

cultural influences of one particular BRIC nation, and the impact they may have specifically on the

fashion industry. The BRIC nation that has been chosen for this assignment is India, due to the variety

of cultural influences in this highly populated country.

2.0 Overview of India

2.1 PEST Factors

The PEST analysis is a widely used and effective tool in the business world for analysing political,

economic, social and technological factors that may have an impact on other areas (Arline, 2014). In

terms of utilising this for a BRIC nation case study, it allows us to gain a better and more thorough

understanding of the particular environment that is being studied, and how these factors may affect

the fashion industry, whether it be positively or negatively. As suggested by Luciana Zegheanu,

fashion is influenced and mirrors political, social, economic and cultural changes, and therefore,

fashion is an expression of modernity and sporadically changes and reinvents itself, as other PEST

factors do (Zegheanu, 2014).

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Figure 1


India’s government policies, the interests of politicians and the overall principles of the political parties

are the primary influences on the political environment in India (PESTLE Analysis, 2014). In current

news, there were controversial comments made by the BJP party (pro-hindu), as it is suggested that

they seek mass conversion to Hinduism (The Economist, 2015). It is more than likely that there will be

an effect of this on the sales of saris, pavadas for women and

girls, and Dhotis for men, all in further support for the BJP party.

Recent news shows that for the first time in many years, India’s

economy is becoming more and more stable, with official statistics

stating that GDP grew by 7.5% shown in Figure 1 (The Economist,

2015). Due to the economical reform launched in 1991 in India,

hourly wages were doubled and there is currently a growing

middle class (Pillsbury, 2014), this may result in an increase of

sales in the luxury market resulting in further development for the fashion industry in

India. When relating economical factors to the fashion industry, it is necessary to discuss India’s

spending power being on the rise (Hindustan Times, 2014), this will have a positive impact on fashion

sales due to the Indian youth becoming more fashion conscious and therefore, their money is more

likely to be spent on garments.

It is fundamental that retail businesses should keep up to date with social factors and changes in

order to adapt to the ever evolving markets (Mack, 2014). Such factors in India include the growing

ageing population, which shows also an increase in employment of elderly workers (PESTLE

Analysis, 2014), however, these elderly people lack sufficient knowledge and awareness of the

fashion industry, and therefore, their money wouldn’t be contributing to driving sufficient sales for the

fashion retail market. Adam Pillsbury discussed the continuous issue surrounding poverty in India,

stating that a considerable amount of Indians, approximately 350 million, still live in great poverty,

struggling to gain any access to proper nutrition, health care and education. When given this

information, the future of the fashion industry in India is understandably a miniscule concern in

comparison.

Technological changes in this industry can have both positive and negative effects, due to

smartphones and webpage cookies, the use of location-based advertising can specifically target

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Figure 2


nearby customers, increasing their awareness and leading to possible sales, yet, these customers

also have the access to compare prices and quality with competitors worldwide (Mack, 2014).

Specifically to technological changes in India, it is clear to see that this country is up to date with

changes occurring worldwide, such as 3G and 4G internet connection, allowing easier and faster

access when browsing online, India also boasts one of the strongest IT sectors in the world of which

allows constant software upgrades and the development of technological advancements (PESTLE

Analysis, 2014). This suggests that India’s fashion industry should be at the forefront of utilising their

IT position for online sales and advertisement, which allows a broader target market due to the access

to customers worldwide, as well as other benefits such as allowing customers to shop or browse 24/7

and from the comfort of their own homes.

2.2 Geographic Structure and Demographics

India is the seventh largest country in the world, and the second most populated country with an

estimated population of close to 1.3 billion people, the equivalent of 17.5% of the world’s population

(Population of India, 2015). Demographic studies have predicted that India will overtake China as the

world’s most populous country, due to the growing population rate of 1.41%. These statistics are

shown in Figure

2.

Current life expectancy statistics collected and analysed by the Census Operations

of India undertaken in 2011 show that there is a greater percentage of men to women, yet women are

shown to live longer, this is further supported with a larger number of women living over the age of 65.

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However, I feel that the relevance of these demographics is of little importance to the operation of the

fashion industry.

The neighbouring nations of India include Pakistan, China and Sri Lanka (Maps of India, 2014),

therefore, in terms of fashion, it is possible that particular shapes, silhouettes, patterns, colour

schemes or materials may be inspired by or have a close similarity to those of the surrounding areas.

3.0 Culture

3.1 Overview of Culture

India is a country of culture and tradition as the ideology of culture goes back to approximately 4,500

years ago (Zimmermann, 2015). Zimmermann wrote a detailed article for Live Science in which she

researched and discussed the different aspects to India’s culture including language, religion,

customs and clothing, and how these can vary depending on the various states of India, of which

there are 28.

In 2010, the Gujarat High Court stated that India does not actually have a national language, despite

the majority of people accepting Hindi as a national language, due to a large proportion of Indians

speaking Hindi and writing in Devenagari script, it is not in fact an official national language (Khan,

2010). However, in more recent times, it has been revealed that nearly 60% speak in a language

other than Hindi, such as Bengali, Telugu, and Marathi (Jain, 2014). The effect this may have on the

fashion industry is that of trying to decide which language to use when listing the details of clothes,

such as lengths, material used and features if selling online.

The Indians culture has a powerful sense of the idea of a spiritual lifestyle and development, which is

the core reasoning for the innovations of India’s strong connections to religion, when places of

worship became incredibly important, leading to the popular forms of various beliefs in the cases of

Buddhism and Jainism. (Indian Mirror, 2014). Close to 84% of Indians identify with Hinduism as their

choice of religion, and about 13% are Muslim, which makes it one of the world’s largest Islamic

nations (Clarke, 2013). In terms of the fashion industry, there are regulations due to the idea of

respect on what can or can’t be worn specific to different religions, for example, Hindu women must

wear clothing that covers most parts of their body, therefore the Sari is generally considered the

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official clothing for the Hindu woman (Hindu women, 2014). It may be due to these clothing-based

rules that western fashion retail companies have struggled to sell women’s apparel in India, therefore,

Hermes in 2011 decided that, to pay homage and be welcomed into the fashion industry in India,

designing their own sari’s to target Indian customers would grant them the sales they desired

(Kazmin, 2011).

There is a notable change in consumer behaviour in India in recent times due to higher disposable

income, technological developments leading to increased customer awareness, and changing

lifestyles as a cause of the urbanisation of previously rural communities (Tecnova, 2014). The rapid

growth of India is further suggested by statistics showing that the consumer market is expected to

grow by 2.5 times by 2025 (Chhapia, 2014), this is evidence that consumer behaviour is rapidly

increasing in India, which will further benefit the fashion industry’s sales. Research has also shown

that India’s consumers are increasingly becoming more impulsive buyers due to the higher disposable

income, and the access to online shopping as a result of technological advancements (Tecnova,

2014). The fashion industry must take note of this change in consumer behaviour and make the most

of the use of technology to target impulsive buyers, who can purchase items quickly and easily using

smart phones.

3.1 Popular Culture

Celebrity influence is a significant factor towards sales in the worldwide fashion industry (Ecvienna

Fashion, 2014). This is reflected in India also; ShahRukh Khan, Indian superstar, endorses the brand

Belmonte in their advertisements and campaigns in order to specifically target their ideal market, with

the managing director stating Khan as “the ideal choice for the youth oriented brand” (Business

Standard, 2007). Indian cinema, primarily the Bollywood industry, is a popular and successful

promoter of the fashion industry and greatly influences specific fashion trends (dotcomwomen, 2014).

Bollywood celebrities influence the fashion among younger people due to the glamorous and standout

trends promoted on film, with the extravagant patterns and colours (Ecvienna Fashion, 2014).

Bollywood is a key influence on the entire fashion industry within the Indian market as the fashion is

not confined to inspiration from India’s own culture and tradition but also includes a touch of western

culture, therefore, it is clear to understand that the Indian film industry has a large impact on

consumers behaviour towards fashion (Singh and Gupta, 2014).

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4.0 Fashion

4.1 Key Fashion Capitals

According to the Top Global Fashion Capital survey from 2013, New Delhi was number 22, due to

focusing on the traditional strengths, Mumbai is also in the list at number 45 (Language Monitor,

2014). Both New Delhi and Mumbai both delve into the fashion world by holding their own fashion

events, in which the competition between the two is fierce. These fashion weeks in the two most

fashionably important cities in India continuously attract both buyers and designers alike, and, in doing

so, greatly contribute to India’s fashion industry as well as retail sales (Gottipati and Vyawahare,

2012).

4.2 Fashion Industry

The market size for fashion in India is rapidly growing and by 2021, it has been predicted that

domestic and exports houses of India’s apparel industry will reach $223 billion, in comparison to the

$89 billion from 2011 (Annand and Khetarpal, 2014).

There is a growing market for luxury brands in India, with the Nielsen Global Luxury Brands Survey

stating that India one of the most brand conscious countries in the world, of the Indian survey

respondents, 35% were reported to buy designer brands. High end luxury brands have entered the

Indian market, primarily due to the higher salary, growing middle class and the new breed of self-

employed entrepreneurs (Grail Research, 2009). Consumer expenditure on the fashion industry is

estimated to be at 3.1 trillion Indian rupees, which is 7.2% of the total domestic expenditure (Fashion

Industry Statistics –India, 2015).

The fashion industry also contributes to the employment of the population, with approximately 2

million people employed in the manufacturing process, such as textiles, clothing, leather and footwear

(Fashion Industry Statistics – India, 2015). The textile industry in India is one of their oldest industries

in which producing cotton is an ongoing tradition, this country is one of the top producers of yarns and

fabrics in the world. This industry contributes 11% to the country’s total exports, and therefore, is one

of the country’s largest contributors to this sector (IBEF, 2015).

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5.0 Conclusion

From the extensive research and analysis undertaken throughout this case study, it is clear to

understand from the findings that there is a significant connection between culture and fashion, India’s

culture is reflected through the fashion, and encourages growth within the fashion industry. This is

echoed mostly through the increase of GDP, growing middle class and higher salary and, therefore,

the connection is portrayed with the increase of luxury brands within the fashion market. As previously

discussed, due to the powerful sense of religion and beliefs in India, the fashion garments reflect the

honour and respect necessary in places of worship, and the covering of the body that is expected of

women. As well as India being a country of growth within the fashion industry, and other aspects of

business and the economy, we understand that they are a large contributor towards the fashion

industry also, due to their booming textile industry. Andy Rubin’s words are of extreme importance

and relevance when discussing the BRIC nations and how influential they will be during our time.

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References

Arline, K. (2014) ‘PEST Analysis: Definition, Examples & Templates’,Business News Daily, 11 December. Available at: http://www.businessnewsdaily.com/5512-pest-analysis-definition-examples-templates.html (Accessed: 3 April 2015)

BBC Business (2014) Brics nations to create $100bn development bank. Available at: http://www.bbc.co.uk/news/business-28317555 (Accessed: 28 March 2015)

Changing Pattern of Consumer Behaviour in India (2014) Tecnova, 5 August.Clarke, M. (ed.) (2013) Handbook of Research on Development and Religion. Edward Elgar Publishing

Gottipati, S. and Vyawahare, M. (2012) ‘In Delhi and Mumbai, Dueling Fashion (and Fashion Weeks)’, The New York Times, 2 March,

Hindu Women, Indian woman, clothing | Hinduism Facts | Facts about Hindu Religion (no date) Available at: http://hinduismfacts.org/hindu-women/ (Accessed: 5 April 2015)

INDIAN CULTURE TRADITIONAL CULTURE IN INDIA (2014) Available at: http://www.indianmirror.com/culture/cul1.html (Accessed: 5 April 2015)

Indian fashion – Modern Influences (2014) Available at: http://www.dotcomwomen.com/beauty/indian-fashion-modern-influences/22021/ (Accessed: 10 April 2015)

India pips Japan to be 3rd largest economy in purchasing power(2014) Hindustan Times, 30 April,

Investopedia (2015) Brazil, Russia, India and China – BRIC [Online] Available at: http://www.investopedia.com/terms/b/bric.asp [Accessed 28th March 2015]

Jain, B. (2014) ‘Nearly 60% of Indians speak a language other than Hindi’, The Times of India, 21 June,

Kazmin, A. (2011) ‘Hermes sees sari as way in to India’, Financial Times, 7 October,

Khan, S. (2010) ‘There’s no national language in India: Gujarat High Court’, The Times of India, 25 January,

Mack, S. (2014) Social Factors Affecting Retail Business. Available at: http://smallbusiness.chron.com/social-factors-affecting-retail-business-71662.html (Accessed: 4 April 2015)

Moran, G. (2013) ‘Fashion’s future lies overseas, says Andy Rubin’,Drapers,Mufflerman Triumphs (2015) The Economist, 14 February,

Neighbouring Countries Maps (2014) Available at: http://www.mapsofindia.com/neighbouring-countries-maps/ (Accessed: 4 April 2015)

O’Neill, J. (2014) ‘Is the BRICS rise over?’, Bruegel.org, 26 July.

PESTLE Analysis of India in five Steps (2014) PESTLE Analysis,

Pillsbury, A. (2014) ‘Empowering women social entrepreneurs in India’,The Guardian, 4 September,

Population of India (2015) (no date) Available at: http://www.worldometers.info/world-population/india-population/ (Accessed: 4 April 2015)

Singh, J. and Gupta, K. (2014) ‘Bollywood and Fashion Trends in India: A Longitudinal Study’, International Journal of Scientific Research and Management, 2Textile Industry in India, Indian Textile Industry, Garment Industry (no date) Available at: http://www.ibef.org/industry/textiles.aspx (Accessed: 10 April 2015)

Zegheanu, L. (2014) Fashion Trends’ Impact on Society. Available at: https://www.notjustalabel.com/editorial/fashion-trends%E2%80%99-impact-society (Accessed: 3 April 2015)

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