About Purple United Sales Limited

Purple United is a premium fashion brand dedicated to offering high-quality, versatile apparel, footwear, and accessories for children of all ages. Founded in 2014 by Mr. Seth, their mission is to enable children to express themselves using their 'brand' as a medium. Their ethos revolves around celebrating childhood with a strong emphasis on comfort, safety, and quality. Their flagship brand, "Purple United Kids," supports the entire journey of children up to 14 years old, offering lab-tested products made from premium materials in vibrant colours and designs for every occasion. Their operations encompass designing, developing, sourcing, marketing, and selling apparel and footwear for infants (0 to 1 year), toddlers (2 to 6 years), and older kids (7 to 14 years). We also offer a wide range of accessories and hard goods, such as strollers, etc.

They cater exclusively to the Indian market. Their extensive distribution network comprises 17 exclusive brand outlets (EBOs), multiple shop-in-shops, and a robust online presence through their website, mobile app, and major e-commerce platforms such as Myntra, Amazon, Flipkart, FirstCry, Nykaa, Hopscotch, AJJIO and more. Their range of products include t-shirts, shirts, jackets, sweaters, clothing sets, dungarees, rompers, partywear, dresses, denim, lowers, trousers, jeggings, skirts, shoes, ballerinas, slides, moulds, flipflops, sandals, caps, sling bags, socks, strollers among others. As on July 20, 2024, they have 17 EBOs under the brand name “Purple United Kids” across 5 states and 10 cities in India and 20 shopin-shops in Key Accounts and 44 distributors across Pan India.

As of June 30, 2024, Purple United Sales had 161 employees, all of whom were employed on a full-time basis. The Banker of the Company is ICICI bank.

Textile & Apparel Industry
The textile and apparel market in India is one of the oldest industries in the country, with a rich heritage that spans centuries. Overall, the industry contributes around 2% to the country's GDP and accounts for 7% of industrial output in value terms. With a 4% share of the global textile and apparel trade, the sector is vital for India's export economy, making up 10.33% of the country's overall export basket during 2021-22. This sector is broadly divided into several segments including fibre and yarn, processed fabrics, garments, and technical textiles. The garment sector is divided into ready-made garments and customized tailoring.

However, the industry is facing a significant downturn, exacerbated by sluggish domestic market conditions. Manufacturers are seeing lower-than-expected sales as consumer spending increasingly Favors food items, consumer electronics like mobiles and iPads, and vehicles over garments. This shift in consumer preferences is particularly challenging for overall garment market.

The spinning sector is struggling with high under-utilization due to reduced yarn imports from China and sluggish buying from weavers and knitters. The combined effect of reduced exports and lacklustre local consumption has compounded the industry's challenges. In response, initiatives such as the Production Linked Incentive (PLI) and PM Mitra schemes aim to attract investments in man-made fibres and technical textiles, to reduce import dependence over time.

Despite these setbacks, segments like the athleisure and sportswear market, have shown robust growth, doubling sales over the past two years. Additionally, the kid's wear segment has benefited from the increasing demand driven by the growing child population. However, the reliance on imported man-made fibres, particularly spandex fabrics from China, Vietnam, and Taiwan, continues to pose challenges.

Textile mills are also experiencing margin pressures, even as cotton prices stabilize around a two-year low. Adding to these difficulties, the industry is grappling with a significant rise in freight costs, up by 40% due to disruptions in the Red Sea region. This unexpected increase in transportation expenses raises concerns about its impact on operational costs and product pricing, particularly for the cost-sensitive ready-made garment market.

The Indian textile and apparel market size was estimated to be approximately USD 165 billion in 2023, with the domestic market accounting for USD 125 billion and exports contributing USD 40 billion. This growth is driven by increasing domestic demand, favourable government policies, and the rising preference for sustainable and ethically produced textiles, positioning India as a key player in the global textile industry.

In 2023, the Indian textile industry faced significant challenges, including fluctuating cotton prices, declining demand, under-utilized capacity, and stiff competition from imported fabrics and garments from China and Bangladesh. Gurudas Aras, an independent director and strategic advisor, highlighted these issues and suggested measures for recovery in 2024. Major global markets, such as the US and EU, saw sharp declines in apparel imports, impacting Indian exporters. For instance, US apparel imports dropped by 21% to USD 6.5 billion in October 2023, and EU imports fell by 20% to USD 7.2 billion.

The global garment industry is contracting, with predictions of a continued decline in US garment imports by 25% to 30%. This trend is exacerbated by major US retailers reducing imports and maintaining minimal stock levels. Bangladesh’s strategic import of cheap raw materials from China and its tax-exempt status as a least developed country have further strained Indian exports, which stagnated at around USD 16.5 billion, while Bangladesh’s exports surged past USD 44 billion.

Despite these challenges, the Indian textile industry is on a growth trajectory, with its market size projected to nearly double from USD 165 billion in 2023 to USD 350 billion by 2030, reflecting a compound annual growth rate (CAGR) of 10%. Increasing disposable incomes and a growing middle class are driving demand for textile products, including kid’s wear. This segment is particularly buoyed by changing fashion trends, a preference for branded items, and the expansion of e-commerce platforms. Government initiatives such as the Production Linked Incentive (PLI) scheme and PM Mitra are promoting modernization and enhancing global competitiveness.

Moreover, Strategic trade agreements and advancements in quality standards are improving India's position in international markets, supporting export growth alongside rising domestic consumption. Technological innovations and sustainable practices further enhance the industry's efficiency and quality. These factors position the Indian textile sector, including the kid’s readymade garment market, as a robust engine of economic growth and global competitiveness.

Readymade Garment Industry in India
The ready-made garment (RMG) industry in India is a vital sector that significantly contributes to the country's economy. India is one of the largest consumers and producers of cotton, with the highest acreage of 12.5 million hectares, accounting for 38% of the global area under cotton cultivation. A substantial portion of its textile production is dedicated to the RMG sector. Key manufacturing states such as Andhra Pradesh, Telangana, Haryana, Jharkhand, and Gujarat play a pivotal role in this sector. Manufacturers focus on innovative designs, high-quality fabrics, and affordability to cater to evolving consumer preferences, including the rapidly growing kid's wear market.

India is a major player in the global textile and apparel market, being the second-largest producer of man-made fibre (MMF) after China and the third-largest exporter of textiles and apparel. In 2021-22, textiles and apparel, including handicrafts, accounted for 10.5% of India’s total merchandise exports, with key markets in the USA, EU-27, and the UK. The RMG industry is a significant contributor to this success, and within this industry, the kid's wear segment is driven by rising disposable incomes, a growing child population, and increasing urbanization. Despite some fluctuations due to broader market factors, the kid's wear market continues to expand and evolve, reflecting the dynamic nature of India's textile and apparel industry.

Key product segments
The Indian readymade garment industry is a significant segment within the broader textile and apparel market. It encompasses a wide variety of products catering to diverse consumer needs both domestically and internationally. This report outlines the key product segments in the Indian readymade garment industry, highlighting their characteristics, market dynamics, and contributions to the economy

The Indian readymade garment industry is a diverse and dynamic sector, encompassing various product segments that cater to a wide range of consumer needs. Each segment plays a crucial role in the overall growth and development of the industry, driven by factors such as changing fashion trends, increasing disposable incomes, and evolving consumer preferences. The industry's ability to innovate and adapt to market demands ensures its continued significance in both domestic and global markets.

Readymade garment manufacturer makers will rely on domestic consumption (75% of the overall demand), which is expected to grow 6-8 percent in volume terms this fiscal. The Indian textile and apparel market for the fiscal year 2022-23 is valued at USD 165 billion. Of this, the domestic market accounts for a substantial 75%, amounting to USD 125 billion. Within the domestic market, the apparel segment is dominant, making up 74% of the market, which translates to USD 92 billion. Other significant segments include home textiles at USD 9 billion and technical textiles at USD 24 billion. Exports constitute the remaining 24% of the market, valued at USD 40 billion, with apparel exports at USD 16.5 billion and textile exports at USD 23.5 billion. The apparel market has shown steady growth from FY 2020 to FY 2024. Starting at 78 billion USD in FY 2020, the market size increased to 80 billion USD in FY 2022, reached 92 billion USD in FY 2023, and is projected to hit 100 billion USD by FY 2024. This trend reflects a CAGR of 9%.

Several factors contribute to the steady growth observed in the apparel market. Rising disposable incomes have enabled consumers to increase their spending on apparel. Increasing fashion awareness and the desire to keep up with trends have fuelled demand. Additionally, the expansion of online retail platforms has facilitated easier access to a wide range of apparel options, further boosting market growth. This consistent upward trend highlights the robust potential and expanding nature of the apparel industry.

India's readymade garment sector continues to exhibit robust growth within the country's textile industry. The sector remains a significant contributor, driven majorly by domestic demand including kid’s wear. Rising disposable incomes and evolving fashion preferences among Indian consumers have bolstered domestic consumption of kids' readymade garments and the overall RGM industry. Major manufacturing hubs are concentrated in cities such as Tirupur, Bengaluru, Mumbai, and Delhi-NCR, facilitating efficient production and distribution.

However, the sector faces challenges, including stiff competition from countries such as Bangladesh and Vietnam, as well as susceptibility to global economic fluctuations. To support growth, the Indian government has implemented initiatives aimed at promoting exports, upgrading technological capabilities, and fostering sustainable manufacturing practices. There is also a growing focus on integrating digital technologies to adapt to changing retail dynamics, particularly with the rise of e-commerce platforms in the market. the RMG industry, with a significant focus on the kid's wear segment, continues to be a vital and growing component of India's textile industry, driven by strong domestic demand and strategic government support.

Export Demand Scenario
India ranks as the sixth-largest exporter of textiles and apparel globally, bolstered by its extensive raw material and manufacturing base. In 2022-23, textiles and apparel accounted for 8.0% of India's total exports, with the country holding a 5% share of the global trade in these products. Despite significant logistics challenges, India achieved record-high exports of textiles and apparel, including handicrafts, totaling USD 35.58 billion in FY23.

Focusing on the ready-made garment (RMG) sector, exports reached USD 16.19 billion in FY23, reflecting a modest growth of 1.1% over 2021-22. In February 2024, RMG exports increased to USD 1.48 billion, up from USD 1.41 billion in February 2023. Within the RMG sector, the kid's wear market is particularly significant, accounting for nearly 50% of the total RMG exports. This substantial share is driven by rising global demand for high-quality, affordable children's clothing, which has positioned India as a key supplier in this segment.

From April 2023 to February 2024, exports of cotton fabrics and made ups stood at USD 10.58 billion. However, exports during 2022-23 saw declines in several categories: cotton textiles decreased by 28.45%, man-made textiles by 11.86%, and handicrafts by 19.13%. Despite these challenges, the kid's wear market within the RMG sector showed resilience and continued to drive export growth, highlighting the dynamic nature of India's textile and apparel industry. Overall, while the Indian textile and apparel industry faces challenges, the robust performance of the kid's wear segment within the RMG sector underscores its potential for continued growth and its vital role in the country's export landscape.

Kids Garments Industry in India
The kids wear market in India is experiencing robust growth, driven by increasing disposable incomes, urbanization, and a rising population of young children. The market is characterized by a diverse range of products, catering to different age groups, styles, and price points. Modern parents, who are becoming increasingly affluent and fashion-conscious, are showing a growing demand for trendy outfits that not only mirror their aspirations but also reflect the unique personalities of their children. This shift is noticeable across various shopping areas, from the traditional lanes of Old Delhi to the bustling malls of Mumbai. Social media and images of celebrity kids in designer wear are shaping parents' purchasing decisions, with homegrown brands such as Gini & Jony competing against global giants such as H&M and Zara Kids. Eco-conscious parents are driving the demand for sustainable and organic clothing, while gender-neutral fashion is gaining traction, challenging traditional norms. However, the unorganized sector continues to offer budget-friendly alternatives, posing competition to branded players, and the industry struggles with the critical issue of sizing standardization. Overall, the kids wear sector in India reflects the nation's evolving aspirations and values, balancing tradition with progress through diverse fashion choices, from ethnic wear to western styles, and sustainable fabrics to personalized designs, showcasing the dynamic changes in the country.

The kids wear market, a sub-sector of the broader apparel and fashion industry, focuses on clothing designed specifically for children, ranging from newborns to pre-teens. This market includes clothing tailored to the needs of various age groups—newborns, infants, toddlers, and kids—across segments such as casual wear, active wear, formal wear, and ethnic wear. In India, rising disposable incomes and the increasing influence of fashion trends have transformed parents into fashion-conscious consumers. Unlike in the past, when children's clothing was primarily functional, contemporary Indian parents now seek stylish, comprehensive outfits for their children. This shift has led to the emergence of numerous domestic and international brands, offering a diverse and stylish selection of children's clothing. The market has become highly competitive, with companies investing in marketing strategies and product innovation to stay ahead.

The Indian kidswear market is experiencing a remarkable rebound post-pandemic, reflecting a dynamic recovery fueled by a young and rapidly growing population. The market's size surged from USD 15.20 billion in FY 2020 to USD 20.01 billion in FY 2023, marking a substantial growth of nearly 32% over three years. This robust increase highlights not only the sector's resilience but also its potential for continued expansion.

Several interconnected factors contribute to this impressive growth. Firstly, India's demographic profile with a significant proportion of young families and a high birth rate creates a steady and consistent demand for children's clothing. This demographic trend ensures a continuous market for kidswear, driven by both necessity and evolving consumer preferences.

Rising disposable incomes across urban and semi-urban areas have empowered families to spend more on premium and branded kidswear. As economic conditions improve, parents are increasingly willing to invest in high-quality and fashionable clothing for their children. This trend is further supported by the growing fashion awareness among children, influenced by media exposure, social media, and celebrity endorsements. Children today are more attuned to fashion trends and are influenced by global styles, driving demand for trendy and stylish apparel.

Urbanization has also contributed to the growth of the kidswear market. As more families move to urban areas, there is a shift towards convenience and ready-to-wear garments, which align with busy lifestyles and the preference for modern shopping experiences. This urban shift has led to an increased demand for fashionable, easy-to-maintain clothing that fits the fast-paced city life.

The market’s expansion is also supported by the growing presence of both online and offline retail channels. E-commerce platforms and D2C brands have revolutionized the way parents shop for kidswear, offering a wide variety of options, competitive pricing, and convenient shopping experiences. This shift towards online shopping, combined with the growth of brick-and-mortar stores in key urban centers, has broadened access to diverse and high-quality kidswear.

Looking ahead, the Indian kidswear market is poised for continued growth. As disposable incomes rise and fashion trends evolve, demand for high-quality, trendy kidswear is expected to sustain its upward trajectory. The sector's recovery from the challenges of the Covid-19 pandemic is solidifying, with promising prospects for sustained success and innovation in the coming years.

PURPLE UNITED SALES LIMITED COMPETITIVE STRENGTHS
1. Well-positioned to benefit from the fast-growing market for kid's products.
2. Extensive product portfolio of quality products delivering a robust value proposition.
3. Strong back end with design capabilities, strong focus on 3Fs (fun, fashion and functionality) and control over distribution channels.
4. Experienced Promoter and management team.
5. Strong financial performance.

PURPLE UNITED SALES LIMITED GROWTH STRATEGIES
1. Continued focus on kid's apparel, footwear and accessories in India and on increasing market share.
2. Expand their presence across India and grow sales of our products at existing points of sale.
3. Capitalize on the increasing e-commerce penetration in Indian Retail as well as within their category.
4. Increase market share by capitalizing on the strength of their brand.

PURPLE UNITED SALES LIMITED RISK FACTORS & CONCERNS
1. The business from retail outlet is concentrated in the National Capital Region (NCR) only. 
2. General economic and market conditions in India and globally could have a material adverse effect on the business.
3. Their proposed expansion plans relating to the opening of new stores are subject to the risk of unanticipated delays in implementation and cost overruns.