India's apparel retail sector is experiencing a much-needed revival as an early and intense winter season drives significant growth in sweater and jacket sales. After last year's disappointing warm spell that left retailers with excess stock and forced heavy discounting, this year's timely cold weather has brought renewed optimism to the industry.
Early Winter Chill Sparks Demand Surge
The early onset of winter conditions, attributed to the La Niña weather phenomenon, has prompted consumers across India to begin their winter wear shopping much sooner than usual. This climatic shift comes as a welcome change from last year's unusually warm winter that severely impacted sales volumes and profitability.
Industry estimates indicate that winter sales typically contribute approximately 20% of total annual revenue for apparel companies, making this quarter crucial for annual performance. The early cold snap has already shown positive results, with retailers reporting stronger footfalls and better sell-through rates compared to the same period last year.
Multiple Factors Driving Growth
Several favorable conditions are converging to create ideal circumstances for winter wear retailers. The overlap of the extended wedding season with the cold wave has created a dual engine for demand growth. According to Poonam Upadhyay, director at Crisil Ratings, "Winter matters just as much because it coincides with the wedding season, when demand naturally surges."
The profitability picture has also improved significantly. Winter wear typically commands 300-400 basis points higher margins than regular apparel, and this year, retailers are enjoying the additional benefit of reduced discounting pressure. With temperatures dropping sharply immediately after Diwali, consumers are purchasing at full price rather than waiting for mid-December discounts as they did last year.
Retail Performance Shows Strong Recovery
Value retailers are reporting particularly impressive numbers. V2 Retail Ltd has seen winter wear's contribution to total sales increase from around 40% last year to nearly 55% this season. Akash Agarwal, whole-time director at V2 Retail, noted that "the higher ASP (average selling price) gives us a delta of nearly 5% in sales."
V-Mart Retail Ltd, which has a dominant presence in north and east India, described last year's winter as "topsy-turvy" but is now seeing improved performance. The company's management reported that footfalls picked up immediately after Diwali this year, with customers quickly shifting to winter product lines.
Structural Improvements and Market Shifts
Beyond seasonal factors, structural changes are also benefiting organized retailers. The reduction in GST on synthetic fibres has provided meaningful cost support, allowing brands to adjust prices on winter wear above ₹2,500 while maintaining margins. This has helped narrow the price gap between branded and unorganized sector products.
Improved farm incomes in semi-urban and rural areas are driving more customers toward organized retail players. According to industry experts, the combination of better rural purchasing power and more competitive pricing from branded players is shifting demand from unorganized to organized retailers.
The winter wear market was valued at $12.73 billion in 2024 and is projected to reach $22.64 billion by 2033, growing at a compound annual growth rate of 6.16%, according to the India Thermal & Winter Wear report by IMARC Research.
Learning from Past Mistakes
Retailers have adapted their strategies based on last year's challenging experience. Major players like Aditya Birla Fashion and Retail Ltd (ABFRL) have front-loaded their inventory, particularly winter wear sourced from Bangladesh, to ensure timely availability for festival and wholesale channels.
Rahul Mehta, chief mentor of the Clothing Manufacturers Association of India (CMAI), expects winter wear volumes to grow about 25% year-on-year this season. He noted that last year's discounting was "deep," starting from 30-35% and rising to 50-60% in many cases, which resulted in flat volume growth and declining value of goods sold.
The improved sentiment is visible across regional and mid-market players as well. Companies like Bazaar Style Retail and Cantabil are reporting stronger post-Diwali footfalls, with particular strength in northern regions including Delhi NCR, Punjab, Haryana, and Uttar Pradesh.
