Chinese fabric maker spins yarn for the Indian market

Gargi Banerjee

If menswear labels like Van Heusen, Arrow, Zara and Burberry are among the top global apparel brands today, they owe their success, in part, to a Chinese manufacturer of high grade yarn and fabric, called Luthai Textiles. Known for innovation and some interesting firsts in the industry, Luthai owns 600 patents in the textile industry, globally.Currently, Luthai exports 80,000 metres of fabric to Indian companies, which accounts for 5 per cent of the company's revenues. Spotting an opportunity to further strengthen its foothold in India, Luthai is poised to enter the organised retail market and has some product innovations for Indian consumers up its sleeve. In an interview to SME Mentor, Leo W, Vice-Director International Marketing, Luthai Textiles, shares his plans for smartening up the Indian man.

You are suppliers to the biggest men's shirt brands internationally. How old is your association with the Indian market?

Luthai began its journey in 1994, with the production of yarn dyed fabrics. Today, we are the only company in the world to produce across the value chain, from growing our own cotton on 8,673 hectares of land. Ninety per cent of our sales come from exports and India is the fifth-largest (and fastest growing) market for us. Our top markets are the US, Europe, Japan and Turkey. We entered India three years ago with our partners R K Group.

What is different about the Indian market compared to other emerging market economies?

Luthai creates mid-to-luxury range yarn fabric and there is a growing demand for it in India compared to other economies. India has the fastest-growing GDP and a middle class that is willing to spend. India currently contributes 5 per cent to our revenue, which we see growing to 15 per cent in the next 12 months.

What is the most popular fabric in India, and why do you think it works?

We cater to the mid-to-luxury range and have seen a demand for all our new innovations, starting from stitch-less shirts sold by Arrow in the country. India is a tropical country and bear in mind that Luthai is now producing a yarn fabric made of bamboo. Finished goods made from this fabric will soon be seen in the market. The demand for quality menswear is fuelling our growth in the country.

Can you throw some light on the new no-stain technology you are developing that is supposed to benefit tobacco/pan-chewing men in India?

India is one of the largest tobacco-chewing countries. When tobacco and paan stain shirts, the shirt cannot be worn again. The no-stain shirt will allow users to wash out stains with plain water without using soap. The stitch-less shirt is also a revolutionary innovation and, for the first time ever, a garment has been created without using a sewing machine.

The Indian textile industry is one of the oldest and most important ones in terms of contribution to GDP. It is also one of the largest manufacturers of yarn across the world. What is your USP as yarn manufacturers operating in India?

We try to work through innovations to keep upgrading and diversifying our product range to avoid direct competition with Indian local mills.

What are the biggest obstacles facing SMEs in the textile industry in India today?

Luthai caters to the mid-to-luxury segment and to make quality yarn for this segment we use ‘long-staple cotton'. India grows only short-staple cotton, which does not provide the quality required for the mid-luxury segment. Luthai has mills and technology to provide customised designs as asked by the customer. We are also known for the consistency of quality across the yarn fabric we provide.

How easy or difficult has it been for you to establish your footprint in India? And why do you think India is an important component of your  overall business revenues?

The Indian market is price-sensitive, especially with the current rupee depreciation and imports duty making it difficult for importers. India is no doubt an important market for us and we see it growing to third or fourth position in terms of market share in the next 12-24 months. This is because of the country's population and shirt culture, which will make it a huge potential market in future.

How do you intend to expand your presence in India?

Today we sell yarn fabric via the R K Group. All the menswear brands in the country are our customers. In the next 12 months, we plan to enter India by selling our brand over the counter (OTC) and in the next 12-24 months, we would like to retail our finished garments in the country.

Comment on your next five years' India business strategy.

Keep working with brands and expand and improve our technology and innovation. Also, build up our OTC business system, explore the possibility of Luthai shirt brand sales in India.

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