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Page Industries | Detailed Competitor Analysis

Recently we decided to take a look at Page Industries, which is famous for its brand Jockey and another fast-developing brand called Speedo in the swimwear market. Although the company is doing great in terms of business performance, it has become a subject of controversy amongst many investors due to their high valuations combined with slowing growth rates. Let's take a deep dive further...


Company Overview

The company is not the owner but is the exclusive licensee of Jockey International Inc. (USA) for the manufacture and distribution of the Jockey brand in India, Sri Lanka, Bangladesh, Nepal, UAE, Oman and Qatar. Page Industries is also the exclusive licensee of Speedo International Ltd. for the manufacture and distribution of the Speedo brand in India.

The company commenced its operations in India in 1995 with the manufacturing of Jockey products and went public in March 2007. As of March 2020, Jockey products are available in 55000+ outlets and 1900+ cities.


Industry Evolution

The undergarments industry has traditionally been highly fragmented and unorganized which dominated the industry with a market share of roughly 85%~ in 2008. Undergarments were produced by manufacturers in bulk as they played on volumes to benefit from economies of scale with no product differentiation in-sight.


Therefore, the products were manufactured in large quantities and widely distributed to MBOs (Multi-brand outlets) which is nothing but our old preferred local outlets to shop for undergarments. Neither the customers demanded branded undergarments in this segment nor the manufacturers focused on branding.


Undergarments therefore, were manufactured and traded like a commodity and with that the manufacturers got -

  • no product differentiation

  • no pricing power

  • limited demand

  • negligible scope of expansion

This trend continued to dominate till the early 2000s but slowly started changing with the advent of westernization, increasing disposable incomes and urbanization. As a result, consumers started becoming more fashion-conscious and demanded high quality branded undergarments. This is how the innerwear market is slowly moving away from unorganized -

Source: AR19 Lux Industries, Motilal Oswal research reports


The market share for the organized players in this industry has been almost doubled in the past 10-12 years mainly because the organized market has been growing at a much better pace of 14-15%~ CAGR against unorganized market growth of 7-8%~. The reason for growth differential can be attributed to -

  • Higher demand for branded / premium products

  • More pricing power with branded players

  • Increased consumption of innerwear per person due to higher income levels etc.

How Jockey played its role

Jockey i.e. Page Industries was one of the first ones to capture this trend and focussed on branding from the start. The company targetted building an image of quality and comfort about Jockey. Unlike the traditional MBO model, Jockey distributed its products through EBO (Exclusive brand outlets) along with MBOs to reach wider masses and create strong product differentiation.


Let's think of this, the most important thing that people look out for while buying underwear is comfort (more than brand). Jockey has been successfully able to tap the right mix of design and fabric which makes Jockey undergarments one of the most comfortable undergarments in India. Not only that, Jockey has been also providing a wide variety of designs for its products in order to cater to the demands of each and every individual.


It's very rare for a company to get all these things exactly right like Jockey which has been the reason for its high growth in business.


Emerging competition from MNCs

As soon as international companies realized the growing demand for brand-based products as well as India's huge untapped markets, many MNCs have since then entered into the space. For example, Van Heusen and Hanes, the biggest competitors for Jockey commenced operations in 2017 and 2012 respectively. There are several other brands trying to capture market share like US Polo, Rupa, VIP, Dollar etc.


Company Analysis

Page Industries' Jockey operates typically under the mid-premium segment with Van Heusen and Hanes their immediate competitors whereas Rupa, Lux, Dollar etc. currently compete under the economy segment trying to build a premium image in the market. US Polo, Marks and Spencer, Calvin Klein etc. compete in the high-end premium segment.


Page Industries derive 99.5% of its income from India and 98.5%~ sales from Jockey, rest coming from Speedo which is insignificant as of now.


Company's products can be broadly categorized into 4 segments -

  • Men's innerwear

  • Women's innerwear

  • Athleisure wear

  • Kid's wear and Others

Although the company does not give a breakup of its revenues based on different segments, the management did give a rough breakup of sales in Q4 2019 concall -

Source: Motilal Oswal research reports, ValuePickr and Others.


Men's innerwear makes up almost half of the company's revenues while athleisure wear makes up 25%. Women's and Kid's wear almost makes up the other 25% of revenues.


The below table provides expected segment-wise growth rates and Page's current market share within the segment -

Keeping this in mind, let's discuss future outlook of all the 4 segments with respect to Page -


Men's Innerwear

Page industries earn roughly half of its revenues from men's innerwear. The company initially started with this segment only and later diversified into other segments in order to keep its growth engine running.


Lets start with the basic price point analysis -

Source: Axis Securities research reports, April 2020


As per the above chart (non-exhaustive list), the company typically operates in majorly medium and somewhat premium segment. Since the industry product is such that the biggest attribute that consumers look forward to is (i) comfort and then comes (ii) brand. This essentially leaves us with 2 biggest competitors for Page industries, one Van Heusen and the other being Hanes. Both of these competitors' products have been accepted as comfortable by the consumers. Van Heusen typically has more brand recognition.


Rest of the brands like Rupa, Lux or VIP neither have that kind of comfort nor branding which should worry us atleast for now, although these companies are aggressively trying to create brand awareness by spending huge sums of money in marketing and sales (detailed competitor analysis covered later).

Hanes started operations in India (through Arvind Lifestyle) in 2013 whereas Van Heusen in innerwear division recently commenced operations (through ABFRL) in 2017. Page started operations in India in 1995, securing first-mover advantage. Lack of competition and emerging demand for branded, quality products was the reason for Page's extraordinary growth in sales throughout 2000s and early part of 2010 -

The numbers don't lie! We are not saying that Jockey will face poor growth in the future, its just that the industry is maturing, competition is increasing, base is getting larger and with that growth will eventually taper. For improving the growth rates, Page industries forayed into other areas like -


Women's Innerwear

Unlike men's innerwear, this segment is much more brutally competitive. There are already existing small-scale local brands that cover all price segments. Women's innerwear has high SKUs that cover a wide variety of designs and shapes leading to higher inventory management costs. This segment is expected to grow at 11-13% in the coming few years.


Athleisure wear

This is the fastest-growing segment for Page Industries. With the increasing awareness of exercising and maintaining good health among people, athleisure has picked up pace. There is an emerging trend of leisurewear (casuals) even for outside.


Again, the biggest competitors in athleisure wear for Jockey India is established brands like Nike, Puma, Addidas etc. in the premium segment. Jockey products mainly contributing to the more economical segment has emerging competition from Decathalon, Van Heusen, Maxx etc. Athleisurewear is expected to grow at the fastest pace among all others in question.

Kid's wear and Others

Kids-wear is one new category where Page Industries is aggressively wanting to build its position in. This segment currently contributes only 5-10% to the revenues.


One thing to note is that this segment is still untapped i.e. there is no strongly established and preferred brand in this space as of now. One of the reasons could be, moms