Garment Value Chain Analysis

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Whenever I go for shopping clothes from retail showroom and stores, the retail price of the clothes stops me to go for purchasing. It may be true to some of you. The final retail prices are really crazy. How they can charge that much money for the basic products? As garment manufacturing expert I know how much money has been spent in fabric and manufacturing. To get the answer of my question I started researching for value chain of apparel products from fabric to retail. Finally I got two examples that helped me to understand who are taking share of total price. It may not be match with all types of apparel products but you will get a broad idea on the garment value chain.


Example 1: Value chain analysis of a Casual Frock
Cost Parameters
Value Addition Percentage
Rate (INR)
Share of Total Retail Price
Raw Material (Fabric, Zipper, thread)
70
70
28.7
Drafting, designing and Cutting
30%
21
8.6
Embroidery
33%
30
12.3
Stitching
20.70%
25
10.3
Hand work
27.40%
40
16.4
Ironing & Packaging
13.40%
25
10.2
Whole seller margin
15.60%
33
13.5
Total
244
100

Share of Total retail Prices has been shown in the following pie chart#1

Example 2: Value chain analysis of a Party Wear Frock
Cost Parameters
Value Addition Percentage
Rate (INR)
Share of Total Retail Price
Raw Material (Fabric, Zipper, thread)
300
300
28.1
Drafting, designing and Cutting
30%
90
8.4
Embroidery
35%
137
12.8
Stitching
25%
132
12.3
Hand work
30%
197
18.5
Ironing & Packaging
4%
34
3.2
Whole seller margin
20%
178
16.7
Total
1068
100

Share of Total retail Prices has been shown in the following pie chart#2


Source: Diagnostic study report by MSME

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