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Perhaps the most well-known address serving as a nod to Erode's status as a textile marketplace is Texvalley, a sprawling wholesale complex spanning 20 lakh square feet and hosting 500 wholesale shops that cater to big buyers and retail customers.
Located about a hundred kilometers from Coimbatore, beyond Tamil Nadu's textile town of Tiruppur, is a dusty little town called Erode. Over the years, the district has garnered a reputation for itself as Tiruppur's marketplace — garments manufactured in the town's many factories often find their way to retail and wholesale counters in Erode.
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Perhaps the most well-known address serving as a nod to Erode's status as a textile marketplace is Texvalley, a sprawling wholesale complex spanning 20 lakh square feet and hosting 500 wholesale shops that cater to big buyers and retail customers. By Diwali this year, Texvalley, its promoters say, could wear a whole new skin: that of a destination mall with a multiplex, pubs, fine-dining restaurants, a 500-seater food court, entertainment zones and a hotel, on-site.
In a chat with CNBC-TV18, Texvalley's promoters said they have reason to believe that post-COVID demographics have led to a catchment area that justifies establishing a destination mall of this magnitude.
"There is a spending money and disposable income a lot of people made the decision to stay back in their hometowns while continuing to work for their global organizations," said C Devarajan, vice chairman at Erode Textile Mall Ltd, which owns Texvalley. "Nearly 5,000 people in Erode now have better income because they live in a small town," he added, "Given that agricultural commodity prices have also increased — agriculture is a major occupation here — people actually have the money to spend, inflation notwithstanding."
However, the 500 wholesale brands that have made the mall their home aren’t going anywhere in a hurry. According to Texvalley, the mall’s new avatar is expected to house B-to-B and B-to-C businesses, with 4 lakh square feet earmarked for consumer businesses spanning electronics, apparel, accessories, home furnishing, F&B, entertainment, and leisure goods. Post-makeover, Texvalley’s monthly footfall of 60,000 is expected to rise to 5 lakh business executives, customers and tourists, the company said.
"We do about Rs 750 crore worth of business per annum and project that it will touch Rs 12,000 crore over the next seven to ten years," said Devarajan, "However, in the next two years alone, our vision is to reach Rs 4,000 crore in annual turnover — that’s six times of what it is today." An AC Nielsen market report on South India's largest textile marketplace is in agreement with these ambitions, as it projects Texvalley’s turnover to touch about Rs 5,000 crore by 2024, should the destination mall take form and shape at the appointed time.
These targets aside, analysts say that an integration of B-to-B and B-to-C businesses along the scale that Texvalley hopes to achieve, maybe a first in Indian mall retail. "The attempt is aimed at mixing commerce and fun to result in a model that increases the mall’s catchment area," said Sushil S Dungarwal, Chief Mall Mechanic at Beyond Square Feet. "A shopping mall attracts people from a seven-kilometre radius, while a B-to-B shopping space can attract people from all over," he explained, "Here (B-to-B and B-to-C businesses combined), the primary catchment increases to about 50 to 100 kilometres, and that will be a key differentiator."
Textile business falls upon hard times
Incidentally, the makeover comes at a time when textiles are facing their most challenging phase across the Indian markets. In India, a candy of cotton has seen its price increase from Rs 43,000 in April 2020 to Rs 1.1 lakh today. According to reports, hundreds of mills in the town and its neighbor, Tiruppur, have shut shop as a direct result of being unable to bear procurement costs. Less than a month ago, 10,000 textile shops in the district downed their shutters as a mark of protest, with 25 textile associations participating in the strike.
Yarn prices have doubled in the last couple of years too. According to the Erode Cloth Merchants’ Association, the town’s ‘40s count cotton yarn’ has seen its price go up from Rs 200 to Rs 400 per kg, while ‘30s count cotton yarn’ has seen a price-hike too — from Rs 170 to Rs 330 per kg.
In the context of this scenario, wholesalers at Texvalley are more than happy at the prospect of better footfalls, as these traders have seen business halved and procurement budgets double. "A bigger mall with more customers is a good idea because it will bring in better footfalls," said Dhanalakshmi Mohan, proprietor of Angalamman Tex, a wholesale store located within Texvalley. "A piece of fabric that we used to buy for Rs 150 now costs Rs 250," she added, "We have no margins but to cut our margins by 20 percent and sell, because that’s the only way we can do business."
Other stores within the mall have resorted to hiking prices in order to tide over escalating raw material prices, with most stores seeing hikes of 15 to 20 percent per product, which end up as a price-hike of Rs 200 to 300.
First Published: Jun 9, 2022 7:15 AM IST