Global Apparel Market Outlook – An Overview
In the coming years, the global clothing market is expected to grow at a healthy rate. The clothing and fashion industry covers a variety of clothing and uses virtually all manufactured textiles. The industry is broadly divided into – men’s and kids’ dresses, women’s and girl’s dresses, and children’s dresses.
A bottom-up approach has been employed to estimate and validate the size and associated sub-markets of the global apparel consumption market. In 2018, the global clothing industry reached $1 449.0 billion, increasing compared to the last year of 4.6 percent.
Global clothing market growth is expected to continue to be moderately strong, as the disposable incomes of middle-class people worldwide will shorten the trend cycles.
The market is projected to grow to $2.006.4 billion in the 2020 and 2025 forecast period, driven by strong growth in the Asia and Pacific market, at 4.8 percent. The other important factors driving global clothing market growth include a growing population, rapid development, and shifts in the global economic power base.
All companies which create and sell clothing, footwear, and accessories in the fashion and clothing industries. The product scope is different from market to market and the product range, from basic products to luxury products.
Traditionally, the clothing company is owned by wholesalers selling the majority of goods to retailers. Later, items are marked up and sold to consumers for a profit. However, at times, it becomes rather difficult to draw a line between wholesale and retailers.
However, the report focuses heavily on the retail business.
The research on the clothing industry was developed by focusing on two types of research-primary and secondary research to achieve global clothing consumption. The main sources are clothing manufacturers, raw materials, representatives of associations, and industrial users. Investor Relations, annual report & other corporate pages, paid databases, press agencies, and industry expert interviews on the supply side of the value-chain are the secondary sources used in research.
The secondary research goal was to collect important information on the supply chain of the industrial sector, the currency chain of the market, segments of the market, global player pool, regional markets, and countries.
The main research was to validate the information collected during the second investigation and gather additional insightful information from the experts in the industry.
In the form of key drivers, constraints, and opportunities related to this industry, the market landscape of the global apparel market is being discussed. Let’s talk about more drivers on the market.
Market drivers are responsible for fostering and boosting the market sector’s growth. They play an important role in designing business strategies to boost revenue with the industry’s overall growth. In the clothing industry, the main market drivers are:
1) A rise in millennial and Gen Z Population
Generations Z and Y are the spending forces contributing to the world economy. ACCORDING TO FORBES, the US spends $600 billion annually for millennia, and by 2030 it is projected to represent 35% of expenditure. Youth spenders are Millennials. They will become an increasingly important consumer group as soon as they enter their thirties.
2)Increase in disposable income & per capita apparel expenditure in emerging economies
In emerging economies, increasing disposable revenues are bound to increase wallet sizes, resulting in consumers spending more money and a stronger lifestyle enthusiasm. In India and China, per capita, clothing expenditure has risen by 31% and 27% in 2019 compared to 206. Shortly, the trend is expected to continue.
3) The increasing influence of social media, micro-influencers, & fashion icons
Social media channels have been turned into a lucrative marketing tool where shoppers scroll to social feeds and where bloggers find new trends and cover essential fashion items. Shoppers do not restrict social media channels to inspiration but buy on social media channels as well.
Therefore, retailers explore social media marketing to leverage the ability to purchase and boot sales.
4) Growing penetration of e-commerce and increasing cross-border e-commerce.
The world of fashion is online, with approximately 1.8 trillion people buying goods online worldwide. Global e-commerce sales totaled US$ 2.8 billion, and projected growth in e-commerce by the end of the year 2021 is US$ 4.8 trillion.
Consumers are expected to spend $1 trillion on cross-border e-commerce by 2020, with international social media connections for more than 900 million consumers. Therefore, fashion tycoons can grow their potential consumers and boost revenue on world digital platforms.
The overall growth of the clothing and fashion industry will be prevented by market restrictions. These factors hamper the growth of industry and control the industry’s important development.
1) Increasing awareness and demand for sustainability
Mode consumers all over the world choose eco-fashion compared to anybody else. They expect to produce environmentally friendly textiles, reduce pollutant emissions, save resources, increase social commitment, and make production more employee-friendly.
The fewest consumers, however, are prepared to pay for greener products. This inspires brand clothing companies to implement sustainable practices throughout the entire value chain. By making and marketing more sustainable products, brands are attracting potential consumers.
2) Rising fast fashion consumer demand
The days have passed in which fashion brands have used consumer feeds. This “push model” has been working for fashion players for many decades. Today the world of fashion transforms that model into a model. Trends are more likely to emerge from the street in many segments of the mass market.
There are many challenges for stakeholders due to the changing era of fast-changing preferences, from the pull-in model to customized production. The mode brands are constantly being pressured to bring new styles more often, to exchange lines in mid-season,
Fewer batch sizes and more on-demand refills due to an increase in rapid mode.
3) A slowdown in the global economy
The world economy is in sync; clothing and fashion industry growth has decreased to 3% in 2019, which is the slowest growth since the global financial crisis. With increasing trade barriers to growing geopolitical tensions, the global economy will continue at the weekend.
By the end of 2020, the tension between the US and China will reduce global GDP collectively by 0.8%. Low productivity growth, demographic aging in advanced economies, and other country-specific factors in many emerging economies are other drivers for the slow-down of growth. The global economy’s general downturn would affect the fashion industry directly.
Market players must concentrate on the opportunities they have to make money. Market actors in this highly competitive market should also take advantage of these revenue pockets to gain competition.
1) Growing demand in emerging economies
The reduced production costs in the Asia Pacific region have led to the growth of clothing manufacture in developing countries such as China, India, Bangladesh, Vietnam, and many more. The main reasons for the lower production costs are lower labor costs, support from the government, less stringent environmental regulations, the availability of raw materials, etc.
In these emerging economies, apparel forms a large part of consumption. Increasing disposable income, young people-doneness, growing purchasing power, and a greater awareness of fashion in rural areas drive growth in developing countries. The increasing consumption per capita of clothing and the youth-dominated population will also give clothing and fashion brands an important opportunity.
2) Increasing demand for secondhand clothing
Millennials and Gen Z drive secondhand growth. Currently, thousand-year-olds and boomers make 33 and 31 percent of the total resale shoppers the largest second-hand consumers.
The secondary trade is now valued at 24 billion dollars and is projected to reach 51 billion dollars in the next five years and is projected to reach 64 thousand dollars in 2028.
The secondhand market looks so dynamic that retailers are looking forward to the circular mode game. The line between new and used clothing is blurring for today’s fashion consumers. And that is why the retail world has changed significantly.
Porter’s Five Force Analysis
To identify competition forces in the clothing and fashion industry, the report was analyzed with Porter’s five forces in mind. The model of Porter is intended to increase the profitability of a company by analyzing its competitive level. The five forces of the model of Porter helps companies define their corporate strategy by identifying the industry’s structure.
In Porter’s model, the five forces considered are:
1) The threat of New Entrant
New players in the industry are bringing together new and unique business ideas. With intelligent business technology, the new bees are undoubtedly getting smarter. They know how to make their products more popular. Social media is apparently their most popular and effective media outlet.
For newcomers, the “High risk, high reward” approach is offered by the clothing industry. And the entrance of a foot into the door, copying others, isn’t that difficult. The penetration of technology and the expansion of e-commerce throughout the value chain has allowed start-ups to move into the fashion industry with minimal investments and less economical scale.
2)Threat of Substitute
This force is almost insignificant as in the clothes and fashion industry, and clothes can not be changed enough. “Substitution” is the only competition in the fashion industry.
3) Bargaining Power of Supplier
Suppliers control the clothing and the fashion industry little. Most clothing companies supply their third-party products by providing them with only part of their profit.
They are therefore exempt and can be exchanged. As a result, investment in the clothing sector is relatively small and will remain low until a significant decrease is achieved in the global growth gap.
4) Bargaining Power of Buyer
Buyer power is a rather bigger force in the clothing and fashion industry. The most important force is the ability of buyers to trade because buyers can choose not to buy goods or switch retailers to lower prices.
Buyers have many shopping options for clothing and fashion items. So it provides indirect negotiating power to keep a small incentive for a particular company.
5) Degree of Competition
As many of its retailers sell similar products, the fashion and apparel industry is highly competitive. And brands can sell clothing at significant rates to some businesses.
Little innovation exists in the industry, so that very similar products quickly saturate the market. The mode industry is hard to get in and is becoming almost a “race down to the ground.”