The apparel and footwear industry have undergone changes because of three new trends. The evolution of athleisure has arguably been the defining trend of this decade in apparel and footwear. Rather than waning in importance, the trend is evolving, illustrated by sportswear’s ongoing dynamic growth. Childrenswear continues to outshine both menswear and womenswear, benefiting from a mixture of macroeconomic and social trends. The rising middle class in emerging markets, coupled with fashion’s infiltration into the category is driving increased per capita expenditure. Lastly, fast fashion takes hold in emerging markets. The concept of bringing catwalk trends to stores in a matter of weeks has undercut specialist players that once led the industry and is showing no signs of slowing down as the fast fashion giants gain traction in emerging markets.
Athleisure’s Lifestyle Status
Sportswear is expected to continue driving growth in the industry producing a CAGR of 4% over 2016- 2021 in comparison to 2% for overall apparel and footwear. Notably, Asia Pacific will be the driving force for growth within sportswear, generating absolute value growth of USD24 billion. While US, China, and India are set to to generate combined absolute value growth of USD37 billion to 2021, accounting for 61% of global sportswear growth. This is fuelled by performance and sports-inspired categories. As athleisure transitions from a fashion trend to a lifestyle movement, sportswear giants Nike and Adidas continue to flex their fashion credentials by collaborating with designers such as Olivier Rousteing and Stella McCartney, while fashion heavyweights such as H&M and Tory Burch continue to invest in sports-inspired sub-brands.
Micro-fashion maintains momentum
Childrenswear continues to outperform both menswear and womenswear, benefiting from a mixture of macroeconomic and social trends. The rising middle class in emerging markets is resulting in greater per capita spending, notably, the abolition of the one-child policy in China is expected to see per capita spending increase from USD16 in 2016 to USD19 by 2021. Furthermore, the shift towards smaller, later families, with high disposable incomes is resulting in lavish spending on children in developed markets. The category continues to transition from soft dressing to trend-led products with heavy investment from mass apparel brands such as Zara in addition to high-end luxury players. Fashion has become an important component in the buying process and as a result the frequency at which clothing is purchased continues to rise. Additionally, the mini-me trend has also benefited sportswear players as parents adopt athletic clothing on a daily basis and seek to dress their children in a manner that reflects their own style and status
Fast fashion gains ground in emerging markets
As Western Europe becomes oversaturated with fast fashion, leading brands are looking elsewhere for growth. As a result, the concept is spreading far beyond its homeland into every region. Armed with considerable fashion credentials and global brand awareness, giant fast fashion brands are increasingly turning their attention towards emerging regions such as Latin America and the Middle East and Africa. North America and Asia Pacific are becoming increasingly dominated by fast fashion with expansion of both domestic brands such as La Chapelle and Forever21, as well as international giants H&M and Zara. As the rest of the industry reacts to the dominating force of fast fashion, many apparel players are aiming to implement more reactive supply chains, speeding up production of stock and increasing the quantity of trend-led products. Luxury companies are also reacting by moving towards a “See Now, Buy Now” model, appealing to consumers’ desire for instant gratification, illustrating the widespread disruption fast fashion will continue to exert on both industry developments and consumers’ expectations.
Asia Pacific boasts the largest apparel and footwear market in the world valued at USD595 billion in 2016. The region is predominantly driven by China’s performance which slowed in 2016 with 3% growth due to cooling economic growth, a depreciating currency and consumer shifts. Nevertheless, the region is still expected to account for 47% of global absolute value growth to 2021 increasing by USD83 billion. As one of the fastest growing categories in Asia Pacific, childrenswear is expected to record a CAGR of 6% over 2016-2021, generating absolute value growth of USD19 billion. Womenswear remains the cornerstone of the apparel and footwear industry, accounting for 38% of global sales in 2016. However, menswear is expected to outpace womenswear in terms of growth, with a CAGR of 2% to 2021 in comparison to 1% for womenswear. As male consumers continue to place a greater emphasis on their appearance, men’s fashion is moving to the masses, with softening attitudes towards how men should dress across all regions. The proliferation of athleisure, adoption of sportswear in social settings and greater availability of fashion-orientated athletic items is fuelling consumer expenditure on a category that was once dominated by basic product offerings.