The apparel and footwear market saw value growth of 1.2% in 2017; an improvement over 2016 which recorded the weakest growth since the global recession. But at 3.1% in 2017, volume growth outpaces value growth and is expected to continue doing so, over the forecast period. Indeed, fast fashion brands continue expanding across emerging regions, while the majority of consumers still rank price as a top factor in their fashion purchasing decision despite signs consumers are becoming more sensitive to ethical and environmental credentials in the items they purchase.
After showing signs of a slowdown, China’s economy is back on track, and the somewhat restrained spending on discretionary items seen in 2016 has been left behind. As a result, China is set to overtake the US as the largest apparel and footwear market in 2018, with demand for fashion being fuelled by the country’s burgeoning middle-class population. Also propelled by its robust economic performance and growing middle class, India is at the forefront of future growth opportunities. The Indian market is forecast to become the world’s third largest apparel and footwear market in the next five years after China and the US, as demand for fashion in the country is boosted by the rise of e-commerce and social media influence.
Sportswear fuels global growth in apparel and footwear and spend per capita in the category is anticipated to grow from USD40 in 2017 to USD47 by 2022. Sportswear benefits from consumers increasingly seeking to convey their healthy lifestyles, and public policies in key markets, such as the Chinese national programme to develop the domestic sports economy. Also, athleisure continues to proliferate as sportswear brands continue combining style and performance through designer collaborations, while a number of fashion brands adopt the technical attributes of sportswear. Jeans manufacturers in particular are developing more comfortable jeans for example, Invista’s COOLMAX technology but conversely, rigid vintage-inspired denim is also enjoying a revival with the growing popularity of 1990s-style fashion and nostalgic Americana.
Social and environmental concerns are on the rise, especially in developed markets. Hence the rapid rise of second-hand fashion platforms such as ThredUp and Vestiarie Collective, and designerwear rental companies, like RentTheRunway. “Slow fashion” has also emerged as an alternative for consumers wishing to buy less in favour of more sustainable and ethical items. However, globally, the majority of consumers still rank features such as style and value as the main factors in their purchases. In this context, fashion brands are set to innovate to create more sustainable and fairer processes, while selling their products at reasonable prices such as LA-based Reformation for example, which recently introduced jeans made of 100% recycled material.
H&M’s recent woes are not only indicative of the Swedish retailer’s product cycle time and assortment mix issues but, more profoundly, that the global fashion competitive landscape is changing rapidly with digitalisation and the emergence of pure e-players like Boohoo and Asos. But although e-commerce continues to grow, the vast majority of sales still take place in stores, leading retailers and brands to focus on experienced-based advertising and unique retail environments to adapt to consumers’ preferences shifting from “owning” to ‘being’. Over the forecast period, this trend is expected to accelerate, while online sales are set to exceed USD370 billion by 2022.