The global apparel market is predicted to grow at a healthy rate in the coming years. The apparel and fashion industry encompasses a wide variety of garments and uses almost all the textile manufactured. Broadly, the industry is divided into - clothing for men and boys, clothing for women and girls, and clothing for children.

The global apparel consumption market has arrived at using a bottom-up approach to estimate and validate the market size and related sub-markets. The global apparel industry was valued at $1,449.0 billion in 2018, registering a growth of 4.6 percent in comparison to the last year.

Growth of the global apparel market is expected to remain moderately strong, owing to increasing disposable income in middle-class people globally to shorten the fashion cycles.

During the forecast period 2020 and 2025, the market is estimated to grow at 4.8 percent to reach $ 2,006.4 billion, driven by strong growth in the Asia-Pacific market. The other significant factors driving the growth of the global apparel market are - growing population, rapid urbanization, and shift in the global economic power base. 

Market Scope

The fashion and apparel industry includes all the companies that design and sell clothes, footwear, and accessories. The scope of products varies from market to market, and the product category, from basics to luxury products - everything is defined in a particular category. 

Traditionally, the apparel business belongs to wholesalers, selling the bulk of goods to retailers. Later on, then items will be marked-up and sold to consumers at a profit. However, at times, it becomes quite challenging to draw a line between wholesalers and retailers. The most common types of operation in textile and apparel businesses are: wholesales and retailers.

However, the report is highly focused on the retail operation. 

Research Methodology

The apparel market research has been prepared by focusing on two kinds of research - primary and secondary to arrive at the global consumption of apparel. The primary sources are apparel manufacturers, raw material suppliers, association representatives, and industrial users. The secondary sources used in the research are: investor relationship presentations, annual report & other company pages, paid databases, news agencies, and interviews with the industry experts on the supply side of the value chain. 

The secondary research objective was to gather key information about the industry’s supply chain, market’s monetary chain, market segments, the total pool of the global players, regional and country-level market. 

Primary research was aimed to validate the information gather during secondary research and collect other insightful information from the industry experts. 

Market Landscape

The market landscape of the global apparel market is discussed in the form of key drivers, restraints, and opportunities pertaining to this industry were identified. Let’s discuss more on market drivers.  

Market Drivers:

 Market drivers are responsible for promoting and pushing the growth of the apparel market industry. They play a vital role in designing the business strategy to increase revenue with the overall growth of the industry. The major market drivers in the apparel industry are:

1) A rise in millennial and Gen Z Population

The spending power forces to contribute to the global economy are Generations Z and Y. According to Forbes, millennial in the United States spend $ 600 billion annually and are projected to make up 35 percent of spending by 2030. Millennial are young spenders. As soon as they enter their 30s, they will be an increasingly important consumer group. 

2)Increase in disposable income & per capita apparel expenditure in emerging economies

Growing disposable income in emerging economies will result in increasing wallet size, which indeed will result in consumers with more money to spend and greater enthusiasm for lifestyle consumption. The per capita apparel expenditure in India and China has increased by 31 percent and 27 percent in er 2019 as compared by 206. The trend is estimated to continue in the near future. 

3) The increasing influence of social media, micro-influencers, & fashion icons

Social media channels have turned into a lucrative marketing tool where shoppers are scrolling to social feeds, and bloggers are discovering the latest trends and cover must-have fashion items. Shoppers are not limiting social media channels to inspiration; they are also making purchases via social media channels. 

Hence, retailers are exploring social media marketing to leverage the shopping capabilities and boot sales volume.

4) Growing penetration of e-commerce and increasing cross-border e-commerce.

The fashion world is moving online; an estimated 1.8 billion people across the globe purchased goods online. E-retail sales across the world summed$2.8 trillion U.S. dollar, the projected growth of e-retails is 4.8 trillion U.S. dollars by the end of year 2021.

By the year 2020, consumers are predicted to spend $1 trillion on cross-border e-commerce, and more than 900 million consumers have international social media connections. Hence, fashion tycoons are getting opportunity to grow their potential consumers, and boost revenues on global digital platforms. 

Market Restraints

Market Restraints are anticipated to hinder the overall growth of the apparel and fashion industry. The factors pose a hurdle to industry growth and keep a check on the significant development of the industry. 

1) Increasing awareness and demand for sustainability

Fashion consumers across the globe are choosing eco-fashion over any other. They expect eco-friendly fabrics, reduced emission of pollutants, a conservation-minded use of resources, higher social commitment, and employee-friendly production.  

However, only the fewest consumers are willing to pay more for greener products. This inspires brand apparel companies to adopt sustainable practices across the entire value chain. Brands are attracting potential consumers by making and marketing more sustainable products.  

2) Rising fast fashion consumer demand

Gone are the days when fashion brands used to spoon-feed trends to consumers. For many decades, this “push model” has worked for fashion players. Today’s fashion world is changing this push model to pull model. In many segments in the mass market, trends are more likely to pop up from the street. 

The changing era of fast-changing preferences and shifting from push to pull model, responding to demand shift, and tailor production, create a lot of challenges for stakeholders. The fashion brands are under the continuous pressure of bringing new styles more frequently, switch out lines mid-season,

smaller batch sizes, and increased on-demand replenishment due to a rise in fast fashion. 

3) A slowdown in the global economy

The global economy is going through a synchronized slowdown; the growth of the apparel and fashion industry has downgraded to 3 percent in the last year 2019 - the slowest pace since the global financial crisis. The global economy will continue to be weekend by rising trade barriers ad increasing geopolitical tensions.

By the end of year 2020, the US-China trade tension will collectively reduce the global GDP by 0.8 percent. The other factors responsible for the growth slowdown are low productivity growth, aging demographic in advanced economies, and other country-specific factors in several emerging market economies. The overall downturn in the global economy would have its direct percussion on the fashion industry. 

Opportunities

Market players need to focus on the opportunities as they bring revenue to their pockets. Additionally, market players should case on these revenue pockets to gain a competitive advantage in this highly competitive market.

1) Growing demand in emerging economies

The lower manufacturing cost of apparel in developing countries such as China, India, Bangladesh, Vietnam, and many others has led to an increase in production capacities of clothing in the Asia Pacific region. The primary reasons for the lower manufacturing cost are lower labor cost, government support, less stringent environmental regulations, availability of raw materials, and others.

Apparel forms a large part of consumption in these emerging economies. Factors driving the growth in developing countries are increasing disposable income, the youth-dominated population, rising buying power, increasing fashion awareness in rural areas. Also, the growing per capita consumption of apparel and the youth-dominated population will create a significant opportunity for apparel and fashion brands. 

2) Increasing demand for secondhand clothing

Millennials and Gen Z are driving the growth of secondhand. Currently, the millennial and boomers are the biggest secondhand consumers, accounting for 33 percent and 31 percent of total resale shoppers. 

The secondhand market is currently valued at $24 billion and is predicted to grow to $51 billion in next 5-years and is expected to reach $64 billion by 2028. 

The secondhand market looks so dynamic that retailers are eager to get in on the circular fashion game. For today’s fashion consumers, the line between new and used apparel is getting blur. And that’s what bringing a significant transformation in retail world.

Porter's Five Force Analysis

The report has been analyzed considering Porter's five forces to identify the competitive forces shaping the apparel and fashion industry. Porter’s model is designed to enhance a company’s profitability by analyzing the competitive level. The five forces of porter’s model aids businesses to determine the corporate strategy by identifying the industry’s structure.

The five forces considered in Porter’s model are:

1) The threat of New Entrant

New industry players are bringing new and unique business ideas to the table. Doubtlessly, new bees are getting smarter with smart business technology; they know the various way to popularize their products. Apparently, social media is their favorite and more effective one. 

For new entrants, the apparel industry offers, "high risk, high reward" approach. And it's not too difficult to get a foot into the door and copy others. The penetration of technology and growing e-retail space in the entire value chain has enabled the startups to enter the fashion industry with minimum investments and lesser economies of scale. 

2)Threat of Substitute 

This force is almost negligible as in the apparel and fashion industry, and there is too little to substitute clothes. The "substitution" in the fashion industry is just competition. 

3) Bargaining Power of Supplier

Suppliers have little control over the apparel and fashion industry. Most apparel businesses source their products from third party manufacture by offering them just a fraction of profit.

Hence, they are dispensable and can be swapped out. As a result, the apparel industry's investments are relatively low and will stay low until the global growth gap reduces significantly. 

4) Bargaining Power of Buyer

In the apparel and fashion industry, buyer power is a relatively larger force. The most critical force is buyers' bargaining ability, as buyers can choose to push prices down, not to buy products, or switch retailers.

Buyers have many options to shop for apparel and fashion goods. So, a little incentive to stay with one particular company gives them indirect bargaining power. 

5) Degree of Competition

The fashion and apparel industry is highly competitive as large numbers of retailers sell similar products. And brands allow some businesses to sell apparel for significant rates. 

In the industry, there is little innovation, so the market is rapidly becoming saturated with very similar products. The fashion industry is tough to get into and is almost becoming a "race to the bottom".

Road Ahead

In the apparel industry, the retail market's growth for apparel would be driven by developing/emerging economies. The fastest-growing apparel market will be India and China, with a CAGR of 8.2 percent and 9.6 percent, respectively, between 2020 and 2025. 

To know more about the industry insights, download the "Global Apparel Market Report" here.