Development Trends of the Global Apparel Market

1. Analysis of the global macro market background

According to Statista data, by 2023, the global apparel market will have reached $673 billion, a figure equivalent to Belgium’s GDP. Despite the current slowdown in growth, the industry has shown no signs of regression as consumers remain keen to pursue the latest fashion trends.

Even in a downturn, the fast fashion industry has maintained a high turnover rate with its low-price strategy. At the same time, consumers’ interest in luxury goods and affordable luxury fashion is also growing, allowing people to stay fashionable at a lower cost.

The fashion market is widely segmented, covering clothing, footwear and accessories. Among them, clothing dominates, accounting for 59% of global sales, accessories account for 28%, and footwear accounts for 13%. Due to seasonal and style changes, consumers change their clothing more frequently, while footwear and accessories are replaced less frequently. In addition, many clothing products are affordable and are more likely to trigger impulse purchases.

It is worth noting that the e-commerce penetration rates of these three categories are similar, with accessories ranking first with a penetration rate of 31%, clothing at 26%, and footwear at 22%. Accessories do not need to consider the size issue, and the e-commerce penetration rate is higher. In addition, many accessories are often given as gifts, such as jewelry, and the convenience of online shopping has further promoted its e-commerce penetration rate.

Of the $673.6 billion market size of the global fashion industry, the Asian fashion market contributed $325 billion, accounting for nearly 50% of the share.

2. Analysis of the current situation of regional markets

The Asian market is based on its large and growing population, especially young people and middle-class consumers, who have a growing demand for fashion products. This trend is particularly evident in the two major markets of China and India, which not only have a large population, but also have increasing disposable income for consumers.

At the same time, Asia is also an important manufacturing base for the global apparel industry, and a large number of cheap goods have quickly flowed into the market, which has a profound impact on the global fashion industry.

After experiencing a downturn in 2022, the European market rebounded strongly in 2023 and once again became an important stage for the fashion industry. In addition, e-commerce platforms headquartered in Asia, such as SHEIN and TEMU, have achieved significant growth in both domestic and global markets.
Although the African market is relatively small, it achieved an astonishing growth rate of nearly 11% between 2022 and 2023, surpassing the Americas and Asia. During the same period, the European and Australasia markets grew even more strongly. Data from UNESCO shows that the African fashion market is popular worldwide and has attracted the attention of many Asian fashion websites. For example, SHEIN’s sales in South Africa far exceed those of other local retailers, mainly due to its low-cost and fast-turnover business model.

Spending on fashion categories can also directly reflect the current market situation. Although the Asian market has a large group of fashion consumers, per capita spending is much lower than that of the Americas, Europe and Australia. Asian consumers spend an average of about $275.6 per year in this category, while European and American consumers spend $430.30 and $447.80 respectively. This is mainly due to the higher income levels of consumers in the US and Western European markets, and their demand for fashion categories is more extensive and high-end. Australian consumers spend the most in the fashion category, reaching $504.40, thanks to their high level of living standards and the increased cost of many goods after being imported from the US market.

Although the growth of global fashion sales is mainly driven by Asian e-commerce platforms, consumers in most regions, except Europe, still prefer to buy fashion products in physical stores. In the Americas, 46.38% of fashion is sold through e-commerce channels, while the proportion in Australia and Oceania is 48%. Europe is the only regional market where more than half (50.27%) of clothing sales are sold through e-commerce.

After the epidemic, physical retail channels still have a strong appeal to consumers. This shows that after two years of changes, the global retail industry has returned to a business model centered on physical retail.

3. Analysis of the global fashion consumer audience portrait

Consumer X’s 2023 shopping data report shows that 54.7% of consumers have purchased fashion clothing or accessories online, which is higher than the 49% of grocery consumers. Compared with other retail categories, the proportion of consumers who buy fashion products both online and offline is high (35.49%), while the proportion of consumers who mainly rely on physical stores to buy is low (23%).

However, the overall level of online consumption of fashion products is low, and 63.4% of consumers spend no more than US$320 on fashion products per month. Among them, Generation Z (12 to 27 years old) and Millennials (28 to 43 years old) are the main consumer groups of fashion e-commerce, which is related to the fashion industry’s attention to young groups and the higher consumption willingness of young consumers.

Income level also affects consumers’ shopping choices. The proportion of low-income groups buying fashion online is the lowest, at 50.8%, while the proportions of middle-income groups and high-income groups are 56.5% and 55.3% respectively. However, the age distribution of the consumer audience of fashion categories is relatively balanced, and the number of consumers in each age group is considerable. In addition, Generation X (44 to 59 years old) and Baby Boomers (over 60 years old) also occupy an important position in the field of fashion e-commerce, contributing 52.9% and 40.2% of online fashion purchases respectively.

In terms of geographical distribution, India and China have a higher proportion of online consumers, at 68.4% and 66.8% respectively, and other markets such as the UAE, Brazil and South Korea also perform well. The proportion of online fashion consumers in these regions is ahead of more mature markets such as the United States, Canada and the United Kingdom.

With the popularity of smartphones, the Internet and e-commerce, large e-commerce platforms such as Amazon, Alibaba, eBay, SHEIN and TEMU provide a simple, fast, cheap and convenient fashion shopping experience. At the same time, the prosperity of these overseas e-commerce platforms has also promoted the rise of regional e-commerce platforms, such as Flipkart and Myntra in India, further promoting the popularity of global fashion e-commerce.

4. Analysis of fashion category shopping channels

In the past five years, the proportion of offline sales of fashion categories has remained stable. Even during the peak of epidemic prevention in 2020 and 2021, the proportion of offline sales was not less than 75%. Physical retail is still the core of global fashion shopping habits.

Data shows that in 2022, 78.93% of global fashion sales were completed in physical stores, and by 2023, this proportion rose slightly to 79.08%.

At the same time, the global smartphone usage rate has steadily increased from 52.46% in 2019 to 60.86% in 2023. In the Asian market, up to 70% of fashion e-commerce transaction orders are completed through mobile terminals, while in the American market, this proportion is 51%. In Europe and Australia, the proportion of fashion orders from desktop and mobile is roughly the same, reflecting the characteristics of the early maturity of e-commerce markets.

Although the African market has a low level of e-commerce acceptance and relatively low use of fashion mobile commerce, 43.83% of orders still come from mobile terminals. Although many consumers can only access the Internet through smartphones and feature phones, mobile shopping has not yet become mainstream.

It is worth noting that despite the huge expenditure of Indian consumers in fashion categories and high smartphone penetration, they still prefer to buy clothing in physical stores. Most markets tend to buy clothing in physical stores, especially in the UK, the United States and Australia, where more than 70% of consumers choose physical retail. However, in high-tech and youth-oriented markets such as China and South Korea, the appeal of physical stores has declined, and consumers prefer to choose hybrid channels or online channels.

In terms of sub-categories, global consumers prefer to buy footwear products in physical stores, which is closely related to the trial experience before purchase, but the trial demand for footwear is slightly lower than that for clothing. Relatively speaking, the low rate of physical store purchases of accessories products indicates that consumers have a low demand for “try before buying”.

5. Sustainable development trends are prominent, and consumer behavior is changing

For many years, the fashion industry has not had a good reputation for sustainable development and environmental protection. Especially during the 20-year boom in the fast fashion sector, the industry’s production methods have been criticized, among which the mountains of unsold goods have become a prominent problem.

However, the fashion industry has also demonstrated its ability to adapt to changes and is now gradually moving to the forefront of sustainable design, manufacturing and distribution, and transforming into a more consumer-oriented industry. Driven by young consumers, fashion brands have begun to use the impact of their products on the environment as a selling point and use sustainable development needs to increase revenue.

In the past year, 46.4% of global consumers purchased sustainable clothing, 1/3 of consumers chose shoes made of sustainable materials, and 20% purchased sustainable accessories. Clothing is a major category in the fashion market, and sales of sustainable products are generally high. However, only about a third of consumers in the UK buy sustainable goods.

In developed markets such as the United Kingdom and the United States, due to the deep-rooted fast fashion culture, consumers often want to buy more goods at lower prices, which also leads to the generation of more waste.
After the epidemic, demand for fashion categories has rebounded significantly, and local economies have recovered from macroeconomic impacts such as inflation and supply chain disruptions, and are expected to maintain growth momentum in the future. The specific performance is:

38.9% of global consumers plan to increase spending on clothing products;
31.1% of consumers plan to increase their budget for footwear products;
24.7% of consumers plan to invest more in accessories.

Regional market growth trends vary. In the next 12 months, actual spending on fashion categories in the Indian market is expected to grow by 64%, with spending on footwear growing by 49% and spending on accessories growing by 52%. Spending on fashion categories will also grow strongly in China, Egypt and the United Arab Emirates. In developed markets such as the UK, Australia and South Korea, some consumers plan to control fashion spending.

Of particular note is the weak demand growth in the UK market, with all three segments of the fashion category expected to experience an overall decline in spending in the coming year. This reflects that the British market has not yet completely emerged from a technical recession in 2023 and consumer confidence continues to be sluggish. Even if young consumers remain enthusiastic about fashion products, the overall demand situation remains sluggish.