$95B Global Denim Market on the Horizon by 2030: What Does It Mean For Developing Countries?

The New Denim Outlook?

Denim, renowned for its versatility and durability, stands as a cornerstone in the global fashion industry. Its unparalleled adaptability seamlessly transitions from casual wear to high fashion runways, with classic blue jeans, trendy denim jackets, and skirts, solidifying its place in wardrobes worldwide.

The denim market, worth billions of dollars, is expected to keep growing in the years to come. According to Statista, the projected worth of the global denim jeans market is expected to reach approximately $95 billion USD by 2030, marking a significant increase from $64.5 billion USD in 2022. As the global denim market continues its expansion, European leaders currently hold the reins in denim imports. This dynamic presents significant opportunities for developing Asian countries to establish their presence and carve out a niche in the market.

EU Driving Denim Demand?

Europe stands as a pivotal player in the denim trade, boasting a robust appetite for this iconic fabric. In 2022, the value of denim imports into Europe, including intra-EU imports, surged to €10.02 billion (~$11.836? billion USD), up from €8.33 billion (~$9.82 billion USD) in 2017 (See Fig. 1). This influx translated to over 830 million units of clothing. Over the past five years, Europe's denim import market has displayed steady growth, with an average annual increase of 3.76%. Reflecting heightened demand for premium offerings, the average import price for denim trousers in the EU spiked to €12.05 in 2022, witnessing a notable uptick from €10.36 in 2017.

What Does This Mean for Developing Countries?

Growing demand presents significant export opportunities for developing countries. This is evident in the context of denim imports into the European Union, where developing nations retained a substantial share, accounting for 47.3% of the total import value in 2022. While there was a slight decline from 2017 figures, this statistic highlights the ongoing reliance on suppliers from developing countries. Importantly, these nations have experienced a moderate annual growth rate of 2.77% since 2017, albeit slightly lower than the overall growth rate of the denim segment.

In recent years, the dominance of denim imports into the EU has been attributed to Bangladesh, Turkey, and Pakistan. Collectively, these three countries accounted for a substantial 71% share of all denim imports into the EU in 2022 (See Fig. 2). Bangladesh, in particular, demonstrated a notable annual export growth rate of 5.9% between 2017 and 2022 (excluding intra-Europe). Conversely, China experienced a decline in denim exports, averaging a decrease of 8.6% per year during the same period. This decline mirrors China's strategic shift away from apparel manufacturing towards higher-value manufacturing sectors. It remains important to see this as a promising growth prospect for developing countries.

An Opportunity Has Been Created?

These trends underscore the resilience of the high-volume, lower-price denim market. Despite Turkey's higher production costs, it remains a pivotal denim production hub. Developing nations like India are well-positioned to strengthen their foothold in the market, capitalising on advantages such as lower input costs and favourable trade agreements. However, it's imperative for these countries to not solely rely on cost competitiveness but also prioritise enhancing product quality, sustainability practices, and supply chain efficiency. Through strategic investments in these areas, they can distinguish themselves and appeal to brands and consumers in the expanding European markets.