In a time of uncertainty, the longing for style remains strong

The autumn equinox has just gone by. Have you gotten your fall and winter clothes and shoes sorted out? A style change is essential for designers and influencers, and us too. Even when the economy takes a nosedive, like we saw globally in 2022 and part of 2023, staying on-trend can still be done without breaking the bank—at least for shoppers—thanks to the fast fashion world serving up affordable clothes, plus a growing interest in pricier luxury and accessible luxury fashion. Today's newsletter will give you the lowdown on the current state of the apparel industry around the globe and help you keep up with what consumers want.

An overview of the global apparel market

Market states and consumption characteristics

The apparel market is estimated to be valued at $1.79 trillion in 2024 accounting for 1.63% of the global gross domestic product. The apparel market is projected to experience a CAGR of 2.81% between 2024 and 2028. This market accounts for 1.63% of the world's DP.

Except for a sudden decrease in 2020, the global apparel market has shown a small but steady growth in the past 6 years, which is also expected to continue over the next five years.

Top five countries in apparel market size are: United States($358.70 billion), China($313.82 billion), India($101.39 billion), Japan($87.00 billion), United Kingdom ($82.89 billion). The apparel market in the United States is valued at $358.70 billion in 2024 and it is projected to grow at a CAGR of 2.11% between 2024 and 2028.

In market segments such as gender, and age, women's clothing still shares the largest. Apparel and footwear can be broken down into sub-segments including menswear, womenswear, children's clothing, accessories, bags, and shoes. Within this breakdown, there are numerous price categories and styles available to consumers. The global women's apparel market is currently valued at 930 billion and will cross the $1 trillion mark in 2027. Men's apparel market is worth $587.61 billion while that of children's is $274.25 billion.

Then let's look at the consumption figures. In 2023, retail sales of apparel and footwear worldwide amounted to over 1.7 trillion U.S. dollars worldwide. This figure is forecast to increase to two trillion dollars by 2028. Young consumers love to buy clothes at most. 82% of shoppers worldwide aged between 26 and 35 years old have purchased clothes online in the previous 12 months. People aged 36 to 45 are most frequent clothing shoppers with 80% of them making a purchase in the past 12 months. 79% of fashion sales happened in stores, and only 21% of the fashion sales came from online sales. Asians buy the most online (24%) while Africans are the least likely to make online purchases (4.2%). The global athletic footwear market is also expected to see strong growth, resulting in revenues close to 65 billion U.S. dollars by 2028.

The global fashion market is, like many sectors, dominated by sales from Asia. The market here outstrips its nearest rivals in the Americas and Europe two-to-one, with Asian fashion accruing a massive $325bn of the global total of $673.6bn – almost 50% of the world's fashion market. The Asian market is massive in terms of numbers of shoppers but on average, they spend significantly less per person than their counterparts in the Americas, Europe, Australia, and Oceania. Asian consumers spend some $275.60 each per year on fashion, compared to $430.30 in Europe and $447.80 in the Americas. Australasian shoppers spend the most, racking up a spend of $504.40 on average each year on fashion purchases.

Influencing factors

Pessimistic global economy expectations and geopolitical crises are driving up the costs of raw materials, manufacturing, and shipping, which in turn contributes to the rising prices of apparel throughout the supply chain.

In 2024, the global economic outlook will likely continue to be unsettled. As new and ongoing financial, geopolitical, and other challenges weigh heavily on consumer confidence, fashion markets in the US, Europe and China are facing differing headwinds, requiring suppliers, brands, and retailers to bolster contingency planning, among other measures. In the third quarter of 2023, net intent to purchase apparel was 7% in China, but negative 25 in the US and negative 29 in Europe.

Intense climate change. More than $65 billion of apparel exports are at risk of being wiped out by climate events such as flooding and extreme heat. Fashion is responsible for between 3% and 8% of total greenhouse gas emissions. By 2030, extreme weather events could jeopardize $65 billion worth of apparel exports and eliminate nearly one million jobs in four economies that are among the most central to the global fashion industry.

Consumers' changing shopping behaviors

Fast fashion and social media have made it super easy for folks to chase beauty even when the economy isn't doing so hot.

The E-commerce purchase ratio increases, and things become the opposite for physical store purchases

The world's consumers have embraced online fashion shopping above all other sectors, with 54.7% of consumers in the Gen X shopping data having purchased fashion apparel or accessories online in 2023. The sudden shift online occurred in 2020 when Covid lockdowns forced a rapid pivot among fashion retailers not only to sell more leisurewear but to also do so online. We can figure out a rapid increase in annual revenue between 2019 and 2020.

Online spending in fashion, however, is predominantly at the lower end, with nearly two-thirds of shoppers (63.4%) spending no more than $320 a month online on fashion. Again, this is comparable with fashion-overlap sectors such as cosmetics and sportswear.

Asked how they expect their apparel purchases to change over the next year, 30% expect to buy more apparel products online, compared to 24% who expect to buy more in physical stores.

Asked what type of website or app they're most likely to start an apparel product search on, 36% chose a retailer's website or app, as the top option. A search engine like Google or Bing came in second at 31%.

Amazon was the most likely destination for online apparel purchases, followed by Walmart in a distant second. Nike came in third, as many shoppers turn directly to apparel brand manufacturers for online purchases. Fully 8% of respondents chose one of either Temu or Shein. Among Gen Z, a combined 17% of apparel shoppers said they were most likely to complete a purchase on Temu or Shein, with Shein proving slightly more popular than Temu.

Asked how often they return online purchases, 33% said never, compared to 28% who said they never return in-store purchases, as the hassle of sending products back appears to lessen the likelihood of online returns. Still, 34% of apparel shoppers say they've ordered multiple sizes and/or variations of apparel products in the last year in order to pick the best one and send the rest back. This practice, known as bracketing, is expensive for the websites and apps handling these returns.

Fast Fashion's Power Plays

Nearly 40% of USA consumers said that they had purchased apparel from Temu. Until March 2024, Temu has reached younger generations with 52% of Gen Z apparel shoppers saying they had purchased apparel from Temu. For baby boomers, that rate was just 21%. In fact, 22% of all baby boomers said they had never heard of the e-commerce site, compared to just 10% of Gen Z.

The third generation of fast-fashion companies has captured consumers' attention. 40% of US consumers and 26% of UK consumers have shopped at Shein or Temu in the past 12 months.

According to RetailX's research, around 25% of social mentions by influencers in social media are now about leading fashion retailer Zara. Around a fifth are about Shein.

Social media dominate fashion consumption

According to RetailX, 87% of consumers use social media to help them choose what to buy, 26% seek the advice of their peers on fashion choices via social sites and 90% of followers reach out to brands via social media. The rise of user-generated content and influencer culture – where both celebrities and 'civilians' produce their own content and endorse brands and retailers – has become a vital part of the fashion marketing model that's already driving sales for many fashion outlets. More than 40% of consumers prefer fashion influencers who are relatable and authentic.

68% of consumers feel bothered by the amount of sponsored content on social media and 65% rely less on fashion influencers compared to previous years. Consumers increasingly demand authenticity, entertainment, and relatable personalities, unlocking a “new wave” of creators who embrace less-polished aesthetics, quirkiness, humor, and vulnerability. To capture and hold the attention of consumers online in 2024, fashion marketers will likely break free of tried-and-tested routines and explore new avenues for partnering with creators.

Pioneered to some degree by Instagram, it is TikTok that currently rules the roost for fashion brands looking to garner attention through influencer and UGC content. Social commerce in fashion passed 1 billion active users in 2021 and is on track to hit 2 billion in 2024, TikTok has come to dominate the youth market for social media.

Competitor strategies in apparel and footwear

Sustainability

Sustainable fashion is now a key part of the sector and consumers are loving it, with 46.4% of them globally buying sustainable clothing in the past year, more than any other retail sector. And a third have bought sustainable footwear while a fifth of them have bought sustainable accessories.

In several of the largest European countries, a substantial share of consumers acknowledges the importance of buying sustainable fashion, above all in Italy, where almost three-thirds of respondents to a 2023 survey agreed with this sentiment. Well over half of consumers also confirmed this view in France and Great Britain.

Recycling

Second-hand fashion rises in interest in sustainable fashion has given rise to a boom in second-hand fashion sales. The appeal of retro and vintage has also played in here. Second-hand clothing already accounts for the largest single sector, with 28.2% of the world's shoppers having purchased it. Second-hand clothing is now big business in the US and UK, which leads the world. 42% of US shoppers and 37.5% of those in the UK have purchased at least one item of second-hand clothing in the past year, giving rise to a market that has been valued at $43.9bn in 2024 in the US alone.

For consumers looking to save money while enjoying a broad array of wardrobe options, online clothing rental services have become an attractive option. Although just 19% of respondents have rented clothing from a service like Rent the Runway, Nuuly, or Taelor, among those who have, nearly two-thirds of respondents said they would continue to do so at least as much as they did over the past year. Online clothing rental services are quite a bit more popular among younger generations with 33% of Gen Z having used them, compared to just 7% of baby boomers.

Develop outdoor, sport, and casual wear.

One lasting impact of the COVID-19 pandemic has been soaring consumer interest in healthier lifestyles and nature-focused activities, like camping, hiking, and boating. In the US, 82% of people said they had participated in such outdoor activities, compared to 60% in 2020, while nearly half of survey respondents in the UK report spending more time outdoors than prior to the pandemic. In China, by the end of 2021, more than 400 million people were taking part in outdoor sports,190, and between 2021 and 2023, the search volume for “outdoor” on the Chinese marketplace Tmall surged more than 600%. The challenge for all brands will be to establish relevancy among diverse customer segments, from technical outdoor-goers to StockX customers, while staying true to the brand's core.

Reference

Apparel & Shoes, Statista

The State of Fashion 2024, BoF-McKinsey

RetailX Global Fashion 2024

2024 Apparel?Marketing Study, Tinuiti

Global Apparel Industry Statistics (2024), Uniform Market