1. Global Macro Market Background Analysis
According to Statista data, as of 2023, the global apparel market size is 673 billion US dollars, a scale equivalent to the GDP of Belgium. Although the current growth rate is slowing down, the industry does not show signs of regression, as consumers still desire to keep up with all the latest fashion trends.
Even in times of economic downturn, the fast fashion industry, which produces inexpensive clothing, maintains rapid turnover, and consumer interest in more expensive goods and affordable fashion is growing. People can also maintain a fashionable attitude and find satisfaction at a low cost.
The fashion sub-markets cover a wide range, including clothing, footwear, and accessories. Clothing holds the main share of the market, accounting for about 59% of global sales, followed by accessories at 28%, and footwear at 13%.
Clothing dominates due to factors such as seasonality and style; consumers tend to update their wardrobes more frequently compared to footwear or accessories. Many clothing items are also cheaper than footwear, making them more likely to be impulse purchases.
The e-commerce penetration rate for the three sub-categories is very close, ranked as follows: accessories 31%, clothing 26%, and footwear 22%. Accessories, which do not require fitting for size, have become the main category with a higher e-commerce penetration rate. Also, many accessories are often given as gifts, especially jewelry, making online purchases more convenient and thus increasing the e-commerce penetration rate for this category.
Out of the global fashion industry's market size of 673.6 billion US dollars, the Asian fashion market contributes 325 billion US dollars, almost accounting for 50% of the global fashion market.
2. Analysis of the Current Situation of Regional Markets
- Growth Trends in Regional Markets
Asia, with its large and growing population, is a market that leans towards the younger generation, and an increasing number of middle-class consumers are eager to purchase fashion products, a trend particularly evident in China and India, the two largest markets. These two markets have a large population and a consumer base with a growing level of disposable income.
In addition, Asia is also the manufacturing base for most of the products in the global clothing industry, and the rapid spread of a large number of cheap goods in the market has also influenced the development of the global fashion industry.
The European market, greatly affected, experienced a strong growth trend from the downturn in 2022 to the recovery in 2023, and once again became an important battleground for the fashion industry.
Online shopping platforms such as SHEIN and TEMU, which are headquartered in Asia, have seen significant growth in both the Chinese and global markets.
At the same time, the African market is also showing a high level of growth. Although the African market is relatively small compared to other global markets, it achieved an astonishing growth rate of nearly 11% from 2022 to 2023, leading the Americas and Asia. Only Europe and Australasia showed stronger growth trends during the same period.
According to statistics from UNESCO, the African fashion market is popular in both its regional and global markets. At the same time, the African market has also become a target market for Asian fashion websites to successfully enter. For example, it is estimated that SHEIN's sales in South Africa are 10 times that of other local retailers in the country. Like other markets, SHEIN's appeal to African consumers lies in the low-cost and fast-turnover product attributes.
- Analysis of Fashion Category Spending by Consumers in Regional Markets
It is also worth noting that spending on fashion categories can directly provide a basis for the current market situation.
The number of fashion consumers in the Asian market is huge, but on average, per capita consumption in Asia is significantly lower than in the Americas, Europe, Australia and other markets.
Asian fashion consumers spend an average of $275.6 per year in this category, while European and American consumers spend $430.30 and $447.80 respectively. The reason for this significant difference is that consumers in the US and Western European markets have higher income levels, so their demand for fashion categories is also higher, whether it's high-end luxury goods or cheap fast fashion products, both have won the favor of consumers in these two markets.
Australian consumers spend the most in the fashion category, with an average annual expenditure of $504.40. This is not only due to a high standard of living, but also because many goods are sold in the US market and then imported into the country, resulting in higher costs.
Although the growth in global fashion sales is largely driven by Asian e-commerce platforms, consumers in all 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 in Australia and Oceania, this ratio is 48%. Europe is the only region where e-commerce channel sales exceed those of physical stores, at 51.6%.
In the Americas market, 46.38% of fashion is sold through e-commerce channels, while this proportion is 48% in Australia and Oceania. Europe is the only regional market where e-commerce sales of apparel exceed half (50.27%).
After the pandemic, physical retail channels will continue to have a strong appeal to consumers. This indicates that the global retail industry has undergone significant changes within two years, reverting back to a business model based on physical retail.
3. Global Fashion Consumer Audience Profile Analysis
In 2023, Consumer X's shopping data report pointed out that 54.7% of consumers have bought fashion clothing or accessories online, a proportion that exceeds the core category of online shopping, groceries (49%).
Compared to other retail categories, the proportion of global consumers who purchase fashion products both online and offline is relatively high (35.49%), while the proportion of consumers who mainly purchase in physical stores is relatively low (23%).
However, the current level of online consumption for fashion products is generally low, with 63.4% of consumers spending no more than $320 per month on fashion items.
- Among online consumers, Generation Z (aged 12 to 27) and Millennials (aged 28 to 43) have the highest proportion of online fashion consumers. This is because the fashion industry focuses more on younger groups, and younger consumers are more likely to spend a larger proportion of their income on themselves.
- Low-income consumers have the smallest proportion of online fashion purchases, at only 50.8%, just behind middle-income consumers (56.5%) and high-income consumers (55.3%).
- In addition, older consumers have also made significant contributions to global fashion e-commerce consumption. 52.9% of Generation X (aged 44 to 59) and 40.2% of Baby Boomers (aged 60 and above) also purchase fashion online.
The proportions of online consumers in India and China are 68.4% and 66.8% respectively, with other standout markets being the UAE, Brazil, and South Korea. In terms of the proportion of online fashion consumers, these countries are ahead of more mature markets such as the United States, Canada, and the United Kingdom.
At the same time, with the spread of smartphones, the internet, and e-commerce, more and more fashion retail is happening on large websites like Amazon, Alibaba, eBay, SHEIN, and TEMU. These market participants bring a simple, fast, cheap, and convenient fashion e-commerce shopping experience to the public. At the same time, the prosperity of overseas e-commerce platforms has indirectly contributed to the rise of regional e-commerce platforms - such as India's Flipkart and Myntra - which has also helped to open up markets in developing countries and further promote the popularity of global fashion e-commerce.
4. Fashion Category Shopping Channel Analysis
Over the past five years, the proportion of offline revenue in total sales of fashion categories has maintained an astonishing stability. Even during the peak periods of pandemic prevention in 2020 and 2021, the proportion of offline sales in total sales was not less than 3/4. Physical retail is still the pillar of global fashion shopping habits.
In 2022, 78.93% of global fashion category sales occurred in physical stores, and this proportion rose to 79.08% in 2023.
- From 2019 to 2023, the global proportion of smartphone usage steadily rose from 52.46% to 60.86%.
- In the European and Australian markets, the proportion of desktop fashion orders is essentially a "fifty-fifty" split, reflecting the deeply entrenched maturity of this order entry point in the early e-commerce market.
- African consumers have a lower acceptance of e-commerce and also a lower usage rate of fashion mobile commerce. Despite many consumers in the region only being able to access the internet via smartphones and feature phones, the proportion of mobile fashion orders stands at 43.83%.
- Although Indian consumers spend a significant amount on fashion and smartphones are increasingly widespread, they still prefer to purchase clothing in physical stores.
Most markets tend to buy clothing in physical stores, with over 70% of consumers in the UK, the USA, and Australia choosing brick-and-mortar retail. Only in high-tech, youth-oriented markets like China and South Korea has the allure of shopping for clothing in physical stores decreased, with consumers increasingly opting for omnichannel or online channels.
Regarding subcategories, global consumers also prefer to visit offline physical stores to purchase footwear products. Similar to clothing, the sale of footwear products also relies on the pre-purchase try-on experience, but the need for trying on footwear is actually lower than that for clothing.
In the surveyed regional markets, the rate of purchasing accessory products in physical stores is relatively low, indicating that consumers' "try before you buy" demand is also at a lower level.
5. The trend of sustainable development is highlighted, and consumer behavior is changing
For many years, the fashion industry has not had the best reputation when it comes to sustainable development and the environment. During the 20-year boom in fast fashion, the industry's production methods have been scrutinized, and its shortcomings are still criticized. In particular, the pile of unsold items has become one of the most criticized issues in the industry.
5.1 The impact of sustainable development demands on the fashion market
However, the fashion industry is also very good at changing, and now it has become one of the industries at the forefront of sustainable design, manufacturing, and distribution, and it has started to gradually turn to a consumer-oriented industry. Driven by young consumers, the impact of fashion products on the environment has become a selling point for many fashion brands, so using the demand for sustainable development can actually bring additional revenue.
- In the past year, 46.4% of global consumers purchased sustainable clothing, a third of consumers bought shoes made from sustainable materials, and 20% bought sustainable accessories.
- In terms of clothing, a subcategory, the sales volume of sustainable products is generally high because clothing occupies a major share in the fashion market. In the past year, about a third of British consumers bought sustainable products.
5.2 The impact of changes in consumer behavior on the fashion market
As for the change in consumer behavior, after the epidemic, the demand for fashion categories has rebounded significantly, many regional economies have also begun to recover from the macroeconomic impact of inflation and supply chain disruptions, and will maintain the same growth momentum in the future.
- 38.9% of global consumers said that the amount of spending on clothing products will increase in the future.
- 31.1% of consumers will invest more budget in footwear products.
- 24.7% of consumers said they will invest more budget in accessory products.
5.3 Regional market growth trends in the fashion market
In the next 12 months, the growth trend of regional markets is as follows:
- The actual expenditure on fashion categories in the Indian market will increase by 64%, the expenditure on shoes will also increase by 49%, and the expenditure on accessories will increase by 52%.
- The market growth trends in China, Egypt, and the UAE will also show strong growth in spending on fashion categories.
- In developed markets such as the UK, Australia, and South Korea, a relatively high proportion of consumers want to control their fashion spending in the new year.
- Among them, the demand growth in the UK market is particularly weak. The spending in the three sub-markets of the fashion category is expected to decrease overall in the next year, which reflects that the UK market still cannot fully get rid of the technical recession in 2023 and also reflects the continued low confidence of UK consumers. Even though the young consumer group still has a strong demand for fashion products, it still cannot reverse the overall sluggish demand.
