Rising unemployment and economic uncertainty due to COVID-19 have had a detrimental impact on the way consumers shop for apparel. Impulsive spending on apparel products is off the cards now, and ‘value for money’ has become the key criterion to attract the shoppers. The Asia-Pacific (APAC) region is set to emerge as the epicenter of value apparel market by 2024 with its market share expected to reach nearly 50% during the same period – compared with 26%, 22% and 3% share of Europe, Americas and Middle East & Africa, respectively, says GlobalData, a leading data and analytics company.
According to GlobalData, value (products with prices at the lowest end of the market/sector) apparel sales are forecast to grow at the highest compound annual growth rate (CAGR) of 3.5% during 2019-24 compared with CAGR of 1.5%, 1.9% and 1.9% of premium, luxury and mass market sales, respectively. GlobalData estimates the value apparel sales to grow by US$42.4bn between 2019 and 2024.
China was the largest value apparel market in terms of sales in 2019, followed by the US and the UK. While China will retain its dominance through to 2024, India is expected to surpass the UK, becoming the third largest and the fastest growing value apparel market by 2024.
GlobalData’s estimates India’s value sales to account for nearly 23% of the total apparel sales in 2024. Economies of the likes of China and India are home to the world’s largest growing middle classes and thus play a key role in driving global value apparel demand. This makes them an attractive market for established value fashion brands.
Ankita Roy, Retail Analyst at GlobalData, says: “The apparel sector is the hardest hit domain by COVID-19 within retail with shoppers trading down on clothing and footwear purchases. However, 2020 can be said to have provided favorable conditions to value retailers as more shoppers gravitate towards value for money offerings. To capitalize on this, value retailers should aim to maintain consumer interest and encourage the spend by creative digital marketing on social media platforms like Instagram and Pinterest that hold significant appeal.”