TEXTILE AND APPAREL MARKET ANALYSIS

The global textile and apparel market is currently facing growth challenges due to the presence of a large number of small players and availability of low-cost alternatives. While the sector provides livelihood to millions of people worldwide, the fragmented nature of industry makes it difficult for big brands to capture a large market share and achieve economies of scale. There are thousands of small textile mills, weavers, tailors and embroidery workshops operating across the globe, especially in developing regions. These small entities collectively hold a major chunk of the market. However, functioning with low capital and outdated machinery, they are only able to produce inexpensive, low-quality products and survive on tight margins. This flooding of the market with cheap alternatives limits the scope of premiumization and inhibits growth trajectory of organized textile players.

Opportunity: Rising living standards and spending power in developing nations

Rising living standards and spending power in developing nations will present significant opportunities for the global textile and apparel market in the coming years. As per projections by the World Bank, the proportion of middle-income consumers in developing countries will rise substantially by 2025. These consumers will have greater discretionary spending capacities and demand for variety in clothing and fabric types.  The increase in average household incomes in Asia and Africa provides immense scope for textile and clothing brands to tap into this consumer base. For instance, according to data by the African Development Bank, average annual household income in Nigeria grew by over 10% between 2020-2022 to reach USD 6,200. Similarly, household income levels rose steadily in Bangladesh and Vietnam over the same period. As disposable incomes swell, demand for upgraded apparel and home textiles from these markets will see exponential growth. Local retailers and international brands must design and develop products that meet the aspirations of this emerging middle class.