FW
A new wave of consumerism is sweeping the world, and it's all about ‘premiumization’. Forget bargain hunting; shoppers are increasingly seeking out higher-quality, more luxurious goods and experiences, even if it means paying a premium. This shift is reshaping industries from fashion and food to travel and technology.
In fact, various research reports and market analyses have highlighted this trend. McKinsey & Company’s latest consumer survey revealed that a growing number of consumers, particularly in emerging markets, are showing a willingness to ‘trade up’ to premium products. In India, for instance, the first half of 2024 witnessed a significant increase in demand for premium goods, indicating a change in consumer mindset towards aspirational and quality-driven consumption. GfK's report on the Indian technical consumer goods market further corroborates this trend, highlighting a pronounced preference for premium products, leading to substantial value growth in the sector.
‘Premiumization’ as a trend
Premiumization is more than just buying expensive things. It's a mindset shift where consumers prioritize value, quality, and exclusivity over simply getting the lowest price. Research from Euromonitor International highlights that this trend is driven by factors like rising disposable incomes where a growing global middle class with more spending power is pushing up demand for premium products.
Growing desire for experiences; consumers are willing to invest in products and services that enhance their lifestyle and well-being. Status seeking and self-expression is another factor, as premium products often act as status symbols and allow for personal expression. Moreover consumers are drawn to established brands with a reputation for quality and craftsmanship.
China, India leading the change
While premiumization is a global phenomenon, certain regions and demographics are at the forefront of this trend. Fast growing economies like India and China, with their rapidly expanding middle class and increasing disposable incomes, are witnessing a notable growth in premium consumption. In developed economies, despite lingering economic challenges, a significant portion of consumers continue to gravitate towards premium offerings, indicating a persistent desire for quality and exclusivity. Consumers in the US and Canada are showing a preference for premium offerings in sectors like food and beverages, personal care, and home furnishings. Europeans are are seeing premiumization grow in sustainable fashion, organic food, and wellness services.
Affects of changing demographics
The demographics of premiumization are also undergoing a transformation. Traditionally associated with older, affluent consumers, premium consumption is now gaining traction among younger demographics. Millennials and Gen Z, in particular, are increasingly drawn to premium brands and experiences, driven by factors such as social media influence, the desire for self-expression, and a heightened emphasis on quality and sustainability. Similarly baby boomers with significant disposable income are also embracing premiumization, seeking products that offer comfort, convenience, and health benefits.
The fashion and apparel sector is at the forefront of the premiumization trend. Statista studies show the global luxury fashion market is expected to reach $430 billion by 2025. This growth is being led by a demand for high-quality materials and craftsmanship as consumers are willing to pay more for garments made with durable, sustainable, and ethically sourced materials. In fact, a survey by McKinsey & Company found 60 per cent of fashion consumers are willing to pay more for sustainable products.
The desire for unique and personalized styles is another catalyst as premium brands offer exclusive designs and customization options that cater to individual preferences. Increased focus on brand storytelling and heritage with consumers being drawn to brands with a strong history and authentic narrative.
In terms of segments, premiumization is impacting all segments of fashion Men are increasingly investing in premium suits, shoes, and accessories, seeking both style and quality. Women’s segment is seeing demand for luxury handbags, designer dresses, and high-end activewear growing. Even children's clothing is seeing a premiumization trend, with parents opting for organic fabrics, sustainable brands, and designer labels.
Premiumization therefore is a powerful trend that is transforming consumer behavior across the globe. As consumers become more discerning and prioritize value over price, businesses that can deliver high-quality, unique, and meaningful experiences will be well-positioned to thrive in this new era of consumption.
The term ‘China Shock’ refers to the significant economic impact felt across the globe following China's rapid integration into the world economy in the early 2000s. This phenomenon was characterized by an increase in Chinese exports, particularly labor-intensive industries such as manufacturing, leading to significant job losses and factory closures in many developed economies. The US, in particular, experienced a stark decline in manufacturing employment, estimated at around 2.4 million jobs between 1999 and 2011.
However China Shock was not limited to developed countries. Developing nations, while benefiting from cheaper Chinese imports, also faced challenges in competing with China's low-cost manufacturing prowess. Many industries in these countries struggled to survive, leading to job losses and economic disruptions.
India's experience
India, despite its large and growing economy, was not immune to the effects of the China Shock. While some sectors benefited from increased trade with China, others, particularly those in labor-intensive industries like textiles and apparel, faced stiff competition. Chinese imports flooded the market, undercutting domestic producers and leading to job losses.
Table: Impact on India-China trade during China Shock
|
Year |
India's exports to China ($ bn) |
India's imports from China ($ bn) |
Trade balance |
|
2001 |
1.8 |
1.9 |
-0.1 |
|
2003 |
3 |
3.9 |
-0.9 |
|
2005 |
6 |
11.3 |
-5.3 |
|
2007 |
10.8 |
23 |
-12.2 |
|
2009 |
11.5 |
28.7 |
-17.2 |
|
2011 |
16.4 |
48.8 |
-32.4 |
Source: Ministry of Commerce and Industry, Government of India
The table illustrates, India's trade deficit with China widened significantly during this period, indicating a surge in Chinese imports. This had a profound impact on several Indian industries, including textiles and apparel. However, India's experience was not entirely negative. It also presented opportunities for growth and development. The influx of Chinese investment and technology helped to modernize certain sectors of the Indian economy. Moreover, the increased competition forced Indian businesses to become more efficient and innovative, leading to improvements in productivity and quality.
Impact on textile & apparel industry
The textile and apparel industry was particularly hard hit. China's low labor costs, coupled with its vast manufacturing capacity, enabled it to become the world's dominant player in this sector. Chinese textiles and apparel flooded global markets, displacing domestic production in many countries. The US textile industry is a stark example of the impact of the China Shock. Between 1990 and 2007, the US lost over 750,000 textile and apparel jobs, almost over 60 per cent decline. Many textile mills and apparel factories closed down, leaving entire communities devastated.
Table: Global shift in textile and apparel production
|
Region |
Share in 1995 |
Share in 2019 |
|
China |
18% |
38% |
|
European Union |
24% |
15% |
|
United States |
11% |
3% |
|
India |
4% |
5% |
|
Other |
43% |
39% |
China Shock 2.0
In recent years, there has been growing discussion of a China Shock 2.0, a new wave of economic disruption due to China's evolving economic landscape. Several factors are contributing to this phenomenon:
• Rising labor costs in China: Wages in China have been rising steadily, eroding its cost advantage in labor-intensive industries.
• Technological aadvancements: China is investing heavily in automation and robotics, leading to increased productivity and reduced reliance on labor.
• Shift towards high-value manufacturing: China is moving away from low-value, labor-intensive manufacturing and focusing on high-value, technology-driven sectors.
• Geopolitical tensions: The ongoing trade war between the US and China, coupled with growing geopolitical tensions, is disrupting global supply chains and creating uncertainty for businesses.
Impact on global textile & apparel industry
China Shock 2.0 is expected to have significant implications for the global textile and apparel industry. As China's cost advantage diminishes and it shifts towards high-value manufacturing, production is likely to shift to other countries with lower labor costs. This could lead to a resurgence of textile and apparel manufacturing in some countries, while others may struggle to compete.
One major impact is a shift in production to countries like Vietnam, Bangladesh, and India, with their large pools of low-cost labor, are likely to see an increase in textile and apparel production. At the same time some companies may choose to bring production back to their home countries, closer to their consumer markets, to reduce reliance on long and complex supply chains. Rising cost of labor in China is likely to accelerate the adoption of automation and robotics in the textile and apparel industry globally. And with consumers are increasingly demanding sustainable and ethically produced clothing, innovation will get a boost which will create new opportunities for businesses.
Indeed China Shock 2.0 could result in a shift in production and create new opportunities for businesses in countries with lower labor costs. However, it could throw-up several challenges. First, the shift in production to other countries is likely to intensify competition in the global textile and apparel market. Also, the ongoing trade war and geopolitical tensions could lead to further disruptions in global supply chains, creating challenges for businesses. And companies will need to invest in new technologies and upgrade their skills to remain competitive in the face of automation and robotics.
The bottomline is, China Shock 2.0 is a complex and multifaceted phenomenon that is likely to have a significant impact on the global textile and apparel industry. While it presents challenges, it also offers opportunities for growth and development. Companies that can adapt to the changing landscape, invest in new technologies, and focus on sustainability are likely to thrive in the new era of global textile and apparel production.
After a successful Autumn Edition, where international visitor numbers surged, Intertextile Shanghai Apparel Fabrics is gearing up for its Spring 2025 Edition, set to take place from March 11 to 13 at the National Exhibition and Convention Center (Shanghai). Organizers are keen to build on the success of 2024, which saw a doubling of international visitor numbers in spring, followed by another strong performance in autumn. The return of international participants signals the fair’s resilience and highlights its global importance.
Major attractions for Spring 2025
Several key features are set to enhance the upcoming Spring Edition. These include the Intertextile Directions Trend Forum for Spring/Summer 2026, which will spotlight the latest design trends, as well as the highly anticipated return of the Econogy Hub and the Digital Solutions Zone. Additionally, the fringe programme will expand, further reinforcing the fair’s commitment to industry trends, sustainability, and digital innovation.
The Econogy Hub, which made its debut during the Autumn Edition, will once again be a focal point. This zone, an evolution of the previous All About Sustainability section, showcases sustainable products and services. It will be supported by Econogy Talks, a platform for discussing key sustainability issues, and the Econogy Finder, a digital tool that helps buyers discover eco-focused suppliers. These initiatives are aligned with Messe Frankfurt’s TexpertiseEconogy sustainability concept, part of its global Texpertise Network that encompasses over 50 textile events worldwide.
Focus on digital transformation and functional fashion
Alongside sustainability, digital transformation will be another central theme. The Digital Solutions Zone will feature cutting-edge offerings, such as AI-powered fabric search, 3D visualization tools, and advanced design software. These innovations are intended to enhance the sourcing experience for buyers and exhibitors alike. Other zones will focus on specialized categories like Accessories Vision, Beyond Denim, Functional Lab, Premium Wool Zone, Salon Europe, and Verve for Design, offering a wide variety of products and solutions for the global textile market.
Wilmet Shea, General Manager of Messe Frankfurt (HK) Ltd, credits the fair's success to its wide range of offerings. She highlighted that the two shows this year drew nearly 8,000 exhibitors from 29 countries and regions, reflecting the event’s scale and its key role as a platform for discovering trends and innovations. Looking ahead to the upcoming Spring Edition, Shea emphasized the continued focus on digital and sustainable themes, aiming to provide forward-thinking exhibitors with the best opportunities to engage with relevant buyers.
Global participation reflects industry resilience
The Spring and Autumn Editions of 2024 both witnessed significant increases in international participation, a clear indication of the fair’s strong post-pandemic recovery. The 2024 Spring Edition saw a 99 per cent increase in international visitors and a 22.9 per cent rise in overseas exhibitors. The Autumn Edition followed suit, with over 50 fringe events, including 25 with a sustainability focus, and the introduction of new pavilions from Malaysia and Uzbekistan.
The success of these editions has fueled optimism for the 2025 Spring Edition, with many participants already signaling their intent to return. The extension of China’s visa-free policy for 16 countries, including Belgium, France, Spain, and Switzerland, until the end of 2025, is expected to further boost international attendance.
Sustainability and innovation at the core Sustainability continues to be a key factor in the fair's development. Linda Wegelin, Chief Commercial Officer of Testex AG, who participated in the 2024 Spring Edition, emphasized the importance of China’s visa-free initiative for international trade, noting that it signals a return to pre-pandemic business conditions. Wegelin highlighted the growing demand for sustainability throughout the supply chain, driven by consumer pressure for change. She also pointed out that Intertextile provides a valuable platform for discovering innovative sustainable solutions.
Innovation is a key aspect of the fair’s attraction. Monika Januavita Kopeng, Lead Fashion Designer at Love, Bonito Singapore, emphasized the value of attending the Autumn Edition, where she engaged with exhibitors from different countries and discovered new fabrics and technologies. Kopeng mentioned that the materials and innovations found at the event would benefit her brand, and expressed anticipation for participating in the upcoming Spring Edition.
Looking ahead
Intertextile Shanghai Apparel Fabrics - Spring Edition 2025 will continue to be co-organized by Messe Frankfurt (HK) Ltd, the Sub-Council of Textile Industry (CCPIT), and the China Textile Information Centre. The event will run alongside other major fairs, including Yarn Expo Spring, Intertextile Shanghai Home Textiles - Spring Edition, CHIC, and PH Value, further amplifying its significance as a comprehensive textile trade platform. With sustainability, digital transformation, and global trends at its core, the upcoming edition promises to be another key milestone in the textile industry’s recovery and growth.
The 75th edition of the Cairo International Clothing, Textile and Accessories Exhibition, ‘Cairo Fashion & Tex,’ welcomed around 500 international buyers from Arab, African, and European countries. Held from October 3-5, 2024, the event is aimed at securing export deals for Egyptian companies in the clothing and textile sectors.
Organized by Pyramids International Group under the leadership of Mohamed El-Sherif, the exhibition features 550 Egyptian and foreign companies showcasing the latest innovations in clothing and textile technologies. It is held under the patronage of Egypt’s Ministries of Industry and Investment, with support from the Ready-Made Garment Chamber of the Egyptian Federation of Industries.
The event has drawn key figures such as Younes Al-Mufti, President of the Moroccan Association of Textile Importers, NihadAkinci, Chairperson of the Egyptian-Turkish Businessmen Association, and Sultan Allan, head of Jordan’s Textile and Readymade Clothes Syndicate. Karima Al-Mars, Economic Counsellor at the Moroccan Embassy in Cairo, also attended the inauguration.
Al-Mufti praised the warm reception of the Moroccan delegation, which consists of 30 importers. He emphasized the delegation’s interest in securing export deals and boosting trade relations with Egypt. Similarly, Akinci highlighted the historical trade ties between Egypt and Turkey, noting the importance of exhibitions like ‘Cairo Fashion & Tex’ in strengthening economic collaboration.
El-Sherif stated that numerous bilateral meetings have been held, resulting in the signing of contracts. Export deals from the exhibition are expected to surpass $30 million. He underscored that such events contribute to Egypt’s broader goal of reaching $145 billion in annual exports.
Apparel imports in key markets have shown some recovery in Q1 2025 reveals Wazir Advisors ‘Q1 FY25 Wazir textile & apparel index’. The latest import data indicates the global apparel market has seen some positivity. Key markets, including the US, EU, UK, and Japan, witnessed a consistent increase in apparel imports compared to the previous year. This suggests a growing demand for apparel products in these regions, which could be attributed to factors such as economic recovery, changing consumer preferences, and increased retail activity.
Rising imports a sign of positivity
The study shows, US apparel imports rose by 8 per cent year-over-year (YoY) to reach $ 8 billion. EU imports increased 5 per cent YoY to $8.1 billion. Similarly, UK’s imports saw a 7 per cent YoY growth, reaching $1.6 billion. The Japanese market experienced the most significant increase, with imports growing by 16 per cent YoY to $2.2 billion. This suggests that consumer confidence and spending are gradually recovering, particularly in the wake of economic uncertainties.
Apparel retail scenario
Interestingly in August 2024, US monthly apparel store sales are estimated at $19.1 billion which is 1 per cent lower compared to the previous year, while monthly home furnishing store sales are estimated at S$ 5.3 billion which is 8 per cent higher than in August 2023. On YTD basis, sales in 2024 are 4 per cent lower than in 2023. At the same time, for last several quarters, several major retailers like Target, Walmart, VF Corp among others have reported lower inventory levels compared to same period in the previous year. In the UK apparel store sales remained unchanged in August 2024 at £ 3.6 billion. On YTD basis, the sales in2024 is 3 per cent lower than in 2023.
The study also revealed, in August 2024, the US recorded its lowest inflation rate since February 2021 at 2.5 per cent; unemployment rate decreased by 0.1 per cent, after peaking in July at 4.3 per cent since December 2021. Also, the Consumer Confidence Index rose by 3 per cent and with the recent announcement by the US Federal Reserve to cut interest rates, a positive macroeconomic trend may be expected in coming months.
India scenario
Wazir textile and apparel index also registered improvement. With a steady rise in demand and improved market sentiment, the financial performance of Indian textile and apparel companies saw notable growth in the last quarter. According to our quarterly report, compared to Q1 FY24, Q1 FY25 showed an 11 per cent increase in WTI sales and a 29 per cent rise in WTI EBITDA. Meanwhile, WAI sales grew by 19 per cent, and WAI EBITDA saw a 13per cent increase.
An analysis of select top textile companies revealed at consolidated level, sales have increased by 12 per cent in Q1 FY25 compared to Q1 FY24. Consolidated EBITDA margin increased by 2 percentage points for the selected top companies in Q1 FY25 compared to Q1 FY24.
Consolidated analysis for the selected top apparel players At consolidated level, sales have increased by 19 per cent in Q1 FY25 compared to Q1 FY24. However, consolidated EBITDA margin remained same for the selected top companies in Q1 FY25 compared to Q1 FY24. Consolidated sales index increased by 6 per cent in Q1 FY25 compared to Q1 FY24. Consolidated EBITDAper cent has increased by 1 percentage points in Q1 FY25 compared to Q1 FY24.
Overall analysis
The latest import data and macroeconomic indicators provide encouraging signs of a demand revival in key markets for apparel. The consistent growth in apparel imports from various regions, coupled with positive developments in retail sales and macroeconomic factors, suggest that consumer confidence and spending are gradually improving.
The US, a major market for apparel imports, has shown steady growth in recent months. The increase in imports from the European Union, the UK, and Japan also indicates a growing demand for apparel products in these regions. The positive macroeconomic trends in the US, including declining inflation, decreasing unemployment, and rising consumer confidence, create a favorable environment for apparel consumption. The Federal Reserve's decision to cut interest rates further supports this positive outlook.
In India, the strong growth in apparel exports is a testament to the country's competitiveness and increasing global market share. The projected increase in total exports to $15 billion in 2024 highlights the potential for further growth and development of the Indian apparel industry.
The improvement in the Wazir textile and apparel index and the strong financial performance of Indian companies underscore the positive sentiment and growth prospects within the domestic market. The increase in sales and EBITDA across various segments indicates a healthy and expanding industry. Overall, the data presented in this report suggests that the apparel industry is recovering from the challenges faced in recent years. The early signs of demand revival in key markets, coupled with positive macroeconomic indicators and improving market sentiment, provide a promising outlook for the future growth of the industry.
Appointed as the senior management member of Welspun Living since Oct 04, 2024, Saumil Mehta will lead the home textiles business of the company’s subsidiary Welspun Global Brands. In this capacity, he will report to Dipali Goenka, Managing Director and CEO.
With an extensive experience spanning over 20 years across the FMCG and FMCD sectors, Mehta has led several business transformations, sales, consumer marketing, brand development and strategic business portfolios. Armed with a BE degree in Civil Engineering from the Birla Vishwakarma Mahavidyalaya and a Master’s degree in International Business from the Symbiosis Institute, Mehta has previously worked for leading organiations including Jubilant Foodworks, PepsiCo India Holdings, and Kraft Heinz India.
Driven by a rising demand for sustainable, eco-friendly textiles, the global hemp yarn market is witnessing a significant growth. Valued at $14.36 billion in 2023, the market is expected to grow by a11.71 per cent CAGR from 2025-32, to reach a value of $38.9 billion by 2032.
Along with its biodegradability, Hemp’s requirement of minimal water and pesticides make it an ideal alternative to conventional materials like cotton. Additionally, the material is naturally resistant tomold and ultraviolet light. Its hypoallergenic properties make it an ideal material for those with sensitive skin.
Being increasingly adopted for apparel, home textiles, and accessories, hemp is becoming a fashionable and eco-conscious choice for designers. However, the material still faces stigma due to its association with cannabis, which can hinder growth, particularly in regions with regulatory challenges. The market also suffers from a limited and fragmented supply chain often leading to price volatility and difficulty in meeting rising demand.
Further complicating the issue, regulatory barriers including hemp cultivation and processing laws in some countries threaten to impede market growth. However, advancements in cultivation techniques, fiber extraction, and spinning technologies are helping make the material more competitive by improving its quality and consistency. Combining hemp with cotton, wool, or polyester, blended yarns are rising in popularity, offering enhanced properties like softness and strength.
E-commerce is playing a pivotal role in expanding the market by providing consumers worldwide easy access to hemp-based products. North America leads the market in the US with the 2018 Farm Bill legalising hemp cultivation. Another key region is Europe, where sustainability initiatives in countries like Germany and France are driving growth in hemp textiles. Meanwhile, Asia-Pacific, with its traditional textile industries in countries like China and India, is emerging as a strong growth market.
In 2024, Burberry’s brand value fell $2 billion reveals Kantar’ annual ranking of UK’s top 75 brands. The report titled, ‘Brandz,’ reveals, the dip in Burberry’s value makes it the second-largest loser after St James’s Place. With the luxury industry hit hard by a downturn in spending as the ‘revenge shopping’ post-COVID-19 fades, even the wealthiest consumers have been feeling the effects of the cost-of-living crisis. Luxury players like LVMH are also facing challenges with Bernard Arnault, CEO, LVMH dropping from the top spot as the world’s richest person.
For Burberry, the luxury downturn coincided with internal issues as its drawn-out turnaround plan faltered, leading to the brand’s value reducing to a half in 2024. The brand sacked Jonathan Akeroyd as its CEO in July after the company issued its third profit warning of the year and suspended its dividend, causing shares to plummet. The brand also terminated hundreds of employees with a fall in its valuation leading ton investment analysts speculating about a potential takeover. In August, Burberry was removed from the FTSE 100, the benchmark for the UK's biggest stocks.
Several factors are responsible for Burberry’s current struggles, opine analysts. These include the brand’s over dependence on slower-growing apparel segments and weak performance in iconic outerwear and leather goods. The brand also made multiple changes in creative direction over the past decade. Combined with recent price hikes, these failed to resonate with aspirational consumers amid a broader slowdown in luxury spending.
However, Jelena Sokolova, Analyst, Morningstar, believes, the brand still has an opportunity to recover by renewing focus on outerwear collections and designing more affordable ranges, Other retailers such as Marks & Spencer, meanwhile, are witnessing 38 per cent boost in brand value, a result of positive shifts in consumer perception of both its grocery and fashion offerings.
The Lenzing Group, a global leader in sustainable cellulose fiber production, has acquired a minority stake in TreeToTextile AB, joining existing stakeholders H&M Group, Inter Ikea Group, Stora Enso, and LSCS Invest. This partnership is centered on advancing the production of sustainable fibers to drive positive change in the textile industry.
Lenzing has been a leader in sustainable fiber production for more than 85 years, with its fibers marketed under the Tencel, LenzingEcovero, and Veocel brands. CEO Rohit Aggarwal emphasized that TreeToTextile’s technology complements Lenzing’s efforts to lower the environmental impact of fiber production, reinforcing the company’s commitment to innovation and sustainability.
TreeToTextile, established in 2014, focuses on developing eco-friendly processes for cellulosic fiber production. CEO Roxana Barbieru emphasized that Lenzing’s involvement will accelerate their market reach and enhance their sustainability efforts.
The deal, subject to regulatory approval, is expected to close by the first half of 2025.
In its interim report for FY2024-25, British supermarket chain Tesco reported a 0.3 per cent rise in sales from its ‘Home and Clothing’ division.
The retailer’s sales from the ‘Home’ and Clothing’ division rose by 1.6 per cent. Tesco attributes this growth to the continued strong performance of its clothing range, which it stated is ‘outpacing the broader store-based clothing market.’
The report also noted a (1.3) percentage point impact due to the company’s new partnership with The Entertainer, which affects Tesco’s toy offerings. This partnership has also affected the company’s sales in the ‘Home’ and clothing division. However, sales in this division are expected to recover by the second half of the year.
In total, Tesco’s group sales grew by 3.5 percent at actual rates and 4 percent at constant rates during the last quarter, reaching US $41.28 million.
