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Citing insufficient progress in sustainability and human rights by brands like H&M, Zara and Asics, sustainability-focused asset manager, ASN Impact Investors has divested all its holdings in clothing companies. This move makes ASN the first Dutch investor to exit the fashion industry.
Driven by competition with fast-fashion giants like Shein and Temu, the fashion industry is caught in a cycle of relentless consumerism, says San Lie, Director, ASN. These companies are an obstacle to sustainability as they produce even faster than traditional brands, he explains.
The fashion industry is one of the world’s most polluting, with significant contributions to greenhouse gas emissions and environmental degradation. Polyester, a key material in fast fashion, exacerbates the microplastic pollution problem by releasing tiny plastic particles during washing.
Exemplified by brands like Shein and Temu, superfast fashion has also disrupted the market for second-hand clothing in the Netherlands with about 55 per cent of the roughly 1 billion clothing items discarded annually by Dutch residents ending up in incinerators, he adds. .
Given the industry's and consumers' apparent unwillingness or inability to change, government intervention is necessary, opines Lie.
The global cotton market has been experiencing a persistent demand decline for over two years, causing a ripple effect on pricing and the overall industry. . The demand slump is due to several factors like: economic uncertainties, shifting consumer preferences, and the lingering impact of the COVID-19 pandemic among others.
Reasons for demand slump
Several factors have contributed towards the downward trajectory of global cotton demand.
Economic slowdown: The global economy has been grappling with various challenges, including inflation, rising interest rates, and geopolitical tensions. These uncertainties have led to a decrease in consumer spending particularly in major consuming countries like China and a subsequent decline in demand for cotton-based products, this has significantly impacted the demand for cotton.
Shift in consumer preferences: The growing popularity of synthetic fibers, which are often cheaper and easier to maintain, has eroded the market share of cotton.
Trade tensions: Global trade disputes like the one between US and China and tariffs war have disrupted supply chains and added uncertainty to the market, impacting demand and pricing. Also, the ongoing war in Europe and Asia too has affected supply and demand.
Lingering impact of the pandemic: The pandemic disrupted supply chains and consumer behavior patterns. While some recovery has been observed, its lingering effects continue to influence the cotton market.
Table: Changing cotton demand and prices
|
Year |
Global cotton demand (million metric tons) |
Year-on-year change (%) |
Average cotton price ($/lb) |
|
2020 |
23.5 |
-10.2 |
0.68 |
|
2021 |
24 |
+2.1 |
0.92 |
|
2022 |
23 |
-4.2 |
1.19 |
|
2023 (Estimated) |
22.5 |
-2.2 |
0.8 |
Source: International Cotton Advisory Committee (ICAC), USDA
The table highlights the steady decline in cotton prices over the past two years. This downward trend is likely to persist unless there's a substantial recovery in demand. The table indicates, the average price witnessed a sharp increase in 2022 due to supply chain disruptions and increased production costs. However, the downward pressure on demand has led to a subsequent decline in prices in 2023.
Consequences for the cotton industry
Falling demand and lower prices have had far-reaching implications for the cotton industry. For farmers it means lower income and profitability, potentially leading to crop diversification or a decline in production. Textile mills are struggle to maintain margins due to lower demand for cotton-based products and fluctuating raw material prices. And retailers for price increase results in more competition and pressure to offer discounts to attract consumers.
While the current scenario poses challenges for the cotton industry, there are potential opportunities for recovery as well.
Innovation and sustainability: Focusing on developing new cotton products with enhanced functionality and sustainability credentials could reinvigorate demand.
Market diversification: Exploring emerging markets and expanding the range of cotton applications could help offset the impact of declining demand in traditional sectors.
Collaboration: Stronger collaboration between industry stakeholders, including farmers, textile manufacturers, and retailers, is crucial to address the challenges and capitalize on opportunities.
Even as the global cotton market is navigating a challenging period marked by a prolonged decline in demand, leading to depressed prices and disruptions throughout the supply chain; the industry can adapt and recover by focusing on innovation, sustainability, market diversification, and collaboration.
The Indian textile market witnessed moderate growth in Q1 FY24-25. Domestic demand remained relatively stable, supported by factors such as festive season sales and government initiatives to promote the textile industry. However, export demand was subdued due to global economic uncertainties and a slowdown in major markets.
Mixed performance
While some companies showed resilience others recorded a dip in revenue. The companies that showed good results were driven by factors such as strong domestic demand, capacity expansion, and a focus on high-margin products.
Table: Top performers
|
Company |
Revenue Growth (YoY) |
Net Profit Growth (YoY) |
Key Factors |
|
Vardhman Textiles |
12% |
18% |
Strong domestic demand, cost control measures |
|
KPR Mill |
15% |
22% |
Capacity expansion, improved product mix |
|
Welspun India |
10% |
14% |
Focus on home textiles, export growth |
Table: Under performers
|
Company |
Revenue Growth (YoY) |
Net Profit Growth (YoY) |
Key Factors |
|
Raymond |
-5% |
-12% |
Weak demand in apparel segment, high input costs |
|
Arvind |
-3% |
-8% |
Slowdown in export markets, inventory buildup |
|
Trident |
-2% |
-6% |
Pressure on yarn prices, rising cotton costs |
The under performers faced challenges due to factors like weak demand, high input costs, and a slowdown in export markets. For example, leading textile manufacturer Arvind reported a 37.25 per cent decline in consolidated net profit at Rs 43.73 crore for the first quarter ended June 30, 2024, on account of workers' strike and general elections. The company had posted a net profit of Rs 69.70 crore in the April-June quarter a year ago.
The textile market witnessed mixed performance in Q1 FY 2024-25. The domestic market remained robust, driven by factors such as festive demand, government initiatives, and rising disposable incomes. At the same time export market faced headwinds due to factors such as a slowdown in key markets like the US and Europe, and increased competition from countries like Bangladesh and Vietnam.
Going forward, the outlook for the next quarter and the full financial year 2024-25 remains cautiously optimistic. Domestic demand is expected to remain steady, while export demand may improve gradually as global economic conditions stabilize. The industry is likely to witness further consolidation and focus on innovation and sustainability.
The global apparel industry continues to face headwinds, with imports across key markets witnessing a significant decline. According to Wazir Advisors monthly report for August, ‘Apparel trade scenario in key global markets and India’, all major economies saw a reduction in apparel imports compared to the previous year.
Apparel Imports: A slump across key markets
June 2024 marked another month of decreased apparel imports for all key markets. The US saw a 6 per cent year-on-year (YoY) dip to $6.2 billion. The European Union (EU) experienced a more significant decline of 13 per cent, reaching $6.1 billion. The United Kingdom (UK) and Japan also witnessed contractions, with imports falling by 26 per cent to $1.4 billion and 6 per cent to $1.5 billion, respectively.
Meanwhile, apparel exports from China and Bangladesh have faced challenges. China, the world's largest apparel exporter, recorded a marginal 3 per cent YoY decrease in exports to $14.7 billion in July 2024. Bangladesh, another key player, saw a steeper decline of 17 per cent in exports to $3.4 billion in May 2024.
India's exports, a bright spot
However, even as major exporters faced a downturn, India bucked the trend with a remarkable 18 per cent YoY growth in apparel exports to $1.3 billion in July 2024. This increase underscores India's growing prominence as a competitive exporter in the global apparel market. A diversified product mix, and a focus on value-added products are the other reasons for India’s success.
Several factors are likely contributing to these trend.
Economic slowdown: The global economic slowdown, coupled with rising inflation, has dampened consumer spending on apparel, impacting demand in key markets.
Geopolitical tensions: Ongoing geopolitical tensions, such as the Russia-Ukraine war and trade disputes, have disrupted supply chains and trade flows, affecting apparel exports.
Shifting preferences: Changing consumer preferences towards sustainable and ethical fashion may be impacting sourcing decisions and trade patterns.
The overall decline in global apparel imports has significant implications for the industry. It is likely to put pressure on prices and margins for both exporters and importers. Moreover, it could lead to job losses and factory closures in countries that are heavily dependent on apparel exports.
As the global economy continues to navigate these uncertain times, it remains to be seen whether the apparel trade will be able to recover in the coming months. The ability of key markets to rebound from economic challenges and the effectiveness of measures taken by governments and businesses to support the industry will play a crucial role in determining the future trajectory of the apparel trade.
India's textile industry is poised for significant growth, with textile exports expected to reach $65 billion by FY26, as per Invest India. The domestic market, valued at $165 billion in 2022, is projected to grow at a 10 per cent CAGR, hitting $350 billion by 2030.
The sector is a critical employment driver, offering jobs to 45 million directly and supporting another 100 million in allied sectors. Cotton cultivation alone involves around 6 million farmers and up to 50 million people in processing and trade.
India is also the second-largest global producer of personal protective equipment (PPE), with over 600 certified manufacturers, capitalizing on a market that could reach $92.5 billion by 2025.
Government incentives, such as the Rs 10,683 crore Production Linked Incentive (PLI) Scheme, are crucial to this growth. The scheme supports the production of man-made fiber apparel, fabrics, and technical textiles, with 64 approved applications for Rs 19,798 crore in investments. These investments are expected to generate a turnover of Rs 1,93,926 crore and create 2,45,362 jobs, especially in Madhya Pradesh, Uttar Pradesh, and Rajasthan.
Foreign Direct Investment (FDI) in textiles remains strong, with $4.47 billion attracted from April 2000 to March 2024, under the 100 per cent automatic route.
India, a top global textile producer, contributes 2.3 per cent to GDP, 13 per cent to industrial production, and 12 per cent to exports, holding a 4 per cent share in global textile trade.
The upcoming Intertextile Shanghai Apparel Fabrics fair, celebrating its 30th anniversary, is set to host one of its most extensive fringe programs ever. Taking place from August 27-29, 2024, at the National Exhibition and Convention Center (Shanghai), the fair will feature nearly 40 seminars, product presentations, four panel discussions, and eight domestic forums. Covering topics such as trends, fashion, and innovation, the program will be spread across five dedicated venues, ensuring visitors are well-prepared for Autumn/Winter 2025-26 sourcing.
Messe Frankfurt’s General Manager, MsWilmet Shea, underscored the fair's strong focus on sustainability, particularly through the introduction of the TexpertiseEconogy concept in Shanghai. She emphasized that the seminars play a vital role in guiding buyers through the ever-changing textile industry. The Econogy Talks venue will feature 13 seminars and two key panels, addressing important topics such as the EU’s Green Deal and supply chain traceability.
Additional components under the Econogy banner include the Econogy Hub for sustainable products, Econogy Tours showcasing eco-focused exhibitors, and the Econogy Finder, an online tool for discovering sustainable suppliers.
The Technology & Solutions theme will address industry advancement in the IoT age, with seminars focusing on AI and digital tools. Highlights include the Textile Industry Digital Application Forum and presentations from industry leaders like Avery Dennison and Shima Seiki. These events align with the new Digital Solutions Zone in Hall 5.1, which will explore opportunities from the global digital revolution.
Design & Trends will feature the Intertextile Directions Trend Forum, showcasing key trends for Autumn/Winter 2025-26, including Utility, Calm, Pluralism, and Projection. Seminars by industry experts from Pantone, WGSN, and others will offer insights into upcoming colour and fabric trends.
In Market Information & Business Strategies, a notable panel discussion on textile investment in the ASEAN region will be supported byASEAN Federation of Textile Industries(AFTEX), bringing together executives from various Asian textile associations. Other key sessions will explore international market dynamics and intellectual property opportunities.
The fair will welcome nearly 4,000 exhibitors from 26 countries and regions, with nine national pavilions and eight group pavilions. Spanning 240,000 square meter across nine halls, the event will showcase a wide range of products, from functional fabrics to accessories, ensuring visitors have ample opportunities to connect with leading global suppliers.
A joint venture between Manomay Tex India and Vardhman Textiles has bagged aRs 3,000 crore contract to establish a large-scale textile production hub in Tripura from the state government
Aligned with the government’s vision of transforming Tripura into a key player in India’s textile sector, the project aims to attract investments, improve infrastructure, and create jobs in the northeastern region. The collaboration between Manomay Tex India and Vardhman Textiles is expected to introduce advanced technology and expertise to the state’s growing textile industry.
The project holds substantial significance for Tripura’s economy. It is expected to generate around 25,000 direct and indirect jobs, addressing the state’s limited industrial activity and employment opportunities. This boost in employment is particularly crucial for skilled and semi-skilled workers in the region.
In addition to creating jobs, the large-scale investment in the textile sector is anticipated to serve as a catalyst for broader industrial development in Tripura. The project will likely lead to improvements in infrastructure, transportation, and attract further investments, contributing to the state’s overall economic growth.
Furthermore, the government plans to leverage Tripura’s strategic location as a gateway to Southeast Asia by enhancing textile exports, especially to neighboring countries like Bangladesh.
The joint venture between Manomay Tex India and Vardhman Textiles combines the strengths of two well-established companies in India’s textile industry. Manomay Tex India is known for its high-quality fabric manufacturing, while Vardhman Textiles, one of the largest integrated textile manufacturers in the country, brings technical expertise and global distribution networks to the table.
The Tripura government’s strategy includes infrastructure development, investor incentives, and skill development programs to support the textile hub. Despite challenges such as underdeveloped infrastructure, the government’s commitment, coupled with the expertise of the partnering companies, is expected to overcome these obstacles, positioning Tripura as a significant hub in India’s textile industry.
Valued at $288 billion in 2023, the global plus size clothing market is projected to expand at a CAGR of5.7 per cent to surpass $501.35 billion by 2033. As per a report by Future Markets Insight (FMI), this growth will be driven by the rise of body positivity movement, changing fashion norms, and increased consumer awareness.
The body positivity movement has played a key role, encouraging inclusivity and celebrating diverse body shapes, which has fueled demand for attractive plus size clothing. As fashion norms evolve, designers and retailers are increasingly offering trendy, stylish options for plus size individuals.
With awareness amongst consumers rising, plus size shoppers are seeking clothes that reflect their personal style while ensuring comfort, says the report. However, the market also faced certain challenges including inconsistent sizing and limited retail availability, which hinder the market's growth, it adds. Many physical stores offer a narrow range of larger sizes, making it difficult for plus size shoppers to find what they need. Additionally, discrepancies in sizing across brands complicate the shopping experience, leading to frustration and dissatisfaction, particularly with online purchases, the report adds further. v Opportunities for expansion in the plus size clothing market are significant, particularly in online retail and customisation. eCommerce platforms allow brands to reach a broader audience and offer a wider variety of sizes and styles.
Customisation options further enhance customer satisfaction by allowing plus size individuals to create clothing that fits their unique body types and preferences.
According to the report, current trends shaping the market include inclusive fashion campaigns, sustainable practices, and fashionable plus size activewear. Brands promoting diverse body types in their marketing efforts are fostering a more inclusive fashion landscape. Sustainability is also gaining traction, with brands incorporating eco-friendly materials and ethical practices. The rise of stylish and functional plus size activewear meets the growing demand for inclusive fitness apparel that is both comfortable and supportive.
United States holds a 40 per cent share in the global plus size clothing market with significant contributions from the UK, China, Japan, and South Korea. The casual wear and mid-priced segments are expected to dominate the market.
Copenhagen Fashion Week (CPHFW) willshowcase a few selected Danish and Nordic brands at a dedicated showroom during Paris Fashion Week SS25. A part of CPHFW’s ongoing efforts to support their economic growth, this initiative offersthese brands a platform to gain insights into the fashion industry and highlight their commitment to responsible practices.
In all, eight brands, that previously featured in CPHFW’s official show and presentation schedule, will participate in the showroom. Four of these brands—Alectra Rothschild / Masculina, Berner Kühl, Rolf Ekroth, and Stamm—are also part of CPHFW’s NewTalent incubator program. The other participating brands include A Roege Hove, Mfpen, Nicklas Skovgaard, and OpéraSport.
Each brand selected for the Paris showroom has met CPHFW’s stringent Sustainability Requirements, demonstrating their dedication to creating a more positive impact on the fashion industry and managing their environmental footprint. CPHFW emphasises, the inclusion of both established and emerging talent in the showroom underscores the importance of the journey towards sustainability and celebrates success stories of businesses that are scaling up while maintaining a positive impact.
Cecilie Thorsmark, CEO, CPHFW, says, event would serve as a significant opportunity to present CPHFW’s Sustainability Requirements and showcase the brands that meet these standards to the international fashion industry, she notes.
The initiative aims to also foster impactful collaborations that can accelerate the transition towards a more sustainable and positive fashion industry.
Supported by a shared grant pool from Danish ministers and the Danish Art Foundation, this initiative further emphasises the collaborative effort required to promote Danish and Nordic brands on a global stage.
The All Pakistan Textile Mills Association (APTMA) has warned that the government’s ‘regressive taxation policies’ may lead to the permanent closure of textile factories in Pakistan, resulting significant job losses.
Expressing deep concern over the impact of SRO350(1)/2024 and the recent removal of the sales tax exemption on local supplies for export manufacturing, APTMA argued, these actions are crippling the industry with severe consequences for employment, external sector stability, and the overall economy.
Despite repeated appeals from industrial stakeholders and assurances from senior officials, APTMA criticised the Federal Board of Revenue (FBR) for continuing to enforce what it described as a ‘dysfunctional policy’ that harms manufacturers across Pakistan. The association noted,the operational challenges introduced by SRO350 have compounded the difficulties already faced by the textile industry.
APTMA explained,the requirement to link the entire supply chain to file sales tax returns has created significant obstacles. Many of its members, along with other firms nationwide, are struggling to meet the filing deadlines because their upstream suppliers have not filed their returns. Furthermore, the FBR has eliminated the option to delink invoices from the return, worsening the situation.
APTMA urged the government to immediately amend SRO350(1)/2024 in consultation with industrial stakeholders who are most affected by it. The textile sector cannot endure further delays in addressing this issue, which has already caused substantial damage, the association warned.
Additionally, APTMA called for the reinstatement of the sales tax exemption on local supplies for export manufacturing. The association argued that the withdrawal of zero-rating on these supplies under the Finance Act 2024 was not driven by revenue needs but was instead a reaction to FBR audits that identified misuse by a small number of firms out of approximately 1,900 beneficiaries.
APTMA urged the government to restore the zero-rating on local supplies under the Export Facilitation Scheme (EFS) and to implement stronger checks and balances to prevent misuse, rather than resorting to measures that further accelerate the deindustrialisation trend harming Pakistan’s economy.
