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Global apparel sales to rise by $156 bn, India’s outlook promising: Euromonitor

"As per Euromonitor International’s baseline scenario, global apparel sales are forecast to rise by $156 billion from 2016 to 2019 (measured in current prices), provided economic growth evolves. This essentially means that in three years, global sales are set to rise eight times the annual turnover of the world’s largest apparel corporation, H&M Hennes & Mauritz AB, which generated $19.8 billion in sales in 2016. However, global growth is unevenly distributed. Only six countries will account for two-thirds of the forecast global growth, namely China, the US, India, the UK, Russia and Mexico."

 

 

Global apparel sales to rise by 156 bn Indias outlook promising Euromonitor

 

As per Euromonitor International’s baseline scenario, global apparel sales are forecast to rise by $156 billion from 2016 to 2019 (measured in current prices), provided economic growth evolves. This essentially means that in three years, global sales are set to rise eight times the annual turnover of the world’s largest apparel corporation, H&M Hennes & Mauritz AB, which generated $19.8 billion in sales in 2016. However, global growth is unevenly distributed. Only six countries will account for two-thirds of the forecast global growth, namely China, the US, India, the UK, Russia and Mexico. Furthermore, focusing on cities – i.e. at even more detailed geographic level – may further narrow the list of locations with the best potential for new stores. While the global apparel sales growth forecast is impressive, two-thirds of the total growth will take place in only six countries around the world, including four emerging markets.

Emerging cities with growth potential

Global apparel sales to rise by 156 bn Indias outlook promising

 

Apparel retail sales in China are expected to rise by an impressive $60 billion over the forecast period. Focussing on key cities in China may help capture most of the growth at minimal costs. While China’s six megacities with over 10 million people account only for 7.2 per cent of country’s population, they will account for 19 per cent of total growth of consumer expenditure on clothing and footwear.

India’s growth outlook is also very promising. However, India is less urbanised in comparison to China and accessing significant share of the Indian apparel market would require coverage of a larger number of Indian cities. The six most rapidly growing cities in terms of consumer expenditure on clothing and footwear include Mumbai, Bengaluru, Chennai, Kolkata, Delhi and Hyderabad. However, all of them combined will account for only 10 per cent of total forecast growth of consumer expenditure in India. To capture one-fifth of the growth of apparel sales (which required being present in six major cities in China), investors would need to carry out activities in at least 40 major Indian cities.

Mexico and Russia are two other promising markets for apparel retailers. They rank among the fastest emerging markets for apparel, even if their total market size will grow by relatively modest terms in comparison to India or China – namely, $4-5 billion in each country over 2016-2019. Geographically, investment should be even more concentrated in Russia and Mexico in comparison to China or India. Both countries are dominated by their key megacities, Moscow and Mexico City, respectively, which will account for 31 per cent and 15 per cent of total consumer expenditure growth. Growth in Moscow, given the relatively stable forecast of the Ruble’s exchange rate, would be at par with major Chinese metropolitan areas in terms of expected consumer expenditure growth.

 
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