The global apparel and footwear industry posted incremental retail growth of $85 billion in 2013, but faces a challenge due to its over-reliance on BRIC countries for growth, says a recent study by Euromonitor International. The agency has also raised concerns over subdued consumer confidence in Western Europe, excessive discounting impeding profits and a slowdown in China. And the company cautioned that the industry’s heavy dependence on the BRIC markets posed a risk in the future.
As Magdalena Kondej, Head of Apparel and Footwear Research at Euromonitor International points out, BRIC countries account for over a quarter of the world’s apparel and footwear sales, they and are expected attract over 64 per cent of projected global sales over the next five years. This situation, Kondej feels carries risk because of the vulnerability of the economy in Brazil and Russia and the slowing economic growth in China.
The research agency has pointed out that there would be difficulty in breaking the cycle of discounting and its impact on margins, with unit prices for apparel falling 5 per cent since the economic downturn.
www.euromonitor.com
