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McKinsey sees India's ascent in fashion industry in 2019
13 Feb '19
2 min read
India’s ascent is one of ten trends the fashion industry should watch in 2019, according to McKinsey’s latest State of Fashion report, prepared in partnership with the Business of Fashion (BoF). India is increasingly becoming a focal point for the fashion industry, reflecting a rapidly growing middle class and an increasingly powerful manufacturing sector, it says.
These forces, together with strong economic fundamentals and growing tech savvy, make India too important for international brands to ignore, a press release from the company said citing the report.
India’s apparel market will be worth $59.3 billion in 2022, making it the sixth largest in the world, comparable to the United Kingdom’s ($65 billion) and Germany’s ($63.1 billion), according to data from McKinsey’s FashionScope.
The aggregate income of the addressable population (individuals with more than $9,500 in annual income) is expected to triple between now and 2025.
Economic expansion is happening across Asia, but McKinsey expects 2019 to be the year when India takes centre stage. The country is being propelled by strong macroeconomic tailwinds, and its gross domestic product (GDP) is predicted to grow 8 per cent a year between 2018 and 2022, the report said.
India’s middle class is forecast to expand by 1.4 percent a year over the same period, outpacing China, Mexico, and Brazil. As a result, India is set to evolve from an increasingly important sourcing hub into one of the most attractive consumer markets outside the Western world, says the report.
More than 300 international fashion brands are expected to open stores in India in the next two years. But India remains a complex market that presents challenges as well as opportunities.
The apparel business is still largely unorganized, with formal retail accounting for just 35 per cent of sales in 2016. Its share is likely to reach around 45 per cent by 2025—still a relatively low proportion, says the report.
The growth in the apparel sector is also being driven by increasing tech savviness among consumers. E-commerce leaders are moving to solutions based on artificial intelligence. The supply side of the industry is equally robust, and the growth of textile and apparel exports is expected to accelerate, the report adds. (DS)
These forces, together with strong economic fundamentals and growing tech savvy, make India too important for international brands to ignore, a press release from the company said citing the report.
India’s apparel market will be worth $59.3 billion in 2022, making it the sixth largest in the world, comparable to the United Kingdom’s ($65 billion) and Germany’s ($63.1 billion), according to data from McKinsey’s FashionScope.
The aggregate income of the addressable population (individuals with more than $9,500 in annual income) is expected to triple between now and 2025.
Economic expansion is happening across Asia, but McKinsey expects 2019 to be the year when India takes centre stage. The country is being propelled by strong macroeconomic tailwinds, and its gross domestic product (GDP) is predicted to grow 8 per cent a year between 2018 and 2022, the report said.
India’s middle class is forecast to expand by 1.4 percent a year over the same period, outpacing China, Mexico, and Brazil. As a result, India is set to evolve from an increasingly important sourcing hub into one of the most attractive consumer markets outside the Western world, says the report.
More than 300 international fashion brands are expected to open stores in India in the next two years. But India remains a complex market that presents challenges as well as opportunities.
The apparel business is still largely unorganized, with formal retail accounting for just 35 per cent of sales in 2016. Its share is likely to reach around 45 per cent by 2025—still a relatively low proportion, says the report.
The growth in the apparel sector is also being driven by increasing tech savviness among consumers. E-commerce leaders are moving to solutions based on artificial intelligence. The supply side of the industry is equally robust, and the growth of textile and apparel exports is expected to accelerate, the report adds. (DS)
Fibre2Fashion News Desk – India
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