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Dynamics of fashion industry

The dynamics of the apparel industry are changing dramatically. To succeed amid the shifting tides, companies need to build up competence in consumer target groups, sustainability, marketing channel digitalization & analyzing customer data to understand customer’s needs.

Global fashion industry is worth $1.2 trillion, of which $250 billion originates annually from the United States. The industry employs nearly two million people every year. It is also an industry, which suffers a tremendous trade gap for US consumers. The US exports about $6 billion in apparel each year, but imports more than $82 billion.”

Fashion fact & figures

About 75 per cent of garment workers worldwide are women. Up to 75 million people are employed by the fashion industry globally right now. In 2000, only 20 million people were believed to be employed by the industry. In the US, cotton pickers make an average of $40,000 per year. In India, the average employee makes $730 per year. In Uzbekistan, workers may not earn anything at all. In 2004, it was estimated that the informal economy within the fashion industry generated 35 per cent of global GDP, the figure is likely to be higher now.

The fact is that, though a majority of manufacturing occurs outside the US and Europe a majority of sales occurs inside the US and Europe. Economies everywhere are able to benefit from what this industry contributes. Whether there are ethnic, cultural, or national fashion trends that are emphasized, there is always a niche available for designers, manufacturers, and retailers. Although the US often dominates the fashion industry in terms of imports and influence, there really is something for every demography, if you are willing to look hard enough.

01-5Understanding global fashion industry

Fashion is more than just what you decide to add to your wardrobe. It is an industry, which provides manufacturing jobs, accounting jobs, and even entry-level retail jobs so that everyone has a chance to get involved. In the US, the average household spends about $1,700 per year on fashion items, including apparel, footwear, and related accessories.

Children’s fashion is expected to exceed $200 billion in total sales annually, which marks a 15 percent increase in the past five years. Bridal wear is a fashion market, which generates more than $55 billion annually. Menswear generates more than $400 billion each year around the world; women’s wear contributes more than $620 billion in sales to the fashion industry annually.

Fashion becomes a priority for consumers, when other basic needs can be met, and there is money left over. No one is going to spend $300 on leather shoes when they need to put food on their table, pay their rent or mortgage, and have a way to get to work.

Sustainability

Second to oil, fashion and textiles is the most polluting industry in the world. Every stage in a garment’s life, threatens our planet and its resources. It can take more than 20,000 litres of water to produce 1kg of cotton, equivalent to a single t-shirt and pair of jeans. Up to 8,000 different chemicals are used to turn raw materials into clothes, including a range of dyeing and finishing processes. And what becomes of the clothing that doesn’t sell, falls apart or goes out of style? More often than not, it is discarded in giant landfills. How can the fashion industry become more sustainable?

Market size is growing holding obstacles on shoulder

All of these challenges come with great opportunities. The size of the global apparel business is growing and is expected to generate double digit growth between now and 2020. Much of this growth is coming from developing markets, notably from the exploding buying power among Asian consumers, who are migrating into the middle class and starting to view clothes as an extension and expression of their new lifestyle. These consumers are also increasingly travelling – and shopping – abroad. By 2020, foreign spending of Asian-Pacific residents outside of their home countries will triple, totaling $600 billion. In the luxury goods segment, 75 percent of all sales will be from Chinese consumers, with more than half of that being spent outside of China.

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