If there’s one thing that the fashion industry knows very well, it’s change. Trends come and go, styles are replaced every season, and technological advancements are now being integrated. But, now more than ever, the fashion industry is facing what’s probably the biggest evolution that it has had because of the pandemic.
The answer to most of fashion’s current challenges seems to be digital: Internet-based fashion shows, ramped-up online shopping experiences, and digital wallets.
But, first, let’s look at what makes the fashion industry the behemoth industry that it is today:
eCommerce and the General Fashion Industry
1. By 2024, the revenue of the fashion industry is projected to reach $953 billion with a compound annual growth rate (CAGR) of 9.4%.
(Statista)
It’s expected to have a revenue of $665 billion by the end of 2020.
2. In terms of revenue, Apparel remains to be the top segment in the fashion industry.
(Statista)
It has a projected market volume of $445 billion by the end of the year and an expected number of 3.5 billion consumers by 2024.
3. Online sales are expected to account for 24% of the total market revenue by 2024.
(Statista)
While offline channels still generate more sales, a positive growth is building in digital channels.
4. China is predicted to generate the biggest market volume ($284 billion) by the end of 2020.
(Statista)
It’s followed by the United States ($127 billion) and the United Kingdom ($33 billion).
5. In 2019, Asia-Pacific dominated the market, in terms of value, with a share of 38.8.
The market share of the region is expected to increase to 44.2% by 2025.
Global Fashion Industry and COVID-19
6. The global fashion industry is expected to have a decline of 27%-30% by the end of the year, due to COVID-19.
However, a growth of 2%-4% is possible in 2021.
7. Global luxury fashion brands can lose as much as $12 billion in 2020.
These brands rely heavily on consumers from Asia, where the pandemic has hit the longest.
8. In the US, retail sales in fashion had a -50.5% change from February 2020 to March 2020.
This affects the overall decline in the country’s retail sales. The last time that this drastic one-month drop happened was in Fall 2008.
9. In the US, 75% fashion companies can face debt challenges.
(McKinsey)
It all depends on how much longer stores will remain closed or partially operational.
10. In Europe and the US, at least 65% say that they have cut back overall spending on apparel, since the pandemic began.
(McKinsey)
Additionally, 56% of the consumers said that they purchase apparel only because of special promotions.
Consumer Spending
11. A survey conducted in August 2020 said that 52% of US consumers spent less for online shopping of fashion items in that month.
(Adobe)
Similarly, the decline in revenue of fashion retailers contributes to the overall decline in eCommerce.
12. For millennials, Gen Xers, and Baby Boomers, not being able to try on a product is the biggest factor that stops them from purchasing.
For Gen Zers, the biggest inconvenience is the wait time after ordering. The second biggest inconvenience across all audience segments is the shipping fee.
13. In a survey conducted in April 2020, 70% are more likely to still purchase and stick with a brand that they know and are loyal to.
(McKinsey)
This is mostly composed of Gen Xers. However, millennials and Gen Zers are more likely to experiment with smaller brands.
14. Consumers who didn’t shop online before are more open now to making purchases through online channels.
(McKinsey)
The younger segments of the consumers are leading this development.
Imports and Exports
15. In 2019, China was the leading exporter of clothing, accounting for 30.8%.
(Statista)
It’s followed by Europe, Bangladesh, and Vietnam.
16. Upon comparing July 2019 and July 2020, the value of US apparel imports was down by 32%.
(OTEXA)
However, this decline is better than the previous months: 60% in May 2020 (vs May 2019) and 42.8% in June 2020 (vs June 2019).
17. Asia is the biggest source of apparel in the US.
(OTEXA)
Aside from China, the market is shared by Vietnam, ASEAN countries, Bangladesh, and Cambodia.
18. The value of apparel exports had a total of $492 billion in 2019, which was a decline of 0.4% from 2018.
(WTO)
The slowdown of the economy, weaker demand, and economic tensions among the biggest players contributed to this decline.
Clothing and Apparel
19. In 2020, the global revenue of Apparel has reached $1.78 trillion.
(Statista)
It’s expected to grow at least 5.3% annually through 2025.
20. Womenswear is the largest segment around the globe.
It has a market volume of $910 billion.
21. The market size of menswear is expected to have a compound annual growth rate (CAGR) of 6.3% through 2025, estimated at $741 billion.
This growth can be attributed to millennial men becoming more fashion-conscious and designers offering more options for the target audience.
22. Clothing retailers in the US reported a decline of 89.3%, upon comparing sales between April 2020 and April 2019.
This was an even further dip than March 2020, where a decline of 51.3% was reported (versus March 2019).
Footwear
23. The global revenue of footwear amounts to $432 billion in 2020.
(Statista)
The United States has generated a revenue of $86 billion.
24. By 2027, the footwear market is expected to reach $530.3 billion.
Its compound annual growth rate (CAGR) is estimated at 5.5%.
25. Athletic footwear is seeing a promising growth with an expected compound annual growth rate (CAGR) of 6.3% through 2027.
This can be attributed to increased health awareness, which has led to more people doing workouts and fitness-related activities.
26. Nike is the leader in the top footwear companies in the world.
The brand is followed by Adidas, New Balance, and ASICS.
Bags and Accessories
27. The global revenue of bags and accessories is expected to reach $119 billion by the end of 2020.
(Statista)
It has a compound annual growth rate (CAGR) of 9.6%, resulting in an expected market volume of $171 billion by 2024.
28. In the US, the revenue of this segment is estimated to reach $19 billion by the end of the year.
(Statista)
Its compound annual growth rate (CAGR) is at 8.5%, contributing to projected market volume of $26 billion by 2024.
29. Asia-Pacific is the fastest growing market in this segment.
China and India are two of the top contributors, due to the shift in consumer behavior, bigger spending power, and influence of celebrities. However, North America remains to be the largest market.
30. Personalization, technological developments, and inclusivity are the top trends that are contributing to sales of bags and accessories.
Brands in this segment are experimenting with limited editions, co-creations, and customer-driven designs to increase sales.
Jewelry and Luxury
31. The global market size of jewelry and luxury is expected to reach $480.5 billion by 2025.
With an expected compound annual growth rate (CAGR) of 8.1%, the growth is due to the increase in disposable income and shift in shopping behavior.
32. So far, China has generated the biggest revenue in 2020 with an ongoing total of $6 billion.
(Statista)
It’s followed by the United States, Italy, France, and Germany.
33. In the US, the revenue of jewelry and luxury in 2020 is currently estimated at $5 billion.
(Statista)
The market in this territory is expected to grow by 6.6% every year through 2025.
34. LVMH is currently the top company in the jewelry and luxury segment.
In late 2019, the company acquired Tiffany & Co; however, its Watches and Jewelry group showed a decline of 39% in the first half of 2020.
Fashion and Social Media
35. Globally, 43% of Internet users go to social media to research about a product that they want to purchase.
However, only 12% said that a “buy” button on a social media platform would make them check out.
36. In the US, social media influences the fashion purchases of Gen Zers the most.
This information was from a survey conducted in late 2019. The next biggest age groups are millennials and Gen Xers.
37. Instagram is currently the best-performing social media platform for fashion brands.
(Statista)
Video streaming of live online selling, in particular, is an emerging trend and promising sales-driver.
38. At least 800 million people from 70 different countries use Facebook Marketplace every month.
(CNet)
Other platforms that will soon have shopping options are Instagram and WhatsApp.
Employment in Fashion
39. The fashion industry employs at least 300 million people all over the world.
(MCPI)
These people provide different forms of services for the fashion industry that’s worth $1.3 trillion.
40. In the US, at least 86,000 people are employed under the Apparel Manufacturing subsector, as of August 2020.
(BLS)
This is a huge decline from 112,000 people employed in August 2019.
41. The average monthly wage of a garment worker is estimated at $200.
However, this amount continues to suffer a drastic decline because of COVID-19.
42. At least 85% of all garment workers around the world are women
Most of them are from China, India, and Cambodia.
Going Global
43. When it comes to cross-border shopping, most consumers purchase products from the US.
(Flow)
Other top countries where cross-border consumers shop from include China and the UK.
44. By 2024, the revenue of the UK’s fashion industry is expected to reach $39 billion.
(Statista)
Its current revenue for 2020 is estimated at $32 billion with a compound annual growth rate (CAGR) of 4.7%.
45. The fastest growing fashion city is Beijing.
(McKinsey)
The other top cities include Shanghai, São Paulo, Moscow, and London. These cities are also considered as emerging markets in the fashion industry.
46. Among the 10 fastest growing retail brands of 2020, the only fashion brand included is Canada’s lululemon.
(Kantar)
The apparel brand saw a 40% increase in brand value, compared to 2019.
Fashion and Technology
47. Artificial Intelligence (AI) is gradually being integrated by fashion brands for a better shopping experience.
It’s being used in generating new designs, always-on customer service, hyper-personalized marketing, smart shopping, and overall convenience.
48. The global market size of smart clothing is expected to reach at least $5 billion by 2024 or 2025.
(Statista)
Smart clothing includes fitness-tracking wearables, smart sport apparel, and outerwear with LED, among others.
49. Sustainability is one of the biggest factors that affect consumers’ purchase intentions, especially since the pandemic.
(McKinsey)
Fashion brands are looking into technology to reduce their waste and have an eco-friendlier production.
50. The global sales of mobile commerce (or m-commerce) are forecast to reach $3.56 trillion by the end of 2021.
This growing shift is attributed to the preference of mobile phones over other devices and more digital wallet options.
Conclusion
While the fashion industry is currently facing a downward trend, it’s doing multiple stretches and working double time to bounce back. After all, a “V-shaped” trend is forecast for the industry in the coming years. Moreover, consumers are slowly but surely adjusting to the “new normal” and have discovered other (and maybe more convenient) ways to shop.
With an industry as big and formidable as this, fashion has not met its end just yet. It will dress itself up again in just a matter of time!
