Apparel retail market to thrive amidst rising incomes and urbanization: Centrum Research

India's apparel retail industry has witnessed a remarkable growth over the past decade, growing at a compounded annual growth rate (CAGR) of 10.2 per cent. This increase is primarily due to rising disposable incomes, rapid urbanization, and a consequent shift from unorganized to branded retail, reveals a recent study by financial advisory firm Centrum Research.

Apparel sector growth to continue

The study says, the apparel market is poised to continue growth, driven by favorable demographics, increasing incomes, and a growing demand for affordable fashion, particularly among Gen-Z consumers. The organized retail sector has experienced significant expansion, with major players increasing their store footprint by 15.7 per cent CAGR over the past five years.

One of the notable trends in the industry is the rising popularity of private-label apparel, which offers price and product differentiation. While customers in smaller cities prioritize quality and value-for-money, affordable fashion has emerged as the dominant force in the market, accounting for 56 per cent of the total apparel sales.

Mass market to see substantial growth
The mass market segment has witnessed substantial growth, growing at 28.4 per cent in FY23 with a projected CAGR of 13.7 per cent for FY23-FY27. Similarly, the economy segment recorded a 28.7 per cent increase in FY23 and is expected to grow at a CAGR of 14 per cent over the next five years. In fact, value fashion is projected to bounce back as inflation eases, while premium segments will benefit from a growing brand-conscious consumer base.

The mid-premium and premium segments have also demonstrated impressive growth, with FY23 figures showing increases of 37.9 per cent and 45.1 per cent, respectively. The projected CAGRs for these segments are 21.7 per cent and 25 per cent for FY23-FY27. And the premium+ category grew by 33.0 per cent in FY23 and is expected to grow at a CAGR of 35.9 per cent by FY27.

The organized market has witnessed segmentation, with categories like western wear, ethnic wear, and athleisure experiencing rapid growth. As inflation eases, value fashion is expected to rebound, while premium segments will benefit from a growing brand-conscious consumer base. Private brands are poised to capitalize on evolving consumer lifestyles and fashion trends, driving further growth in the market. Looking ahead, the apparel market is expected to continue growing, with rising incomes, favourable demographics, and increased demand for affordable fashion, particularly among Gen-Z consumers.