How Real Is Looming Global Geopolitical Threat On Fashion Retail

22 August 2022, Mumbai:

The fashion retail industry is currently confronted with multiple macro-economic headwinds amid significant economic and geopolitical uncertainties.

On the international fashion business board, nations make their bets on emerging winners and established losers. Reports anecdotally indicate India will be where fashion sales increase the most from 2018 to 2022, while Venezuela will be the market where they decline the most, at least relative to other countries. 

According to Euromonitor, the vast Indian market would have the highest relative growth in fashion sales, at 40% throughout this time. A 21.8 billion dollar increase will be made to the sector's national revenue, which will rise from 54.8 billion to 76.6 billion.

Oversight of Geopolitical Risks

We are living in a VUCA world & are in a period of elevated geopolitical uncertainty. The impending Geopolitical Risks & their unintended business disruption have a vicious impact on businesses and the odds it is stacked up to. Given Russia-Ukraine war has no sight of the end. Political uncertainty will only remain given recent China economic & military coercion and intimidation of Taiwan visibly will only vitiate the world’s peace & tranquility and could potentially generate shocks that will have a negative impact on global trade & commerce.

Fashion Retail’s Bird’s View

Globally Fashion and accessories brands are at last waking up to the buying power of the aspirational Indian consumer. India will beat the other nations in relative development, but it won't be the key factor driving a rise in global fashion sales. 

China's sales will climb by 10.2% from 2018 to 2022. However, this increase will result in an increase in revenue of 30.2 billion dollars. China will be the world's largest market for fashion in 2022. 

Up to 2022, Ukraine's fashion industry will develop at the world's second-fastest rate. Between 2018 and 2022, the country's fashion industry will grow by 35%, reaching 4.8 billion dollars. The increase will be 1.2 billion dollars in total.

Argentina will boost its fashion sales the highest among third-world markets between 2018 and 2022, despite the country's unpredictability. The industry will conclude 2022 with 13 billion dollars in sales, a 27.9% rise. 

Despite being in the center, the United States will be the third biggest market where the fashion industry will gain sales in absolute terms through 2022, with a growth of 4.8%. The United States will end 2022 with 283.6 billion dollars in sales, an increase of 12.9 billion dollars in revenue.

Larger brands, according to Ford, were particularly exposed. He told Tania Bryer, presenter of "The CNBC Conversation with Tom Ford," "I believe you're going to really feel that hit considering you're quite a mature brand."

Given that she assisted in turning around the fortunes of Gucci's fashion business & the designer in question is no stranger to significant corporations. What is noticeable is that during his 10 years as its creative director, the brand's sales soared from $320 million in 1994 to approximately $3 billion in 2003.

Eventually, Ford departed the label in 2004 and founded a film production firm and his namesake fashion line due to what he described as "creative control conflicts."

What are the current geopolitical issues?

Principal threats include

Russian Aggression for Ukraine and Beyond

Inflation + Central Bank monetary policies

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