Global fashion’s spending power moves east, putting India in the top tier

The centre of gravity in global apparel consumption is shifting steadily away from mature Western and East Asian markets towards faster-growing emerging economies. The US remains the world’s largest clothing market, with nominal apparel spending rising at a 3.7 per cent CAGR between 2010 and 2025. But the more significant change is taking place immediately behind it, where China and India have emerged as the strongest growth engines.

Consumption expenditure data from World Data Lab and fashion think tank FashionSIGHTS shows a sharp reshuffling of the world’s leading apparel markets over the 15-year period. While mature economies have faced demographic ageing, market saturation and currency pressures, emerging consumer markets have expanded their share of global discretionary spending.

Table: Global consumption expenditure rankings 2010 vs 2025

India and China change the ranking

India delivered one of the most significant advances, moving from eighth place in 2010 to third in 2025, supported by a 5.2 per cent nominal dollar CAGR. China moved from third to second with an 8.9 per cent CAGR, placing it firmly behind the US. The contrast with mature markets is pronounced. Japan dropped from second to sixth, with apparel spending declining at a 2 per cent CAGR. Italy moved from fifth to seventh, while France slipped from ninth to 11th. Spain also fell out of the top 15.

The change reflects more than differences in retail maturity. Ageing populations, saturated replacement demand and exchange-rate movements have constrained the dollar value of consumption in several developed markets, while rising incomes and expanding consumer populations have supported apparel demand across emerging economies.

Consumers power growth

Behind the rankings lies a broader demographic transformation. World Data Lab defines the global consumer class as people spending more than $12 a day in 2017 purchasing-power-parity terms. This population is growing rapidly in emerging economies even as mature markets contend with ageing populations and high household expenditure on housing and services.

China accounted for over half of Asia-Pacific's consumer-class growth between 2000 and 2025, adding nearly one billion consumers. Over the next decade, India is projected to account for more than half of all net new entrants to the global consumer class. "For four decades, brand valuation and capital investment chased mature metropolitan wealth. Today, the strategic mandate is identifying where incremental discretionary cash flow is being unlocked," says Achim Berg, Founder, FashionSIGHTS and former senior partner leading global apparel and luxury practice advisory.

The implications extend beyond market rankings. The threshold for entering the world's top 15 apparel markets has also gone up. Indonesia was at the 15th position in 2010 with annual clothing expenditure of about $22 billion. By 2025, the comparable threshold had risen to around $30 billion, with Argentina entering the ranking at that level. Türkiye climbed four places to 10th with a 4.1 per cent CAGR.

Retail growth moving beyond megacities

The redistribution of spending is also forcing a rethink of retail expansion. Earlier international strategies often concentrated investment in gateway cities such as Shanghai, Beijing, Mumbai and Istanbul. The next phase of growth is more dispersed.

More than 90 per cent of newly formed consumer-class households in South and Southeast Asia are located outside top metros, reveals the demographic data. This is pushing retailers towards smaller-city networks, regional fulfilment infrastructure and more localized merchandise strategies.

India's Trent offers a good example. Its Zudio and Westside formats have combined private-label merchandise, rapid design-to-shelf cycles and an aggressive store rollout across smaller cities. The model has allowed the retailer to target emerging middle-income consumers with lower-priced fashion while reducing dependence on imported branded merchandise.

The broader lesson is that consumer growth cannot be captured through metro flagships alone. Distribution density, price and inventory responsiveness determine access to the next wave of demand.

Localization comes with new risks

The opportunity, however, comes with greater operating complexity. Emerging apparel markets have fragmented distribution systems, diverse body and fit requirements and highly localized buying calendars shaped by festivals such as Diwali, Ramzan and Lunar New Year.

Centralized design and inventory models can therefore create higher markdown exposure when products fail to match local demand. Retailers seeking sustainable growth will need localized design capabilities, regional supplier networks and inventory buffers closer to consumption centres.

Currency is another pressure point. Strong domestic-currency sales growth can translate into weaker dollar or euro revenues when emerging-market currencies depreciate, making currency management and local cost structures increasingly important.

Shifting focus from production to demand

The shift is ultimately broader than a change in retail rankings. Emerging economies are moving from being viewed primarily as low-cost manufacturing bases to becoming critical sources of global apparel demand. That transition is likely to reshape where fashion companies deploy stores, supply chains, technology and working capital. Retailers that previously optimized networks around mature metropolitan markets will increasingly have to build for dispersed consumer growth.

World Data Lab's economic and demographic modelling, combined with FashionSIGHTS' apparel-sector analysis, offers a framework for tracking this shift across more than 200 markets. For global fashion companies, the critical question is no longer simply where apparel is manufactured, but where the next generation of apparel spending is being created.