Rising incomes, increasing demand to drive resurgence of value fashion market in India
17 September 2024, Mumbai
Driven by rising incomes, favorable demographics, and increasing demand for affordable fashion, particularly among Gen-Z consumers, the market for value fashion in India is expected to rebound.
According to a research report by financial advisory firm Centrum, over the past decade, India’s apparel retail market grew at a CAGR of 10.2 per cent, with growth fueled by rising disposable incomes and rapid urbanization. This led to a significant shift from unorganised to branded retail. Store expansions by major players grew at a CAGR of 15.7 per cent over the past five years.
Today, organised retail accounts for 40 per cent of the market, with both domestic and international brands establishing strong footholds. E-commerce has played a crucial role in this shift, especially in Tier-II and Tier-III cities.
One key trend identified in the report is the increasing focus on private-label apparel, offering both price and product differentiation. In smaller cities, however, consumers tend to prioritise quality and value-for-money over brand names. Affordable fashion has become a dominant force, with value fashion making p 56 per cent of the total apparel market.
In fiscal year 2023 (FY23), the mass market grew by 28.4 per cent. It is expected to grow at a CAGR of13.7 per cent from FY23-27. The economy segment also saw substantial growth, rising by 28.7 per cent in FY23, and projected to grow at a CAGR of 14.0 per cent over the next five years.
The mid-premium segment is anticipated to grow at a CAGR of 21.7 per cent from FY23-27. The premium segment is projected to expand at a CAGR of 25.0 per cent over the coming years. Meanwhile, the premium+ category is forecasted to grow at a CAGR of 35.9 per cent by FY27.
The report also highlights segmentation within the organised market, with western wear, ethnic wear, and athleisure showing rapid growth. Private brands are expected to capitalise on evolving fashion trends and consumer lifestyles, positioning themselves for higher growth in the near future.
