The ebb and flow of the fashion industry varies each year. From fashion trends to growing and declining demographics, it’s part of our job to stay abreast of what’s happening not only on a domestic level but globally as well.
Each year, Business of Fashion puts out its State of Fashion report which highlights the retail landscape through research and analysis done by McKinsey & Company. Their team of experts set out to understand how the industry is performing by combining both analytical expertise with a survey of more than 270 global fashion executives and thought leaders.
One significant highlight mentioned in this year’s report is the presence of how the global fashion economy, specifically China and India, are continuing to see major growth. In fact, according to McKinsey FashionScope, this year will go down in history. For the first time ever, Greater China is expected to overtake the US as the largest fashion market in the world.
“As hundreds of millions of people have joined the middle class in the developing world, particularly in China, they are flexing their newfound spending power by expressing their own tastes through fashion. China is no longer simply the factory to the world. It is the world’s fastest-growing consumer market, accounting for more than 18 percent of all final goods consumed.”
–Susan Lund, Mac Muir and Colin Britton in BoF State of Fashion report
With the rise of “mobile obsessed” consumers and social media, it’s no wonder that words like “digital” and “fast” were the second and third most common words used to describe the state of the industry by 34% of fashion executives. The ability to focus on speed-to-market and quick change is becoming extremely valuable to both consumers and retailers alike.
In addition to the growth of China in the past few years, the report also shows India as a rapidly growing economy for the fashion industry. With the rise of the middle-class and their booming manufacturing capabilities, this tech-savvy country is far too important for brands to disregard.
However, brands looking to sell into the Indian market should be aware of various challenges based on different climates, consumer purchase behavior, and trends. The importance of merchandising and global assortment planning becomes imperative to succeed in other countries, especially India.
Being able to dropship inventory, as well as manage different overseas warehouses, is something all brands need to be well prepared for in order to keep up with the speed-to-market pace as mentioned above.
Having an inventory system becomes a key component to being successful as a global fashion brand. With the ability to offer various currencies across multiple warehouse inventories, brands need to strategize their operational logistics before entering a new global market.
Many brands are excited to take advantage of India’s rapid growth. Most will likely sell on an existing e-commerce platform or directly to a store at the wholesale level. Opening their own brick & mortar proves to be significantly more difficult due to capital and operational knowledge.
Still, despite many challenges ahead to enter this market, the Indian market could be the next China. Experts expect strong economic growth and see the country as a huge opportunity for global growth in the fashion industry.