India’s Apparel Retail Industry Grows Rapidly
India’s apparel retail industry has seen significant growth over the past decade, with a compounded annual growth rate (CAGR) of 10.2%. This growth is driven by rising disposable incomes and rapid urbanisation, leading to a shift from unorganised to branded retail.
Key Drivers of Growth
According to a research report by Centrum, the apparel market is expected to continue growing due to:
- Rising incomes
- Favourable demographics
- Increased demand for affordable fashion, especially among Gen-Z consumers
Store Expansion and E-commerce
Over the past five years, store expansion by major players has grown at a CAGR of 15.7%. Organised retail now accounts for 40% of the market, with both domestic and international brands gaining a strong foothold. The rise of e-commerce, particularly in tier-2 and tier-3 cities, has also played a crucial role in this shift.
Trends in the Market
Private-label apparel is becoming more popular due to price and product differentiation. However, customers in smaller cities prioritize quality and value-for-money over brand names. Affordable fashion is the dominant force, making up 56% of the total apparel market.
Market Segments
| Segment | Growth in FY23 | Projected CAGR (FY23-FY27) |
|---|---|---|
| Mass Market | 28.4% | 13.7% |
| Economy Segment | 28.7% | 14.0% |
| Mid-Premium Segment | 37.9% | 21.7% |
| Premium Segment | 45.1% | 25.0% |
| Premium+ Category | 33.0% | 35.9% |
Future Outlook
The apparel market is expected to continue its growth trajectory, driven by rising incomes, favourable demographics, and increased demand for affordable fashion. Value fashion is projected to bounce back as inflation eases, while premium segments will benefit from a growing brand-conscious consumer base. Private brands are likely to see higher growth, capitalising on the latest fashion trends and evolving consumer lifestyles.
Doubts Revealed
Apparel Retail Industry -: This is the business of selling clothes to people. It includes shops and online stores where you can buy clothes.
CAGR -: CAGR stands for Compound Annual Growth Rate. It shows how much something has grown each year over a period of time.
Urbanisation -: Urbanisation means more people are moving to cities from villages. Cities grow bigger and have more buildings and people.
Organised Retail -: Organised retail refers to large, well-structured stores or chains, like shopping malls or big brand stores, where you can buy clothes.
E-commerce -: E-commerce means buying and selling things online, like on websites or apps. You can shop for clothes on the internet.
Affordable Fashion -: Affordable fashion means stylish clothes that are not very expensive. Many people can buy these clothes without spending too much money.
Value Fashion -: Value fashion is a type of affordable fashion. It offers good quality clothes at low prices.
Premium Segment -: The premium segment includes high-end, expensive clothes. These are often from famous brands and are of very high quality.
FY23 -: FY23 stands for the financial year 2023. It is a period used for accounting and financial purposes, usually from April 2022 to March 2023 in India.
Gen-Z -: Gen-Z refers to the generation of people born between the mid-1990s and early 2010s. They are young and often like trendy and new fashion.
Demographics -: Demographics are statistics about people, like their age, gender, and where they live. It helps businesses understand their customers better.
