Apparel and Accessories Industry Report

Revenues in the worldwide apparel and accessories market are topping out in the trillion-dollar range, with projections for strong, sustained growth, especially in the women’s apparel and accessories segments. While an overwhelming majority of global sales are non-luxury items, in China, there is a surge in demand for luxury goods as shoppers are more willing to pay the high price tags for high-quality products.

Market Segmentation

By Product

• Formalwear
• Casualwear
• Sportswear
• Shoes
• Outdoor
• Jewelry
• Watches
• Handbags & Purses
• Belts & Wallets
• Neckties
• Scarves & Gloves
• Sunglasses
• Hats
• Others

By End User

• Men
• Women
• Children

By Distribution Channel

• Hypermarkets
• Supermarkets
• Specialty Stores
• Franchise Outlets
• Modern trade
• Online
• Others

Key Market Trends

The global market is seeing increased consumer spending on fashion and accessories, driving demand for products that enhance personal style. The importance of personal style is driven by the popularity of social media and influencer culture, which leads consumers to desire trendy items. Cultural trends and celebrity endorsements have a major impact on today’s consumer purchasing behaviours, largely thanks to Instagram and TikTok. Celebs and influencers set fashion trends that drive demand for the apparel and accessories they wear, introducing new styles and product categories that draw in audiences. People want to look like the influencers they follow and admire, creating a major channel that shapes the fashion market. This trend is largely driven by collaborations between brands and celebrities to create limited-edition products that promote exclusivity, further motivating shoppers to buy items to express their individuality.

Another key driver of the market is the rise of sustainable fashion. More brands are focusing on eco-friendly materials and sustainable production practices to appeal to environmentally conscious shoppers, especially younger generations.

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The relentless demand for online shopping opportunities will continue to impel growth in the apparel and accessories market. Manufacturers have more platforms than ever to sell their products, boosting their customer bases and driving geographic growth in the overall market.

Major players in the apparel sector are focusing on developing advanced technologies to gain a competitive edge. This includes the offering of innovations such as dynamic virtual fitting room technology that enables shoppers to “try on” clothing or accessories virtually. Customers can select a model whose height, body type, and skin tone best match theirs to see how a particular item would look on them.

Technology is also transforming other parts of the industry. The integration of new technologies, such as wearable tech, is transforming the industry in terms of innovation and convenience. Additionally, apparel manufacturers are investing in computer-controlled sewing and embroidery systems that boost efficiency and reduce operating costs. These machines can use pre-programmed digital embroidery patterns to automatically create designs on fabric. This technology is also capable of editing designs, creating digitised files, and monitoring the entire embroidery process.

More businesses in the sector are also directing attention to niche markets to attract specific consumers, such as plus-size, adaptive clothing, eco-friendly materials, and vintage. This targeting requires heavy marketing investments and strategies. One way these companies are creating brand loyalty is through collaborations between brands and designers to create exclusive lines. Additionally, there is a shift towards customisation and personalisation in apparel accessories, enabling customers to showcase their individuality. Athleisure and multifunctional products are becoming more popular as consumers want comfort and versatility. Also, vintage and retro styles have been resurging, driving nostalgic fashion trends.

M&A

The apparel and accessories sector continues to see significant M&A opportunities. Companies are seeking growth catalysts amid changes in sales channels, driving M&A activity.

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The market is characterised by a wide array of products that are both functional and aesthetic. So many products appeal to a broad consumer base with different preferences and needs. As the industry progresses, competition is driven by ever-changing fashion trends, rapidly shifting consumer preferences, and an onslaught of technological innovations. Companies are engaging in vigorous marketing strategies and advanced product launches more than ever, aiming to stand out in a highly saturated industry. Competitive strategies focus on product quality, branding, distribution channels, and sustainability, all of which are driving M&A and partnership strategies.

The apparel and accessories space remains resilient in terms of consumer spending and M&A activity. Women’s products lead the sector, and companies operating in this end market are getting strong M&A interest. There is also interest in alternative sales channels, such as live commerce, as well as other innovations.

Live selling has gained significant traction since social media has become a popular platform for online shopping, opening up tremendous growth opportunities. The real-time format allows companies to unload inventory quickly, using live markdowns to sell overstocked items before inventory bogs down performance. It has proven incredibly useful for boosting conversion rates and cross-selling products. Live commerce also provides valuable first-hand data that makes it easier to enhance relationships with consumers and predict trends. Businesses focused on live selling can be expected to attract significant M&A interest and high valuations due to their benefits for inventory management and access to key first-party data.

The majority of deal activity in the sector is driven by private buyers with a strong interest in consolidation, snapping up competitors and tapping into new products and services. These private buyers are also motivated to move into new markets, expand their footprints, and gain new customers through M&A to stay ahead of the competition.

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