The Indian clothing market is expected to be worth $53.7 billion in 2020, making it the sixth largest globally, according to the fourth annual state of fashion report by The Business of Fashion and McKinsey & Company.
While the global outlook for consumer spending is dim on account of rising trade tensions, political uncertainty and economic concerns, India presents an exciting opportunity particularly for price competitive players, analysts said in the report.
“While GDP growth this year has been somewhat weaker than expected, in part due to regulatory uncertainty, India is still projected to be the fastest-growing major economy, according to the IMF (International Monetary Fund),” analysts said.
India, which has attracted global brands like Zara, H&M and Marks & Spencer lately, saw the entry of Japanese retailer Uniqlo. Recently, the government relaxed local sourcing norms in single-brand retail, providing further impetus to the industry.
The McKinsey Global Fashion Index (MGFI) forecasts that the overall fashion industry revenue growth will slow further in 2020 — down to 3-4% from the 3.5-4.5% growth predicted for 2019. The most optimistic region is Asia, although, even here only 14% of executives expect an improvement in conditions, the report showed.
Respondents to the annual BoF-McKinsey executive survey reveals pessimism across all geographies and price points. The majority — 55% of fashion executives foresee a slowdown in 2020. A mere 9% of respondents think conditions for the industry will improve next year, compared to 49%, who said the same last year.