Global fashion market to grow 3.9% per year by 2025
Kantar, the market and prospective analysis specialist, has just released its 2025 predictions and trends for the retail industry. The report has taken more than 1,500 of the largest worldwide distributors into account, across all sectors. In terms of clothing, the global market should increase by 3.9% each year until 2025, totaling 64 billion dollars in five years.
According to Kantar, approximately half of this increase will be generated by five major players: Japan's Fast Retailing, owner of Uniqlo; Spanish company Inditex; H&M, from Sweden; and American brands TJX and Old Navy. Globally, the worldwide fashion retail market is valued at 300 billion dollars in 2020. This amount could reach 360 billion dollars in 2025.
An overall analysis of global retail, including hypermakerts, brands and discounters, reveals that the market could reach 6,700 billion dollars in sales in 2020, an increase of 4.8% in one year, bolstered by e-commerce which will jump 15.7% this year, reaching 861 billion dollars. The online market will certainly lead future growth. Online sales, which represent 12% global retail sales today should increase four times faster than physical transaction within five years. In 2021, the 1 trillion dollar generated revenue line will be crossed. This number will reach 1,600 billion in 2025, according to Kantar’s projections.
Regionally, retail activity should grow faster in the Asia-Pacific region (up 8.6 %), than in North America (up 3.9 %) and Europe (up 3.8 %). According to Kantar, America’s Walmart should remain the world’s leading retailer in 2025, ahead of Amazon, which will reduce the gap between them. As for the Chinese JD.com, it should display the strongest growth, placing third on the podium in five years’ time.
To support its projections, Kantar made seven key points regarding the upcoming retail trends. The first of which designates the Asia-Pacific region, which has the highest percentage of online sales (19%), as a source of inspiration for retail giants, as it is home to data-driven business models.
“The growth potential isn’t limited to China. Markets such as India and Indonesia have also been offered new opportunities with the expansion of retail giant Alibaba and other new innovative players such as Flipkart or Grab, one of the retailers specialized in fast delivery,” commented Kantar.
Another subject has come to the forefront, presenting a potential source of conflict for distributers and brands. Namely, cross-border trade, which has been upset by the practice of e-traders.
“Although Alibaba and Amazon simplify our lives, cross-border business will disturb pricing policy, inventory management and create gray areas in legislative frameworks," warned Kantar. Other macro-trends to look out for include visibility, accessibility, margins and relevance, according to the market analysis specialist.
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