Although consumer confidence in Western Europe and North Americahas still yet to fully recover and heavy discounting may have affect sales margins, global apparel and footwear sales are predicted to reach 2 trillion dollars by 2018, according to the latest data released by Euromonitor International, global market research company.
The global apparel and footwear industry grew 5 percent, or 85 billion dollars last year, (with current terms and fixed exchange rates) despite the slowdown of predicted sales in China. In particular, footwear was one of the stand out sectors of growth in 2013, growing by 6.1 percent compared to a 4.8 percent increase in apparel, according to research.
The international footwear market has been routinely surpassing global apparel sales over the past ten years according to Euromonitor, with women's footwear driving the growth as the shoe becomes more and more of an fashion statement. Children's s wear also grew 6.4 percent last year, as parents spend more per child due to smaller family sizes and later parenthood plans.
However, Euromonitor notes that the majority of the industry growth is very depended on the BRIC countries (Brazil, Russia, India and China) and warns of the possible risks of being over reliant on them. "BRIC countries generated over a quarter of the world's apparel and footwear sales and are expected to account for over 64 percent of projected global sales over the next 5 years," commented Magdalena Kondej, head of apparel and footwear research at Euromonitor.
"This carries risk because of the vulnerability of the economy in Brazil and Russia and the slowing economic growth in China. While the emerging markets are throwing invaluable lifelines to the apparel industry at a time of sluggish Western demand, diluting dependency on that growth will be a challenge," adds Kondej.
Euromonitor also noted that one of the main challenges for the apparel and footwear industry will be to end the cycle of discounting and increasing margins. Apparel unit prices have reportedly dropped 5 percent globally since the start of the economic recession, which has negatively affect profitability. Consumers are becoming more and more used to discounting and customers attitudes will have to be shifted in order to change focus and sales drive.