Over the last ten years, the retail apparel market in India has expanded at a compound annual growth rate (CAGR) of 10.2 per cent. Rising disposable incomes and increasing urbanisation have supported this boom, which has resulted in a move from unorganised to branded retail.
Looking ahead, the apparel sector is likely to continue growing due to rising wages, favourable demographics, and greater demand for inexpensive fashion, particularly among Gen-Z consumers, according to a study report by the financial advising firm Centrum.
Major players’ retail expansion has increased at a compound annual growth rate (CAGR) of 15.7 per cent over the last five years. Currently, 40 per cent of the market is made up of organised retail, where both domestic and foreign brands are becoming well-known. This change has also been significantly influenced by the growth of e-commerce, particularly in Tier-2 and Tier-3 cities.
The increasing emphasis on private-label clothing, which offers both price and product differentiation, is another noteworthy development.
On the other hand, consumers in smaller cities are more likely to prefer quality and affordability over brand names. Value fashion, which accounts for 56 per cent of the entire apparel market, has emerged as the dominant force in the sector, especially in terms of affordability.
With a projected CAGR of 13.7 per cent from FY ’23 to FY ’27, the mass market expanded by 28.4 per cent in FY ’23. Similar development was observed in the economy segment, which increased by 28.7 per cent in FY ’23 and is expected to rise at a CAGR of 14.0 per cent during the following five years.
With a predicted CAGR of 21.7 per cent from FY ’23 to FY ’27, the mid-premium segment saw remarkable growth of 37.9 per cent in FY ’23.
The premium segment expanded by 45.1 per cent in FY ’23 and is expected to grow at a compound annual growth rate (CAGR) of 25.0 per cent in the ensuing years. In contrast, the premium+ category expanded by 33.0 per cent in FY ’23 and is predicted to rise at a compound annual growth rate (CAGR) of 35.9 per cent by FY ’27.
Within the organised market, segmentation has also developed, with fast-growing segments including as athleisure, western wear, and ethnic clothing. Going forward, rising wages, favourable demographics, and a growing demand for reasonably priced fashion—particularly among Gen-Z consumers—are likely to fuel the garment market’s growth.
