The dynamics of the apparel industry are changing dramatically. The size of the global apparel business is growing and is expected to generate double digit growth between now and 2020, much of it coming from developing markets. To succeed amid the shifting tides, companies need to build up competence in four disciplines.
The glittering power of cities for luxury growth
One of the most dramatic aspects of the emerging-market economic revolution that is getting more and more attention is the growing economic power of cities and the extreme growth concentration within a limited number of megacities. The world’s top 600 cities (in terms of absolute GDP) are expected to drive nearly two-thirds of the global economic growth by 2025. Massive urbanization will continue across emerging markets, which will envelope three-quarters of these large cities.
In luxury women’s ready-to-wear (RTW), the weight of emerging countries will grow from less than 10 percent a decade ago to 32 percent in 2025. In luxury spirits and high-end cosmetics, the share of emerging markets will double in the next decade to represent 44 and 47 percent, respectively. Within this timeframe, these markets will have grown three times faster than mature markets.
Size isn’t everything: Turkey’s fast-growing luxury market
Turkey is one opportunity for above-market growth. This transcontinental nation of 76 million people constitutes just a small slice of global luxury (roughly 1 percent of total sales,
according to Euromonitor), but is among the fastest growing markets for luxury goods in the world. Between 2008 and 2012, luxury sales in Turkey jumped by 37 percent.