Its estimated value was ₹9.30 lakh crore in FY25 after expanding at a compounded annual growth rate (CAGR) of close to 7 per cent since FY18.
India’s apparel retail market is expected to grow with rising contribution from e-commerce and value fashion, and reach $175.8 billion by FY30, Care Ratings said.
Store expansion will be mainly in the value segment and affordable ethnics.
Tier-II and tier-III cities are emerging as major growth hubs for retailers.
The e-commerce sector is projected to grow faster than brick-and-mortar stores.
Store expansion will be primarily in the value segment and affordable ethnics. Tier-II and tier-III cities in the country are emerging as major growth hubs for retailers, driven by higher disposable incomes, digital adoption and evolving consumer preferences.
Consumers in these cities are now more aspirational and brand-aware, with growing purchasing power enabling them to explore the latest fashion trends.
Brands such as Zudio, Max Fashions, Reliance’s Yousta and StyleUp are increasing their presence in smaller cities.
The e-commerce sector is projected to grow faster than brick-and-mortar stores, fuelled by increasing internet penetration, convenience and Gen-Z’s influence on fashion trends, Care Ratings said.
The organised retail sector, accounting for nearly 41 per cent of the overall market, is set to grow by 10-13 per cent, spurred by the entry of international brands, consumer preferences for branded and structured retail formats, the rising appeal of value fashion, and the shift towards online shopping.
E-commerce, accounting for 22 per cent of the organised retail market, is a major growth driver, projected to reach ₹5 trillion by FY30, or close to 25 per cent of the organised retail market, driven by the expansion of online platforms and digital-first brands.
The apparel market encountered notable challenges in the second quarter (Q2) of FY25, with inflationary pressures dampening consumer demand. Year-on-year (YoY) sales growth moderated in FY25 compared to FY24, further influenced by subdued demand and extreme weather conditions.
However, signs of recovery began to emerge from October-November 2024, driven by increased foot-falls and sales during the festive and wedding seasons. The expansion of online sales events and the growing adoption of omni-channel strategies by brands have accelerated e-commerce growth, positioning digital platforms as key drivers of future sales performance, Care Ratings noted.
India’s value fashion market, estimated at ₹3.5 trillion in FY24, is set to expand at a CAGR of 7 per cent, reaching ₹5 trillion by FY30.
Value retailers are capitalising on this shift by offering stylish, high-quality apparel at competitive prices, positioning themselves as strong alternatives to local boutiques.
Private labels are expected to account for a substantial portion of the retail industry by 2030. Largely all value retailers are private labels led with some national brands included to complete the retail offering.
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