In light of predictions of a 15% decline in global apparel sales in 2020, due to impact of the Covid-19 pandemic, China is poised to topple the U.S. as the largest apparel market in the world over the next three years.
According to a report issued by GlobalData last week, Covid-19 is set to cut US$297 billion from the global apparel market by year-end, representing a 15.2% decline on 2019.
The world’s largest apparel market, the U.S. is predicted to account for 42% of all lost spend, which will contribute to more major chains filing for Chapter 11 over the next few months, warned the report.
However, Asia-Pacific nations are expected to fair better compared to their American and European counterparts, driven by the growth in domestic demand, prompting China’s rise in the global ranks.
“We expect the developing APAC markets including China, India and South Korea to increase their position in the Top 10 global apparel markets by 2023, as mature Western markets lose out. China is expected to pip the U.S. as the largest apparel market by 2023,” said GlobalData, in the report.
In terms of value, the 10 worst impacted markets will represent 85% of this total loss, with mature markets suffering the hardest.
“Though the recovery has already started across the APAC markets, apparel sales will take some time to rebound amid dampened consumer confidence, the slump in tourism, the threat of impending global recession and high unemployment rates. However, some of the lost sales will be compensated by the level of ‘revenge buying’. Some brands across China for instance are seeing store sales return to 80-100% of pre-Covid-19 trading levels as the country relaxes lockdown measures,” said Vijay Bhupathiraju, Retail Analyst at GlobalData.
Looking forward, the top 10 apparel markets for sales globally in 2023 are set to be: China (#1), the U.S. (#2), Japan (#3), India (#4), Germany (#5), UK (#6), Italy (#7), Russia (#8), South Korea (#9) and France (#10).