Apparel Online India Issue 1-15 March '18 | Page 13

WORLD WRAP
growth. Regarding the other major
economies in the region, Spain will
outperform the rest, with a 2.7%
expansion. Germany’s economy is
seen increasing at 2.3%, followed by
France’s at 2.0%.
The retail scenario in the Western
and Eastern part of Europe are
poles apart. While the value of
the total retail market in Western
Europe in 2017 reached around
2.6 trillion euros, the retail market
in the Eastern part only reached
565.6 billion euros, a noteworthy
difference, though both are on a
growth path. It cannot be overlooked
that the west of Europe has many
prospering countries, such as
France and Germany. The market
value of retailing in Germany
alone covers one fifth of the total
retailing in Western Europe, and
when combined with France, the
total retailing accounts for nearly
half of the whole of Western Europe.
The main growth in retail has been
coming from online sales. A report
by Forrester predicts that online
retail sales will grow at an average
of 11.3% per year over the next five
years in Western Europe. Italy and
Spain will s ee the fastest online
sales growth, and by 2022, 20%
of non-grocery retail sales will be
online.
Emerging markets in Eastern
Europe such as Romania, Poland
and Slovakia have rapid growth
rates for GDP at over 3%, but they
are coming from a lower base than
more mature economies in Western
Europe and pay lower wages. A
fact to be considered is that going
forward these markets will be
attractive to manufacturers who
can compete on price. So Eastern
Europe may develop as a conducive
manufacturing base for Western
Europe in the next decade. Also
those manufacturers that are fast
and flexible suppliers operating
close to Europe with a vertical
supply chain will have a good chance
to connect with retailers who buy
short runs of on-trend products with
a view to selling out before having to
reduce prices.
In the meanwhile, manufacturers
from other sourcing destinations
looking to service the improving
retail scenario in Europe have to
be very careful in approaching the
market. So, what are the factors
that can impact growth for apparel
retail…? For one, products must
clearly stand out from the rest
because of their design, origin,
production technique involved
or story behind them. There are
opportunities in sportswear and
athleisure categories, with garments
offering performance benefits such
as breathability, moisture wicking,
multiway stretch, or waterproof,
quick-dry and smart fabrics that
can measure body metrics, having a
definite edge over regular garments.
Retail experts are of the opinion
that countries that benefit from
Europe’s Generalised Scheme of
Preferences (GSP), will be preferred,
provided they combine this aspect
with highly efficient production in
order to offer a cost price advantage
over competitors in non-duty-free
countries or a better product at
an equivalent price level. Further,
while countries in Europe may
show similar macro-trends, the
competitive landscape is unique for
each one. The best way to find out
which country matches the offerings
that a manufacturer may have, is to
conduct detailed research on each
country, looking at product segments
and price levels.
The secret of future growth of
business in Europe is to develop
styles that can be partially prepared
in advance and are only finished
according to the final consumer
request, possibly at another location
closer to the point of sale. The
reality is that if a manufacturer
can offer the flexibility of shorter
production runs and/or quicker
lead times, such offers are in high
demand. This strategy can help
to meet the growing consumer
interest in customisation and
premiumisation.
Another important direction is to
improve sustainability performance.
The race is on to industrialise the
recycling process and to create a
circular economy for clothing. The
bottom line is that European retail
is finally looking up and apparel
consumption in the region is forecast
to grow to ¤ 372 billion by 2020.
www.apparelresources.com | MARCH 1-15, 2018 | Apparel Online India
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