Home > Blog > E-commerce Apparel Industry in India: Trends, Challenges, Opportunities & Solutions

India is the second largest producer of textiles and garments in the world. India’s fashion and apparel industry is a significant contributor to the country’s economy, accounting for 2.3% of the GDP. The industry is projected to experience strong growth in the coming years, with a projected CAGR of 10%, and is expected to reach US$ 190 billion by 2025-26. 

E-commerce Apparel Industry in India

According to the Indian E-commerce Trends Report of Unicommerce, the online fashion and accessories industry in India witnessed an order volume growth of 20.9%, becoming the segment with the highest order volumes in FY22 as compared to the previous financial year. 

indian e-commerce trends report of unicommerce

The apparel industry is known for its ability to adapt to change, with new trends and styles emerging regularly. Change has always been the wardrobe essential of this industry, happening almost every quarter of each year. This constant need for adaptation also brings its own set of challenges for the industry. 

Keeping up with the fast-paced nature of the industry can be difficult for brands and retailers, as they need to stay ahead of the latest trends and styles while also managing costs and maintaining profitability. With a rotational shift happening in the industry, Unicommerce decided to go ahead and curate e-commerce fashion trends, challenges, opportunities, and solutions that can help you manage and schedule your business action plan in 2023!

Let’s look at the growing trends, challenges, opportunities & solutions in the apparel industry.

Apparel Industry Trends

The apparel industry is constantly evolving, with new trends emerging each season. Here are a few of the key trends to watch in the industry in the coming year:

trends in the apparel industry

Trend #1: Fashioning the Future With Sustainability

Consumers are becoming increasingly conscious of the environmental impact of the clothing they purchase. As a result, sustainable fashion, also known as eco-fashion or ethical fashion, is becoming an increasingly important trend in the industry. 

Brands are increasingly using organic cotton, bamboo, and linen, which are grown without synthetic pesticides and fertilizers. Recycled materials, such as recycled polyester and nylon, are also becoming more popular as they help to reduce waste and pollution. 

Another key aspect of sustainable fashion is the use of sustainable production methods. This includes reducing water and energy consumption, using low-impact dyes, and implementing fair labor practices. As consumers become more conscious about their purchasing power and environmental impact, it is expected that sustainable fashion production will become increasingly important.

Trend #2: Revolutionizing Fashion With Athleisure

Athleisure, a trend that combines athletic and leisure wear, has been revolutionizing the fashion industry in recent years. This trend has been driven by the increasing popularity of comfortable, functional clothing worn both in and out of the gym.

As per Statista:The sports and athleisure retail market in India was valued at 158 billion Indian rupees in financial year 2021, and estimated to grow to 402 billion rupees by financial year 2025. Footwear made up the largest chunk of the market during the measured time period, amounting to about 90 billion rupees in 2021, and projected to grow by 21 percent by 2025.

Brands are now offering a wider range of options, from performance-focused gear to more casual and street-style pieces. This has led to the creation of new styles, such as the fusion of athletic wear with formal wear, and has opened up new possibilities for fashion designers.

Another aspect of athleisure is the use of technology, such as moisture-wicking fabric and UV protection, to enhance the functionality of athletic wear. Apparel businesses are investing in research and development to create new fabrics and technologies that can improve the performance of athletic wear.  

Overall, athleisure has been a game-changer in the fashion industry, with its versatility and functionality driving the demand for athletic wear. As the trend continues to evolve, it’s likely that we’ll see more innovations in the design, materials, and technology of athletic wear, making it even more appealing to consumers.

Trend #3: Market Growth Headed by Women and Kids Wear

The shift in lifestyle and priorities of modern women is leading to a greater focus on self-awareness and appearance, driving growth in the women’s apparel market. As they are becoming more conscious of their fashion choices, the demand for trendy and fashionable clothing is increasing.

The market for kids’ wear is driven by factors such as the increasing number of working mothers and the growing trend of parents investing in high-quality clothing for their children. According to a recent report by Wazir Advisors, India’s kids’ wear market is expected to reach INR 1,23,000 Crores by 2023, growing at a CAGR of 13%. 

market growth headed by women and kids wear

In terms of product segments, the market for women’s wear is segmented into ethnic wear, western wear, and lingerie. Western wear is expected to be the most lucrative segment in the women’s wear market, driven by the increasing demand for casual and formal wear. With the growth of e-commerce, the market is expected to continue growing, providing opportunities for fashion retailers and manufacturers.

Trend #4: Style and Functionality are Key to Modern Consumers’ Wardrobe

When it comes to fashion, modern consumers are looking for clothing that not only looks good but also serves a purpose. The combination of style and functionality is becoming increasingly important in today’s wardrobe. Consumers are looking for comfortable, durable, and versatile clothing that can be worn for different occasions and meet different needs.

Functionality is especially important for activewear and athleisure, as consumers seek clothing that can keep up with their busy lifestyles and support their physical activities. Fashion, on the other hand, fashion is essential in creating a unique and personal style. Consumers are looking for clothing that reflects their personal tastes and preferences and makes them stand out. 

Brands are responding to this by offering a wide range of options, from classic and timeless styles to trendy and fashion-forward pieces. As lifestyles and fashion preferences evolve, brands and retailers that understand and respond to these needs will be well-positioned to succeed in the market.

Trend #5: The Growing Era of Digital First Brands

The apparel industry is currently experiencing a shift towards digital-first brands. These brands prioritize online sales and digital marketing over traditional brick-and-mortar retail and are utilizing technology to create a seamless and personalized shopping experience for consumers.

One of the biggest advantages of digital-first brands is their ability to reach a global audience through e-commerce. These brands can sell directly to consumers, bypassing traditional retail channels and cutting down on costs. This allows them to offer a wide range of products at competitive prices.

With the advancement in technology and more people turning to the internet for fashion inspiration and shopping, digital-first brands will have a significant opportunity to thrive in the industry.

Opportunities in the Apparel Industry

The Indian textile and apparel market has significant growth potential, with the industry projected to reach $190 billion by 2025-26. To reach this target and establish a sustainable textile industry, Indian businesses must take advantage of government support schemes, meet global buyer sustainability demands, and prioritize supply chain traceability.

opportunities in the apparel industry india

Government policies and regulations have directed their focus on this industry. Mr. Piyush Goyal, the Minister of Textiles, announced that the Indian government plans to create 75 textile hubs across the country. Not to mention the government has also reduced the custom duty rates on caprolactam, nylon chips, and nylon fiber and yarn to 5%. These regulations have created plenty of opportunities for the Textile and Apparel Industry in the e-commerce sector.

With lined-up opportunities, there come several challenges for simplified apparel e-commerce.

Current & Future Challenges and Problems in the Apparel Industry

The new trends, changing consumer habits, and market shifts have shed light on the new challenges the e-commerce apparel industry is facing in 2023. 

current & future challenges and problems in the apparel industry

  • Difficulty in managing customized order allocation and inventory sync
  • Unable to align warehouse operations manually 
  • The impact of COVID-19 and the need to adapt to the changing retail landscape and consumer behavior
  • Inability to manage deliveries, leading to a higher % of Customer Initiated Returns (CIR)
  • Hard to align multiple sales channels and offline stores alongside 
  • Back-breaking for e-commerce platforms to manage multiple vendors
  • Untimely and inefficient delivery of products
  • No stock rotation leading to outdated stock
  • The increased cost of Reverse Logistics
  • The need to navigate the complex and ever-changing regulations and compliance requirements
  • Poor management of returns and cancellations
  • Difficulty in predicting and managing demand, inventory, and logistics

Evolving Practices as a Solution to Challenges in the Apparel Industry

Starting up your own fashion e-commerce business has never been easier, especially post the pandemic. Right from managing the inventory and warehouse operations to timely updating the digital attire of an e-commerce store, the aspects are many. But with the advancement of technology, it has become important to adopt some upcoming practices, aligning the sales with your operations.

evolving practices as a solution to challenges in the apparel industry

Following are some of the upcoming e-commerce practices that act as a solution to the challenges you are witnessing during these tough times.

  • Delivering Omnichannel Experiences

It has become imperative to provide customers with a seamless experience at all touchpoints. Integrating and aligning offline and online channels together helps both businesses and customers develop better relationships. Omnichannel retail offers unhindered shopping experiences to customers and helps keep the inventory and stock levels uniform. With its advanced Omnichannel solution, Unicommerce has enabled effortless business operations & tremendous growth for Iconic Fashion India

  • Serving Directly With the D2C Business Model

D2C is quite a recent approach wherein brands deal with customers directly, eliminating intermediaries. While many new brands are adopting this strategy, some established brands are switching from traditional business models to D2C models. According to Unicommerce’s e-commerce Q3 2022 trends report, the e-commerce industry witnessed robust order volume growth of 48.3% through the brand websites, while marketplaces recorded a 21.5% order volume growth.

But the question is, what makes it so different that almost all the new brands are swearing by this approach? Well, the biggest advantage for a D2C brand is that they can shorten the time to sell the products, giving their customers a better price while earning a higher margin.  Direct to Consumer (D2C) e-commerce allows the original brand voice to come in front, giving brands better engagement with their customers. Moreover, the new-age solutions of Unicommerce are made specifically for D2C brands like Enamor, Chumbak, etc., to scale on higher revenues.

Why Unicommerce?

Unicommerce – Solutions to problems in the Textile and Garment industry

Unicommerce, the #1 cloud-based e-commerce solution, is focused on changing the face of Indian Fashion retail.  It is on a mission to automate the largely scattered apparel industry to make it technology-driven. Its Order and Warehouse Management solutions help to automate clients’ supply chain operations for both online and offline businesses (B2B and B2C). Moreover, Unicommerce comes with 200+ integrations; Cart, Marketplaces, Logistics, ERP, and POS systems to manage the needs of Wholesalers, Distributors, Retail Chains, Individual Store owners, and e-commerce sellers to increase revenue and save operations costs.

Unicommerce’s robust supply chain technology solutions have resulted in exponential business growth, & improved unit economics for over 20,000+ global marketplaces & brands across India, the Middle East, the Philippines, and Southeast Asia. Some of the notable clientele of Unicommerce in the fashion and apparel industry include TCNS Clothing Co. LTD. (W, Aurelia, Elleven), Oryvo, Brand Studio, Bestseller (Vero Moda, Jack & Jones, Only), Being Human, GAP, GANT, Crocs, etc. 

Below is a quick brief about Unicommerce’s offerings; click the links to know more in detail.

  • Advanced Warehouse Management – Unicommerce helps track inventory counts and manage dispatched and allocated orders, making the flow of operations simpler and more efficient. Moreover, you get a real-time update on the entire warehouse operations across multiple locations. 
  • Omnichannel Solution – Unicommerce offers an Omnichannel Solution so that you can route online orders to the nearest offline store. 
  • ERP/ POS management – All the current ERP/POS systems (Tally, Base, Oracle, Navision, SAP, etc.)  get effortlessly integrated into our omnichannel software product
  • Bundle Management – Unicommerce has a Bundle Management feature that lets you create combo packs while updating combo product SKUs in real-time across multiple sales channels. 
  • Logistics Integration – Unicommerce helps brands reduce cancellations and returns as it automates the whole process, ensuring the right product gets shipped to the customers
  • Unified Vendor Panels – With the Vendor Management solution, e-commerce fashion retailers can seamlessly manage suppliers via centralized login.
  • Centralized Inventory Management – To enable more significant cost savings, the efficient Inventory Management system restricts bad stock while minimizing the risk of overselling.
  • Accurate Report Analysis – Unicommerce lets you analyze and scrutinize your daily operations with its Dashboard segment. You can track the number of orders fulfilled, Sales achieved, Returns progressed, etc. 
  • E-commerce Returns Management – Managing RTO and CIR are not difficult anymore. Unicommerce offers a comprehensive returns management solution through a centralized panel to manage returns across all sales channels, amplifying your overall sales profits. 
  • Marketplace Integration – Having come pre-integrated with 40+ marketplaces, Unicommerce lets you sell efficiently across multiple sales channels such as Amazon, Myntra, Flipkart, etc. 
  • Simplified Fulfillment – Unicommerce simplifies the process of fulfillment with its fastest and error-free order fulfillment feature.

To coincide, e-commerce brands in the fashion and apparel industry are rising. The Apparel industry is entering a phase where the opportunities are endless, provided the sector is getting constant assistance and support from the government. New and updated practices are required to address the rising challenges. However, online fashion brands must reorganize their business model to cater to evolving demands of the competitive business environment.

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