Fashion Growth Opportunities City by City

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If you’re in the apparel industry, emerging markets need to be part of your growth agenda. In too many cases, however, expanding into emerging markets is just shorthand for moving into the BRICs (Brazil, Russia, India, China). But the answer isn’t just to look at other countries; the critical point is that investments in growth need to happen at a city-by-city level. That’s because emerging-market cities are capturing most of the global growth in apparel. Some 80 percent of top growth cities for total apparel sales by 2025 will be in emerging markets. Together, these cities will enlarge world apparel markets by an additional $100 billion. (read related article: http://cmsoforum.mckinsey.com/article/fashion-sense-leading-apparel-companies-are-looking-to-cities-for-growth)

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McKinsey International Roundtable
January 31st, 2013
Unleashing fashion
growth city by city
Nathalie Remy

McKinsey & Company | 1
Shanghai
26 3
New York
2 2

McKinsey & Company |
Growth
is granular
3 insights about growth…
2
Growth
is shifting
Growth
is happening
in cities
What does it mean for you?

McKinsey & Company |
AD 1
Evolution of the world’s economic center of gravity
3
1820
1950
2000
2010
2025
est.

McKinsey & Company |
The same shift is happening in the women’s apparel market
MID MARKET LUXURY
2004
2011
2025
Mature Emerging
4
+50%
25%
37%
55%
7%
14%
28%

McKinsey & Company | 5
An important but less talked-about trend…
… the growing power of cities
600 cities = 65% growth
¾ of the top cities are from
the emerging markets

McKinsey & Company |
Rise of the mega cities…
6
From 25 to 60 mega cities
~1/4 of the global wealth
Tianjin = Sweden

McKinsey & Company |
Beyond the mega cities, middleweight cities are increasingly
important
7
7Pune million population
Harbin million population8
Luanda million population9
Puebla million population3
middleweights =
Growth in the 400

McKinsey & Company |
Some urban markets will be as large as countries…
8
Shanghai = Poland + Portugal
Moscow = 4 Ireland
New York = 3 Denmark
Paris = Norway + New Zealand

McKinsey & Company |
Growth concentration in top 600
9
Luxury apparel
Consumer
spending
Mid market
apparel
Consumer
goods
85%
62%
60%
40%

McKinsey & Company |
“CityScope”
11
2,600 cities
A proprietary
methodology
FashionScope
in women’s apparel

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