The latest publication of Hamburg-based business intelligence organization yStats.com “Global Underwear Market Report 2014” reveals a variety of trends at work affecting sales of this commodity worldwide. While some market leaders are familiar, there are also new stars rising. Some markets have sluggish or negative growth, and at the same time there is rapid increase in other countries.
The yStats.com publication finds that expansion in the global underwear market in the near future will come primarily from emerging markets where consumers with growing incomes increase their spending on this category. Growth is expected also from product segments with untapped potential in the advanced markets, such as functional underwear and plus size lingerie. The report also suggests that the rapid spread of B2C E-Commerce represents an additional growth potential and at the same time a competitive challenge to traditional underwear market players.
While some major underwear brands worldwide grew only modestly in 2013, with one-digit percentage rates, Italy-based Calzedonia recorded a sales increase of more than 10% year on year and planned to use the favorable momentum to expand store franchises in Europe and expand to Far East. Another large European player, Triumph, saw its sales decrease by a similar percentage share, primarily due to decline in demand in Europe and increased competition. Meanwhile, Delta Galil Industries, a fast growing international underwear company, acquired several underwear brands between 2010 and 2012 and reached almost +20% growth in sales, hoping to top a one-billion sales mark in 2014. A player from the emerging Chinese market, the underwear brand Cosmo Lady recorded an even higher year-on-year growth in 2013 and filed for an IPO in 2014.
Among the global underwear market leaders are L Brands (Victoria’s Secret, La Senza and other brands), with a worldwide sales figure in reaching high one-digit in EUR billion, and another US-based company, Hanesbrands. While North America was traditionally the primary market for Hanesbrands, in 2014 the company purchased the European underwear manufacturer and retailer DBApparel. In other clothing company moves related to the underwear market, Levi Strauss & Co. and Lacoste each planned to launch men’s underwear sections in 2014. Meanwhile, Germany-based Otto Group launched its underwear brand Lascana through own online store and online store on Tmall in November 2013.
Demographic changes and lifestyle shifts contribute to some variation in trends in underwear sales in regions and countries around the world. In the USA, men’s underwear and lingerie for women aged 45 and older are among the segments boosting sales growth, which reached only a small one-digit percentage. A majority of consumers in the USA indicated a willingness to pay more for underwear made of natural fabrics rather than synthetics. The underwear market in Brazil is expected to accelerate at a high one-digit percentage growth rate between 2013 and 2014, with increases in both domestic production and imports of underwear. With growing incomes, consumers in the Brazil are motivated to purchase new underwear by factors other than just the need to replace an old item.
Looking at the underwear market in Europe, underwear sales growth in Germany is stimulated by increased demand for functional underwear and overall consumer confidence. The fastest growing sales channels are underwear chain and mono-brand stores and E-Commerce, while clothing specialist stores and multi-brand underwear stores in Germany recorded a decline in underwear sales in 2013. In Italy, both domestic consumption and exports of underwear are forecasted to resume growth in 2014. The underwear market in Russia is growing at high one-digit rates, boosted by increasing consumption in the medium-price segment. Luxury underwear is one of the fastest growing segments, increasing faster than the market. Consumers in Russia are also growing accustomed to buying underwear from online stores.
Other European markets had slower growth rates. The lingerie market in France is one of the largest in Europe in terms of per capita spending, and France is also one of the biggest lingerie exporters. In spite of this lingerie leadership, the women’s underwear market in France grew only by slightly more than 1%, while sales of men’s underwear decreased last year. In the United Kingdom, the underwear market recorded slow growth, with women’s underwear accounting for a lion’s share of total underwear spending of a typical household.
Turning to Asia, the underwear market in China is one of the most competitive in the world, with over 3,000 companies endeavoring to take advantage of the high market growth potential. The forecasts of underwear market growth in China for the next several years reach double-digit figures. Meanwhile, the underwear market in Japan is forecasted to continue decline due to a consumer shift to lower-price items and the decreasing population. However, the functional underwear segment still records growth.
Though the Indian underwear market remains largely unorganized, mono and multi-brand stores, as well as the online channel show healthy signs of growth. In the next ten years, the Indian underwear market is forecasted to growth by more than 10% annually.
In the Middle East & Africa region, one of the most prospective markets, Saudi Arabia, expects its underwear sales to be boosted by the change in women’s employment rules. Women there are expected to be more willing to spend on underwear as they are served by female staff in lingerie stores. The expected growth lured such global player as Marks & Spencer to choose Saudi Arabia as the first market for its specialized underwear and beauty store.