The Hindu Business Line : ‘Brazil most attractive emerging market for apparel retailers’

Mumbai, June 5 Brazil’s high spending on apparel items and strong clothing imports — along with its consumers’ preference for the latest fashions — make the country the most attractive emerging market destination for apparel retailers, according to a new study by the global management consulting firm A.T. Kearney.

Brazil finished ahead of China and India in the A.T. Kearney Retail Apparel Index, which looks at ten drivers, including apparel consumption and clothing imports/exports, to rank the top 30 emerging markets for retail apparel investments.

“The Retail Apparel Index was published for the first time this year as a companion to A.T. Kearney’s Global Retail Development Index (GRDI), a study of retail investment attractiveness among 30 emerging markets conducted annually since 2001. The analysis evaluates more than 20 apparel markets to identify the top 10 countries in terms of market size, growth prospects and consumer affluence” said Mr Saurine M. Doshi, Partner, A.T. Kearney India.

“There is great potential for global apparel retailers to succeed in Brazil,” said Ms Hana Ben-Shabat, a partner with A.T. Kearney. “Brazil is the most attractive apparel market for reasons of demographics and demand.”

Brazil’s clothing market is growing at more than 7 per cent annually and is estimated at $37.2 billion. The country is young, with more than 60 per cent of population below the age of 29, and its consumers spend $402 annually on apparel — six times more than the average Chinese consumer.

Brazilian consumers use credit for apparel purchases far more frequently than in other emerging markets. In addition, small, local retailers make up more than 60 per cent of a highly fragmented domestic retail apparel market.

China and India closely trail Brazil in the Apparel Retail Index. Both countries have significant potential to increase the average spend per capita on clothing as prosperity continues to rise.

“In India, apparel is the second largest retail category (behind food and groceries), representing 10 per cent of the $37-billion retail market. It is expected to grow 12-15 per cent per year as disposable income grows at rates higher than in China or the US. Apparel retail growth will be driven by the burgeoning Indian middle class, the increasing development of apparel-focused shopping malls and the continued penetration of credit cards,” said Mr Hemant Kalbag, Principal – Consumer Industries & Retail Practice, A.T. Kearney India.

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