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Fast fashion booms

 

clothes, fashion, shoppinng, womenswearFast fashion has made its way into Australian consumers’ wardrobes over the past five years, with industry revenue growing by an estimated 8.7 per cent annualised to be worth $1.1 billion in 2013-14, according to IbisWorld.

The industry has grown from a relatively low base, with domestic fast fashion retailers commanding the majority of market share at the start of the period, however, the industry landscape has changed remarkably following the entrance of major international retail giants.

Zara opened its first Australian store in April 2011, with Topshop hot on its heels. In March 2014, H&M and Uniqlo opened their first Australian stores in Melbourne. The entry of these players is expected to contribute to revenue growth of 9.2 per cent in 2013-14.

Space constraints in shopping centres have limited the ability of industry retailers to expand over the past five years, but as competition heats up and domestic retailers are pushed out of the market, store premises in some locations are expected to open up.

As a result, industry establishments are forecast to grow at a faster pace over the next five years. As both domestic and global fast fashion retailers continue to expand their reach to fashion-conscious consumers, industry revenue is forecast to increase over the five years through 2018-19.

The rise of social media and online shopping has fuelled consumers’ desire for new styles and trends on demand, as they are constantly exposed to the latest designer fashion from runway shows.

Weak consumer sentiment and subdued discretionary income growth following the global financial crisis have prompted consumers to look for cheaper alternatives.

IbisWorld industry analyst, Lauren Magner, says this has contributed significantly to the popularity of fast fashion stores due to their ability to offer low prices while continually updating product ranges with new styles and designs.

Fast fashion retailers take trends straight from catwalks and are able to respond quickly to changes in demand. Industry players typically have very short production times and will usually release clothing in small batches. This creates a scarcity effect whereby consumers are more inclined to purchase a product on the spot, as it will probably be gone by the next week.

“Fast fashion stores, particularly international brands, have sophisticated, vertically integrated supply chains, which allows them to take advantage of current and emerging trends,” says Magner.

The Fast Fashion industry is characterised by high market share concentration, and major players include Cotton On, Valley Girl, and Zara.

For more information, visit IbisWorld’s Fast Fashion report in Australia industry page.

 

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