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2022: A year of recovery and caution for the fashion industry

With the lifting of pandemic-related restrictions around the end of the previous year, 2022 started with an inherited mixture of anxiety, hope and vigour to revive and reclaim the pre-COVID-19 normalcy.  When asked what he would do next, a publisher friend, who had been infected twice with COVID and his print publication shut for two years, said, “Publishing is the only thing I know, and this means I have to pull in everything to re-launch the publication at any cost.” Such was the state of mind prevalent across businesses and the working force battered by the pandemic.

Similarly, the fashion industry started the year on the same note. Long-shuttered businesses finally opened, dusted and became operational, yet many never returned. Masked customers, who had been shopping online, trickled into stores operated by masked staff.  After experiencing 18 months from early 2021 through mid-2022 of growth, it faced a challenging time again. Persistent inflation and depressed customer sentiments frustrated the growth pace in the year’s second half. Inflation remained at the top of the year; it undercut consumer demand, pushing shoppers to curtail fashion spending.

Globally, apart from the supply chain disruption that rattled the world’s major markets, macroeconomic and political uncertainties deterred businesses from achieving targets. Then the war in Ukraine increased the pressure. This global economic gloom was manifested in consumers’ shopping habits, and the fashion industry bore the brunt of poor demand. Cost-conscious customers cut back their spending, and the difference between the shopping habits of low- and high-income households became more pronounced. The latter category being insulated from the impacts of economic slowdowns continued to spend mainly as they had been.

Contrary to this picture, the apparel market recovered by approximately 16% compared to 2020.  According to a FICCI-Wazir Advisors report, apparel was the largest traded segment accounting for 57% of the total trade, and it stood at $492 billion, followed by fabric with a 13% share. And according to Retailers Association of India, in March 2022, apparel sales grew by 26% compared to what it was during the same period last year, while overall retail sales grew by 28% in the same period.  It also underscores that retail sales grew 15% in November over the same period a year ago or pre-pandemic levels as the wedding season drove up demand for jewellery and footwear.

When it comes to trends, sustainability topped the list. It was no longer a buzz word but considered a crucial factor in shaping the industry. This trend is a relief given that the fashion industry is the second biggest polluter. In 2022, companies worldwide undertook significant corrective measures to become a green and sustainable industry.

Against this backdrop, technology emerged as the unscathed winner as businesses increased their reliance and the prolonged lockdowns made online shopping a trend among consumers. Irrespective of where one is placed in the fashion value chain, the need for technology has become ever more compelling. In 2022, we witnessed exponential growth in tech usage and development in the fashion industry revolving around artificial intelligence, virtual and augmented reality, blockchain and mobile commerce.

The year 2022 can be summed up as a year of recovery. It’s also the year businesses and consumers alike, with the impacts of the pandemic relatively fresh in mind, exercised great caution and, at the same time, became more innovative.

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