Wazir Advisors has released its latest report titled “India Apparel Market Review: Dynamics and Direction 2020–2025.” The study evaluates the performance of 70 apparel brands and retailers with a combined revenue of ₹1,34,500 crore in FY25. It examines revenue growth, profitability trends, and marketing expenditure across different segments of the Indian apparel market over the last five years.
Key Insights
Value retail leads market growth
Value fashion retailers have emerged as the strongest performers, recording a 24% CAGR between FY20 and FY25. Their share in the organized market increased from 18% to 29% during the period. Expansion into Tier-2 and Tier-3 cities, improved inventory management, and a shift toward more price-conscious shopping helped drive this growth. The segment also added nearly 2,500 new stores over five years.
Discounting becomes a permanent strategy
Heavy discounting has increasingly become the norm in the online fashion market. Average listed discounts on Myntra rose from 28% in 2020 to 43% in 2025. In many high-volume categories, 60–73% of products are offered at discounts exceeding 50%. After the pandemic, consumers have become more deal-oriented, often waiting for large sale events and comparing prices across platforms. This trend has put pressure on margins across the industry.
Distribution expansion reaching saturation
In several categories—including innerwear, single-brand lifestyle outlets, and international fashion brands—store-led growth is approaching saturation. With most metro and general trade markets already covered, companies are now focusing on premiumisation, increasing revenue per store, and strengthening e-commerce and exclusive brand outlets to sustain growth.
Ethnic wear retail remains resilient
The ethnic apparel segment continues to perform consistently, maintaining PAT margins of around 10% during the review period. Demand driven by occasions and weddings, along with growing premiumisation and private equity interest, has supported profitability in this category.
Startups show strong growth but limited profitability
Apparel startups recorded significant expansion, with revenues increasing from ₹210 crore in FY20 to ₹1,868 crore in FY25. However, most remain unprofitable, reporting PAT margins of –5.6% in FY25. Although marketing expenses have decreased from a peak of 26.8% of revenue to 14.8%, they still remain high as many brands prioritize customer acquisition over profitability.
Apparel’s share in consumer spending declines
While the apparel market continues to grow in absolute terms, its share in Private Final Consumption Expenditure (PFCE) has declined from 7.1% in FY13 to 5.1% in FY24. This shift reflects faster growth in spending on services, transportation, and other lifestyle categories.
Commenting on the report, Rohit Bhatiani stated that although the Indian apparel market has expanded significantly in recent years, profitability has not kept pace. He emphasized that heavy reliance on discounting has weakened pricing power across segments. According to him, the next phase of growth will depend on better product assortment, improved channel productivity, and genuine premiumisation rather than just expanding retail footprints.