Wazir Advisors Report Reveals Structural Shifts in India Apparel Market

Wazir Advisors has released a new report analysing the performance of major apparel brands and retailers in India between FY2020 and FY2025. The study benchmarks 70 companies and highlights changes in revenue growth, profitability, discounting patterns, and retail expansion across the organised apparel market.

Wazir Advisors, a management consulting firm focused on the textiles and retail sectors, has published a report titled “India Apparel Market Review: Dynamics and Direction 2020–2025.” The report evaluates the performance of 70 brands and retailers with a combined revenue of Rs. 1,34,500 crores in FY25. It tracks developments in revenue growth, profitability, and marketing expenditure across multiple apparel segments over the past five years.

According to the findings, value retail recorded significant growth during the period. Value fashion retailers registered a CAGR of 24% between FY20 and FY25. The segment’s share of the organised apparel market increased from 18% to 29%. Expansion into Tier 2 and Tier 3 cities, tighter inventory management, and a shift toward lower-priced products among price-sensitive consumers contributed to this growth. The group added around 2,500 stores during the five-year period.

The report also identifies discounting as an increasingly embedded feature of the apparel retail market. Average listed discounts on Myntra rose from 28% in 2020 to 43% in 2025. In high-volume categories, between 60% and 73% of styles are listed at discounts exceeding 50%. The report notes that post-COVID purchasing patterns show consumers increasingly planning purchases around large sale events and comparing prices across platforms, contributing to margin pressure across the industry.

Retail distribution in several segments has also reached maturity. Categories including innerwear, single-brand lifestyle, and global fashion are seeing slower store-led expansion due to extensive coverage in general trade and metropolitan markets. The report states that future growth may depend more on premiumisation, higher revenue per store, and diversification into e-commerce and exclusive brand outlets.

The ethnic apparel segment maintained relatively stable profitability during the period. The report indicates that the segment sustained PAT margins of approximately 10%, supported by occasion-based demand, premiumisation, and increased interest from private equity investors.

Startups in the apparel sector experienced strong revenue growth but continued to report losses. Revenue for the startup cohort increased from INR 210 crore in FY20 to INR 1,868 crore in FY25. However, the group remained loss-making with PAT margins of -5.6% in FY25. Marketing expenditure as a proportion of revenue declined from a peak of 26.8% but remained elevated at 14.8%, reflecting continued spending on customer acquisition.

The report also notes a decline in the share of clothing within overall consumer expenditure. While the apparel market has grown in absolute terms, the share of clothing and footwear in Private Final Consumption Expenditure (PFCE) decreased from 7.1% in FY13 to 5.1% in FY24 as spending on services, transport, and other categories increased.

Speaking at the release of the report, Rohit Bhatiani, Executive Director, Wazir Advisors noted “The India apparel market has grown meaningfully over the past five years, but growth has not translated proportionately into profitability. The structural reliance on discounting has conditioned the consumer and undermined pricing power across most segments. The next phase of value creation in Indian fashion will be earned through better assortment discipline, channel productivity, and genuine premiumization - not footprint expansion alone. Brands that treat scale as an end in itself, without corresponding margin architecture, will find the compounding costs of distribution and discounting increasingly difficult to absorb.”