Wazir Advisors Report Tracks Shifts in India Apparel Market, FY2020–25

Wazir Advisors has published “India Apparel Market Review: Dynamics and Direction 2020–2025,” analysing 70 brands and retailers with a combined revenue of Rs. 1,34,500 crores (FY25). The report reviews performance across FY2020–25, focusing on revenue growth, profitability, and marketing expenditure across different categories of apparel retail.

According to the findings, value fashion retailers recorded a compound annual growth rate (CAGR) of 24% between FY20 and FY25. The segment’s share of the organised market increased from 18% to 29%. Expansion in Tier 2 and Tier 3 cities, stricter inventory management, and a shift among price-sensitive consumers contributed to this trend. Over the five-year period, the segment added about 2,500 stores.

The report notes that discounting has become a structural feature of the market. Average listed discounts on Myntra increased from 28% in 2020 to 43% in 2025. In high-volume categories, 60–73% of styles are offered at discounts exceeding 50%. Post-COVID consumer behaviour indicates a growing tendency to wait for major sale periods and compare prices across platforms. This pattern has placed pressure on margins across the industry.

It further highlights that store-led expansion is reaching maturity in several categories, including innerwear, single-brand lifestyle, and global fashion. With general trade and metro markets largely covered, future growth is expected to depend on premiumisation, higher revenue per store, and diversification into e-commerce and exclusive brand outlets.

The ethnic wear

segment continued to report PAT margins of around 10% during the period under review. This performance has been supported by occasion-based demand, premiumisation, and increasing private equity interest, making it one of the more consistently profitable formats in the sector.

The startup segment recorded strong revenue growth, rising from INR 210 crore in FY20 to INR 1,868 crore in FY25. However, these companies remained loss-making, with PAT margins of -5.6% in FY25. Marketing expenditure, while lower than the peak level of 26.8%, remained at 14.8% of revenue, indicating continued dependence on customer acquisition.

The report also observes a decline in clothing and footwear’s share of Private Final Consumption Expenditure (PFCE), from 7.1% in FY13 to 5.1% in FY24, as expenditure on services, transport, and other categories expanded more rapidly.

Speaking at the report’s release, Rohit Bhatiani, Executive Director, Wazir Advisors, said:
“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.”