Wazir Advisors, a leading management consulting firm specializing in textiles and retail, has released “India Apparel Market Review: Dynamics and Direction 2020–2025”. The report analyses the performance of 70 brands & retailers with a combined revenue of Rs. 1,34,500 crores (FY25), tracking revenue growth, profitability, & marketing intensity across various segments over the past five years.
Key Findings
Value retail emerges as the decade’s defining winner. Value fashion retailers posted a CAGR of 24% between FY20-FY25, with the segment’s share of the organized market rising from 18% to 29%. Aggressive store expansion in Tier 2 and Tier 3 cities, tighter inventory discipline, and a trade-down shift among price-sensitive consumers drove the outperformance. The cohort added approximately 2,500 stores over the five-year period.
Discounting has become structural. Average listed discounts on Myntra rose from 28% in 2020 to 43% in 2025. Across high-volume categories, 60-73% of styles are listed at discounts of >50%. Post-COVID consumers are increasingly deal-conditioned, timing purchases around mega-sale windows and comparing prices across platforms. This discounting intensity has materially compressed margins industry-wide.
Distribution saturation is forcing a strategic reset. In several categories, including innerwear, single-brand lifestyle, and global fashion, store-led growth is maturing. With most general trade and metro coverage built out, incremental growth must now come from premiumization, revenue-per-store improvement, and channel diversification into e-commerce and exclusive brand outlets.
Ethnic retail holds its ground. The ethnic segment maintained PAT margins of ~ 10% across the period, underpinned by occasion-driven demand, premiumization, and growing PE interest. It remains one of the most consistently profitable formats in Indian apparel retail.
Startups are scaling, but profitability remains elusive. The startup cohort grew revenues nearly ninefold from INR 210 crore in FY20 to INR 1,868 crore in FY25, but remained loss- making, with PAT margins at -5.6% in FY25. Marketing spends as a share of revenue, while declining from a peak of 26.8%, remains elevated at 14.8%, reflecting a growth model still dependent on customer acquisition over unit economics.
Clothing’s share of consumer spending is declining. Despite absolute growth in the apparel market, clothing and footwear’s share of Private Final Consumption Expenditure (PFCE) has declined from 7.1% in FY13 to 5.1% in FY24, as spending on services, transport, and miscellaneous categories has grown faster.
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.”
