The Global Circular Fashion Market is estimated to be valued at US$ 6.09 Bn Or Billion In 2023 and is expected to exhibit a CAGR of 8.8% over the forecast period 2023 - 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
The circular fashion market comprises clothing and apparel that is designed, sourced, and produced using a circular design framework to minimize textile waste and promote longer use and re-use of textiles. Circular fashion incorporates techniques like eco-design, textile recycling, durable and reusable materials, and circular material flows to reduce environmental impact. It offers benefits like sustainability, minimal waste generation, and reduced resource consumption compared to traditional linear fashion which follows a make-use-dispose model.
Market key trends:
One of the major trends driving the circular fashion market is increasing sustainability concerns amongst consumers and businesses. There is a growing preference for brands that are transparent about their sustainability practices and source materials responsibly. The negative environmental impact of traditional fast fashion such as high water and chemical usage, greenhouse gas emissions, and textile waste has brought sustainability in the spotlight. Circular fashion addresses these issues through innovative design, recycling technologies, and material reuse which is appealing to ethically-conscious customers. Furthermore, strict regulations around waste management and eco-friendly product standards in various regions are positively influencing the adoption of circular models in the fashion industry.
Porter’s Analysis
Threat of new entrants: The global circular fashion market is witnessing steady growth and moderate competitive rivalry. However, the requirements of setting up sustainable operations pose a barrier for new entrants.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of alternatives and brands in the market. However, rising awareness about sustainability is driving them towards circular fashion brands.
Bargaining power of suppliers: Popular brands have significant bargaining power over suppliers and manufacturers due to their large scale operations. However, suppliers of recycled materials also enjoy bargaining power.
Threat of new substitutes: Substitutes include fast fashion and non-sustainable clothing. However, increased sustainability concerns are reducing the threat of substitutes.
Competitive rivalry: High in the Circular Fashion Market due to the presence of major global players.
SWOT Analysis
Strength: Rising awareness about environment protection and sustainability. Growing focus on minimizing textile waste.
Weakness: High operational costs associated with sustainable production. Lack of standardized regulations.
Opportunity: Growth in emerging economies and increased adoption among Gen Z. Expanding thrift and resale channels.
Threats: Volatility in raw material prices. Intense competition from fast fashion players.
Key Takeaways
The global circular fashion market is expected to witness high growth, exhibiting CAGR of 8.8% over the forecast period, due to increasing consumer awareness about sustainability. The US market currently dominates with a size of US$ 6.09 Billion In 2023 owing to rising adoption of circular brands by millennials and Gen Z consumers.
Regional analysis: The Asia Pacific region is anticipated to grow at the fastest pace during the forecast period. Countries like India and China are emerging as hubs of circular fashion due to increasing consumer base and presence of domestic brands like Rent The Runway and SU:Casa. In Europe, countries including the UK, France, Italy and Germany account for over 40% share of the global market facilitated by stringent regulations towards textile recycling.
Key players: Key players operating in the global circular fashion market are H&M, Inditex (Zara), EILEEN FISHER, Patagonia, Levi Strauss & Co., The North Face, Nike, Adidas, Pact, Everlane, Reformation, Rent the Runway, ThredUp, The RealReal, Vestiaire Collective, Depop, Poshmark, Etsy, eBay, Tradesy. Existing brands are focusing on expanding reuse channels while new D2C brands are emerging to tap the market potential.
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