Most apparel makers expect up to 25% less demand this festive season: CMAI

New Delhi: A majority of apparel retailers and manufacturers expect demand for clothing to shrink by up to 25% this festive season from last year, the Clothing Manufacturing Association of India (CMAI), an industry body, said on Monday.

CMAI surveyed 166 apparel manufactures and brands to gauge consumer demand. “While around 22% of respondents expect the market to pick up over the upcoming festive season, around 78% expect sales in this festive season to dip up to 25% as compared to last year’s sales,” it said in a note on Monday.

CMAI said high inflation and a general slowdown have led to sluggish consumer demand. “Around 30% of respondents cited an overall economic slowdown as the main cause behind sales expectations staying lower than last year. Meanwhile, around 16% of respondents feel that lower pricing might aid sales,” it said.

Retailers typically spruce up offerings and increase advertising spends between October and December as India celebrates various festivals. The association’s observations come as companies are pin their hopes on demand improving in the remainder of the festive season.

“Nearly 49% of respondents feel that kid’s wear will lead the way in sales. This was followed by 36% who cited women’s wear and 12% who cited men’s wear as the clothing category that would perform best. Also, tier-2 and tier-3 cities are expected to outshine metros in clothing sales, with around 80% of respondents voting in their favour,” the survey found.

Despite some positive sentiment over the past three or four days, there remains a widespread sense of pessimism among CMAI members, said Rahul Mehta, chief mentor, CMAI.

“This aligns with the broader slowdown experienced in the domestic garment sector during the last four to five months. Nevertheless, we anticipate a market upswing after Diwali, considering the extended wedding season that lies ahead. As many as 60% of respondents felt offline stores would do better during the festive season while 40% felt online portals would perform better,” Mehta added.