FW
For years, China has been the undisputed El Dorado for global fashion and luxury brands. A growing middle class, with its aspirations, desires and ever increasing purchasing power, makes the Chinese market a cornerstone of their global strategies. However, the market is evolving while a complete retreat is far from reality, there is a shift in approach due to realignments in consumer behavior, and emerging policy considerations.
The era of unfettered expansion
The past decade saw a gold rush of international brands establishing and expanding their presence across China. Flagship stores in cities like Shanghai and Beijing, while brands ventured into rapidly developing Tier II, III cities, eager to capture every segment of the booming luxury market. WealthBriefing stats show, while Tier I cities remain dominant, luxury spending in Tier II cities grew 22 per cent in 2024 . This growth was underpinned by several factors.
One major factor was China's remarkable economic growth that created a vast pool of affluent consumers with a penchant for luxury goods as status symbols and expressions of their newfound wealth. Also, the rapid adoption of digital technologies in China created unprecedented opportunities for brands to connect with consumers online through e-commerce platforms and social media. Chinese consumers, while embracing modernity, also developed a strong appreciation for the heritage and craftsmanship associated with established international luxury brands.
The winds of change
While China remains a critical market, several factors are now prompting global brands to re-evaluate their strategies, moving towards a more consolidated and strategic presence rather than relentless expansion. Topmost factor is China's economic growth has decelerated, accompanied by a real estate crisis and rising youth unemployment. As per Bain & Company, the Chinese mainland luxury market saw 18-20 per cent dip in 2024, reverting to 2020 levels. This has led to lower consumer confidence and a more cautious approach to discretionary spending, impacting the luxury market.
Meanwhile, the profile of the Chinese luxury consumer is evolving. Younger generations, particularly Gen Z, are displaying a preference for "quiet luxury" – subtle, high-quality items over logo-heavy designs. They also prioritize experiences, sustainability, and local brands that resonate with their cultural identity. And with the resurgence of international travel post-pandemic, a significant portion of Chinese luxury spending is shifting back to overseas markets due to favorable exchange rates and tax-free shopping. In the first half of 2024, almost 52 per cent of affluent Chinese consumers made luxury purchases abroad, a 16 per cent increase year-on-year.
Local Chinese luxury brands too are gaining ground, appealing to national pride and offering culturally relevant designs. These brands are increasingly seen as legitimate competitors by international players. While not a direct crackdown on luxury consumption, there's a growing emphasis on "common prosperity" and a subtle discouragement of excessive displays of wealth. This has led to a phenomenon known as "luxury shame," where affluent consumers are becoming more discreet in their purchases. Furthermore, evolving import policies and tariffs can influence pricing strategies and market access. Repeated price hikes by global brands in recent years have also led to increased price sensitivity among Chinese consumers, driving some to seek cheaper alternatives or make purchases abroad.
Consolidation, not retreat
The current trend indicates a move towards consolidation rather than a widespread retreat. Brands are focusing on:
• Optimizing existing footprint: Instead of aggressively opening new stores, brands are focusing on enhancing the performance of their existing boutiques, ensuring a premium and engaging customer experience. This might involve renovations, relocations to prime locations, or even selective closures of underperforming stores.
• Deepening digital engagement: Investing in sophisticated online platforms, engaging content on local social media like Douyin and Xiaohongshu, and leveraging livestreaming are crucial to reach and engage the digitally native Chinese consumer.
• Localization strategies: As per WealthBriefing 56 per cent of mainland Chinese consumers plan to buy more from Chinese luxury brands in 2025. Therefore, adapting product offerings and marketing campaigns to resonate with local tastes and cultural nuances is becoming increasingly important. This includes incorporating Chinese cultural elements in designs or collaborating with local influencers.
• Focusing on high-value customers: Brands are intensifying efforts to cultivate relationships with their most loyal and high-spending customers through personalized services and exclusive experiences.
• Channel optimization: Brands are carefully evaluating their distribution channels, including e-commerce, physical stores, and duty-free zones like Hainan, to align with evolving consumer preferences and spending patterns. Hainan's duty-free sales saw a 15 per cent year-on-year growth in 2024, highlighting its significance.
Impacts of reciprocal tariffs
Adding to the evolving dynamics of China's luxury market is the likely impact of recent reciprocal tariffs. The tit-for-tat escalation has introduced a new layer of complexity for global fashion and luxury brands operating in China.
As a result, US fashion and luxury brands importing goods into China now face significantly higher tariffs. This increased cost burden could lead to several outcomes for example, brands might be forced to raise prices for their products in China to maintain profit margins, potentially impacting demand and consumer willingness to purchase. If brands choose not to fully pass on the tariff costs to consumers, their profits in the Chinese market will dip.
Meanwhile, some US brands might explore shifting their supply chains to countries not subject to these tariffs, although this can be a complex and time-consuming process. Brands from countries without such high reciprocal tariffs might gain a competitive edge in the Chinese market due to potentially lower prices. European brands, for instance, could see an opportunity to capture a larger market share if US brands become more expensive.
The increased cost of imports might incentivize US brands to further invest in local production within China, reducing their reliance on imports and mitigating tariff impacts. This aligns with the broader trend of localization discussed earlier. Higher prices due to tariffs could further increase the shift towards "value-conscious" luxury consumption and increase the appeal of domestic Chinese brands or luxury goods purchased through overseas channels or the grey market, where prices might be more competitive.
Some reports suggest a concerning possibility of China easing restrictions on counterfeit goods, particularly those targeting American luxury brands, as a retaliatory measure. This could severely damage the brand equity and sales of US luxury companies in China.
Fashion for Good and Arvind unveil Future Forward Factories in India to cut textile emissions by 93%
Fashion for Good and Arvind Limited have launched the Future Forward Factories India initiative, a major push to reshape the future of sustainable textile production. This joint effort includes the development of an open-source blueprint for transforming Tier 2 textile manufacturing and the construction of an innovative physical facility in Gujarat. The project aims to demonstrate how cutting-edge technologies and practices can significantly reduce environmental impact while maintaining commercial viability.
Pioneering near net-zero textile production
At the heart of the initiative is a new physical facility by Arvind in Gujarat, focused on cotton woven and knit production. Designed to reduce greenhouse gas emissions by up to 93 per cent compared to conventional operations, the facility will integrate renewable energy, advanced processing technologies, and water-saving systems. It is projected to save approximately 60 litres of water per kilogram of fabric and operate as the textile industry’s first near net-zero production centre. The facility represents a significant investment in demonstrating the feasibility of sustainable manufacturing at scale, pending support through viability gap funding from industry stakeholders.
Open-source blueprint for industry-wide adoption
Alongside the physical facility, Future Forward Factories will deliver a modular, open-source blueprint for sustainable Tier 2 textile manufacturing. Tier 2 facilities, which account for over half of the industry’s carbon dioxide emissions and most of its water and chemical usage, are often overlooked in sustainability efforts. The blueprint addresses multiple environmental and social goals: integrating renewable energy, minimising water use, achieving ZDHC Level 3 chemical compliance, improving wastewater quality, and ensuring a Just Transition for workers as new technologies are introduced.
The blueprint will be publicly released in September 2025 and is designed for industry-wide adoption, offering a practical and scalable roadmap for factories seeking to transition to low-impact operations. It also explores the commercial feasibility of these operations by identifying subsidy, grant, and incentive mechanisms that can help close the viability gap.
Global collaboration to accelerate impact
The initiative is backed by catalytic funders including Laudes Foundation, Apparel Impact Institute, and IDH, and supported by on-ground partners such as Bluwin, Wazir Advisors, Grant Thornton Bharat, and Sattva Consulting. These organisations will collaborate to provide technical expertise and actionable insights to ensure the project’s success.
Launching at the Global Fashion Summit 2025, Future Forward Factories aims to catalyse systemic change across the industry. "We are taking decisive action to catalyse transformation through both knowledge-sharing and practical implementation," said Katrin Ley, Managing Director of Fashion for Good. “By targeting Tier 2 manufacturing, we can demonstrate real-world solutions that drive impact at scale.”
Arvind’s Vice Chairman Punit Lalbhai echoed the ambition, saying, "As a leader in the textile sector, Arvind is committed to pioneering sustainable manufacturing. This initiative will show how these technologies can be implemented at scale to address the industry’s biggest environmental challenges."
Future Forward Factories is also calling on other suppliers to collaborate in developing additional blueprints for diverse manufacturing setups, expanding the industry’s ability to scale sustainable practices globally.
The International Cotton Advisory Committee (ICAC) has maintained a steady global outlook for the 2025/26 cotton season, projecting production at 26 million tonnes and consumption at 25.7 million tonnes. Trade volumes are expected to rebound, reaching approximately 9.7 million tonnes a 2 per cent increase from the previous season driven by higher carryover stocks and anticipated mill demand.
The ICAC’s regional production forecasts show upward revisions for Brazil, the United States, and West Africa. However, these gains are likely to be offset by a slight reduction in China’s output. Despite the decrease, China is still expected to lead global production with 6.3 million tonnes in 2025/26, following a record yield of 2,257 kg/ha in the current season.
While supply remains stable, global cotton consumption continues to face pressure due to growing concerns over tariffs, regulatory uncertainty, and increasing competition from alternative fibres. The cotton trade outlook, though positive, may be influenced by geopolitical trade tensions and evolving tariff structures, the ICAC cautioned.
Price forecasts from the ICAC Secretariat place the average A Index for 2024/25 at 81 cents per pound. For the upcoming 2025/26 season, preliminary estimates suggest a wide price range between 56 and 95 cents per pound, with a midpoint forecast of 73 cents. These projections are based on current market fundamentals and were provided by Lorena Ruiz, ICAC’s Economist.
The ICAC continues to monitor developments across production, consumption, and trade that may affect cotton market dynamics heading into 2026.
The Portuguese Textile and Apparel Association (ATP) is spotlighting Portugal’s textile industry at Expo 2025 Osaka through an immersive installation titled Textile Live - Draping with Sustainable Materials, Made in Portugal, featured at the Portugal Pavilion under the theme Ocean, The Blue Dialogue.
From 12 to 15 June, the installation will present live draping performances by 15 young Japanese fashion students and one Portuguese designer using sustainable materials produced in Portugal. These daily sessions, held in the Pavilion’s Multiuse Room, will showcase fabrics rooted in circularity and environmental stewardship.
In collaboration with top Japanese fashion institutions - Osaka Institute of Fashion, Marronnier College of Fashion Design, and Kobe Bunka Fashion College, the event merges art, craftsmanship, and sustainable innovation. Draping will be done on busts crafted from eco-friendly materials, symbolizing the harmony between creativity and environmental responsibility.
Curated by Paulo Gomes, the installation features textile innovations from Portugal, including naturally sourced wool and linen, bio-based fibers derived from food by-products, recycled polyester from PET waste, seaweed-based finishes, and low-impact natural dyes.
Visitors can also explore a photographic exhibition featuring iconic Portuguese models, a video outlining sustainable production processes, and a creative display of Marias Paperdolls by artist Claudia Oliveira. These elements together highlight the heritage and forward-looking ethos of Portugal’s textile industry.
The initiative is supported by leading Portuguese textile companies such as Albano Morgado, Burel Factory, Lemar, Positive Materials, and Trimalhas, along with ATP’s international partners and sponsors including Aquitex and Mind.pt.
Through this high-impact presence at Expo 2025, ATP aims to reaffirm Portugal’s role as a leader in sustainable textiles and circular economy practices, presenting Portuguese-made textiles as both an artistic medium and a solution for a better future.
The International Cotton Advisory Committee (ICAC) has named Charudatta Mayee as the 2025 ICAC Cotton Researcher of the Year. The announcement was made by Keshav Kranthi, ICAC’s Chief Scientist and a past recipient of the same honor.
Mayee currently serves as President of both the Indian Society for Cotton Improvement and the South Asia Biotech Center. A distinguished plant pathologist and biotechnology expert, he played a central role in India’s Bt cotton revolution, guiding biosafety assessments and regulatory approvals in his role as Co-Chair of the Genetic Engineering Appraisal Committee.
Each year, ICAC confers this prestigious award which includes a certificate, shield, and US $1,000 honorarium on a globally recognized expert in cotton science. Mayee was selected by an international jury of five eminent scientists from different countries.
Spanning over five decades, Mayee’s career has earned him numerous awards, including the Alexander von Humboldt Fellowship and national honors like the Vasantrao Naik Krishi Award, ICAR Outstanding Team Research Award, and multiple lifetime achievement accolades.
Beyond academic and policy leadership, Mayee continues to promote farmer-centric innovations such as high density planting systems (HDPS) and sustainable pest management solutions. Through organizations like Agrovision Foundation and the South Asia Biotech Center, he remains actively engaged in ground-level fieldwork and farmer welfare.
His contributions have been instrumental in bridging science and policy while improving the livelihoods of millions of smallholder cotton farmers across India.
A textile company based in Tamil Nadu, India, Loyal Textiles Mill has initiated a major restructuring of its operations by focusing on high-value technical textile garments, a segment experiencing strong and consistent demand. Technical textiles are fabrics engineered for functional, non-aesthetic purposes.
This strategic pivot comes as the company has faced significant losses due to a prolonged global slowdown in demand, which led to underutilized production capacities. This situation negatively impacted Loyal Textiles' overall liquidity, stated Valli M Ramaswami, Chairperson and Wholetime Director in the latest earnings report.
To address these challenges, the company has implemented various cost-control measures and productivity-enhancement initiatives. These efforts aim to reduce operational costs, streamline processes, and boost both efficiency and capacity utilization. Additionally, Loyal Textiles plans to monetize non-core assets to generate much-needed liquidity and support its operational cash flows. The management expressed confidence that these ongoing actions will help the company achieve operational profitability in the upcoming year.
In a move to further strengthen its financial position, Loyal Textiles entered into an agreement in March to sell a portion of its windmill units through Anuvento Renewables. The company has finalized the sale of 25 windmill units to various buyers for Rs 74 crore. This sale is a key part of the company's strategy to reduce its debt burden and redirect focus towards its core textile businesses.
Loyal Textiles manufactures a range of products including yarn, woven fabric, knitted fabric, and technical clothing. The company operates manufacturing plants in several locations: Kovilpatti, Sattur, Cuddalore, and Sivagangai in Tamil Nadu, and Naidupeta in Andhra Pradesh.
In Q4, FY25, Loyal Textiles reported a net profit of Rs 39 crore and revenue of Rs 146 crore. This profit was significantly boosted by an exceptional item of Rs 63 crore.
However, for the full FY25, the company's net loss increased to Rs 51 crore from Rs 39 crore in the previous fiscal year. Revenue for FY25 saw a substantial decline of 27 per cent, falling to Rs 682 crore from Rs 939 crore in the prior year.
Renowned for blending innovation with environmental responsibility, materials science company, Pangaia has launched its most advanced plant-based activewear collection titled, 365 Seamless Activewear line.
Crafted from 100 per cent bio-based Evo Nylon by Fulgar and regen Bio Max elastane from Hyosung, this new collection establishes a new benchmark for sustainable performance apparel. Derived from renewable raw materials such as castor beans and industrial corn, Evo Nylon is celebrated for its lightweight nature, thermoregulating properties, and natural non-toxicity.
Complementing this, regen Bio Max elastane represents a next-generation stretch fiber, composed of 98 per cent renewable resources, including corn-based feedstock.
Pangaia is the first brand worldwide to integrate regen Bio Max elastane into a commercially available activewear range. This groundbreaking fiber delivers the essential elasticity, recovery, and durability expected from high-performance athletic wear, while boasting a significantly reduced environmental impact - specifically, a 27 per cent lower carbon footprint and 82 per cent less ozone depletion compared to conventional spandex.
Featuring a seamless construction, the 365 Seamless Activewear collection ensures a sculpted, second-skin fit. The initial release includes five essential styles: tank tops, zipped tops, leggings, and shorts. These pieces will be available in three nature-inspired colors: Black, Gaia Blue, and Dewy Rose, drawing their inspiration from the earth, sky, and blooming flora, respectively.
Each garment in the collection is treated with Pangaia’s exclusive Pprmint odor-control finish. Derived from natural peppermint oil, this treatment effectively neutralizes odor-causing bacteria, thereby extending the freshness of the garment and reducing the need for frequent washing.
Designed to compete directly with traditional synthetic performance wear without relying on fossil fuels, the 365 Seamless Activewear collection powerfully demonstrates that high technical functionality, comfort, and environmental responsibility can indeed coexist harmoniously.
India holds significant potential to meet global apparel demand, boasting a massive workforce and scale, as per Pawan Gupta, CEO & Founder, Fashinza.
Projected to reach $350 billion by 2030 with 10 per cent annual growth, the country’s textile and apparel sector is already attracting attention from international fashion houses looking to diversify their supply chains, says Gupta. India’s inherent strengths include a broad fiber base, skilled labor, and a fully integrated value chain - from cotton farming through spinning, weaving, dyeing, and garment manufacturing. This comprehensive domestic ecosystem reduces lead times and enhances supply chain control for brands, he adds.
However, the global apparel market is intensely competitive, with investment and sourcing decisions hinging on factors like tariff structures, cost stability, and clear policies. Despite India’s advantages, FDI into its textile sector has remained modest, totaling just $4.56 billion since April 2000. This figure doesn't fully reflect the country's capacity to absorb global capital, as investors prioritize operational certainty, Gupta opines.
High input duties on fabrics, accessories, and machinery imports directly impact the overall cost structure. Even a slight 2-3 per cent cost swing per piece can sway sourcing decisions for mid-to-high-end fashion labels, making countries with zero or low-duty imports more attractive. India’s tax and duty policies also need greater coherence; varying GST slabs for garment categories and slow export credit refund cycles affect working capital and planning.
While increased budget allocation for the textiles ministry and schemes like PLI and ATUFS are positive steps, effective execution is crucial. Global brands on tight retail schedules cannot afford delays in subsidy disbursements or approvals. India also needs substantial capacity expansion in mass-produced items like denim and bottoms, where competitors like Bangladesh hold a significant scale and cost advantage.
Potential trade agreements with the UK, EU, and Canada offer a clear cost advantage. Yet, these must be complemented by rationalized input tariffs to maximize benefits. Furthermore, despite strong production clusters, infrastructure - including consistent power, water, and last-mile connectivity - still lags. To attract long-term capital and realize its ambition as a global apparel hub, India must ensure predictable operational costs, manageable compliance burdens, and synchronized reforms across tariffs, trade facilitation, and production support. Otherwise, it risks losing out to competitors offering simpler business environments.
A strong potential for cooperation exists between India and Vietnam in the textile and apparel sector, said Bui Trung Thoung, Commercial Counselor and Head-Vietnam Trade Office in India during an online seminar on Vietnam-India cooperation in the textile industry.
Vietnam’s estimated yearly market of $1.2 billion can help the country meet India’s growing demand for premium polyester fabric, he added.
The partnership will also boost raw material supply between the two countries besides expanding their production and trade capacities, Thuong added further. He emphasized, despite employing 3 million people and being the world’s third largest textiles and apparels exporter, Vietnam continues to depend on China for its imports.
India’s competitive edge in the production of cotton, yarn, and textile machines, as well as preferential treatment under the ASEAN-India Free Trade Agreement (AIFTA), can help Vietnam reduce this dependency and save input costs by 22-27 per cent.
Rakesh Mehra, Chairman, Confederation of Indian Textile Industry (CITI), added, this initiative would help restructure the existing trade disputes and establish a flexible and valuable supply chain.
Rajesh Bhagat, Chairman, Worldex India, encouraged both the countries to enhance their presence through specialized exhibitions to help foster connections, contract agreements, and expand cooperation in machinery, technology, and supply chain development.
In the escalating global focus on combating climate change, businesses are under pressure to account for their carbon footprint. While much attention has been given to direct emissions from company-owned assets (Scope 1), and indirect emissions from purchased energy (Scope 2), a more significant and complex challenge lies in Scope 3 emissions. These emissions, often constituting almost 70-90 per cent of a company's total footprint, originating from sources a company doesn't directly control, such as suppliers, vendors, transportation, and even product usage.
All about Scope 3 and its complexities
Scope 3 emission covers a wide range of indirect emissions that occur both upstream and downstream in a company's value chain. This includes emissions from business travel, employee commuting, transport and distribution, waste disposal, purchased goods and services, franchises and leased assets, and the use of sold products. Essentially, it's the emissions linked to everything a company buys and sells, and how those products are used and disposed of.
Table: General categorization of Scope 3 emissions
|
Upstream emissions |
Downstream emissions |
|
Purchased goods and services |
Use of sold products |
|
Capital goods |
End-of-life treatment of sold products |
|
Fuel and energy-related activities |
Downstream transportation and distribution |
|
Upstream transportation and distribution |
Franchises |
|
Waste generated in operations |
Leased assets |
|
Business travel |
Investments |
|
Employee commuting |
|
|
Leased assets |
The primary reason Scope 3 is so challenging is the lack of direct control. Unlike Scope 1 and 2, which a company can manage through operational efficiencies and energy choices, Scope 3 involves a web of external factors. This complexity arises from multiple suppliers, varying customer usage behavior, numerous logistics partners, and outsourced activities. Gathering reliable data across these diverse sources is a monumental task, making it difficult for companies to get a complete and accurate picture of their Scope 3 footprint.
Scope 3 in the textile & apparel industry
The textile and apparel industry showcases the challenges and significance of Scope 3 emissions.
Purchased goods and services: The emissions from raw material production (cotton farming, synthetic fiber manufacturing), textile processing (dyeing, finishing), and component manufacturing (buttons, zippers) constitute a substantial portion of Scope 3 emissions. For example, a major fashion brand working with thousands of suppliers across the globe faces the complex task of gathering emissions data from each tier of its supply chain. Initiatives to promote sustainable cotton farming or the use of recycled materials directly address these Scope 3 emissions.
Transportation and distribution: The global nature of the industry, involving the movement of raw materials, intermediate products, and finished goods, leads to significant emissions from shipping, air freight, and trucking. A company optimizing its logistics by consolidating shipments, using more fuel-efficient transport, and exploring localized production can reduce emissions within this category.
Use of sold oroducts: Consumer behavior, such as washing and drying clothes, contributes to downstream emissions, mainly through energy consumption. In fact, brands promoting energy-efficient washing instructions or designing clothes that require less frequent washing are taking steps to address emissions associated with the use of their products.
End-of-life treatment of sold products: The disposal of textiles in landfills or through incineration generates emissions. Therefore, companies implementing take-back programs, designing for recyclability, or utilizing biodegradable materials aim to minimize emissions at the end of the product lifecycle.
The imperative of action
Despite the difficulties, ignoring Scope 3 is no longer a viable option. Stakeholders, including investors, customers, and regulators, are increasingly scrutinizing companies' environmental impact. Regulations, such as the EU's Corporate Sustainability Reporting Directive (CSRD), are expanding requirements for emissions reporting, pushing companies to enhance their transparency. Transparency in Scope 3 emissions is becoming essential for maintaining investor trust and ensuring global compliance.
Tackling Scope 3 requires a shift in mindset and a strategic approach. Companies need to engage deeply with their value chains, fostering collaboration with suppliers and partners to gather data and implement emissions reduction strategies. This may involve:
Mapping the value chain: This involves identifying important sources of Scope 3 emissions.
Data collection and management: Establishing systems to collect and manage emissions data from various sources.
Supplier engagement: Working with suppliers to improve their emissions performance.
Product lifecycle assessment: Evaluating the emissions associated with products throughout their lifecycle.
The bottomline is addressing Scope 3 emissions is not just an environmental imperative but also a business necessity. Companies that proactively manage their Scope 3 emissions will be better positioned to mitigate risks, enhance their reputation, and create a more sustainable future. As the regulatory landscape evolves and stakeholder expectations rise, understanding and tackling Scope 3 emissions will be crucial for long-term success.
