With a population of over 110 million people and a rapidly growing middle class, consumer spending power is also increasing. This has led to a surge in demand for fashionable clothes and accessories and opportunities for businesses to thrive. 

Highlights of the E-commerce Apparel Industry in the Philippines: Opportunities & Trends

• The Apparel market is on the rise, with a projected revenue of US$779.10 million in 2023.
• Robust growth is anticipated, with an annual growth rate of 15.01% between 2023 and 2027. This will lead to a market volume of US$1,363 million by 2027.
• While the Philippines is seeing growth, China dominates the market with a staggering revenue projection of US$131,300 million in 2023.
• The number of users in the Apparel market in the Philippines is set to increase, reaching an estimated 34.2 million users by 2027.
• User penetration in the market is growing steadily, starting at 22.4% in 2023, and is forecasted to reach 27.5% by 2027.
• The average spending of each user, or ARPU, in the market is projected to be US$29.62.

However, along with these opportunities comes a unique set of challenges for the retailers operating in this region. So, let’s explore the challenges, opportunities, and solutions of the Philippines’ booming fashion industry. 

Overcoming E-commerce Apparel Industry Challenges with Solutions in the Philippines

The apparel industry is known for its ability to adapt to ever-evolving styles and trends. However, this state of flux brings notable challenges, including the following:

1. Real-time Inventory Management

In the fast-paced fashion industry, managing inventory is crucial. The task of mapping an extensive SKU base with orders on various marketplaces like Lazada, Zalora, Shopee, etc., can become tedious and error-prone if handled manually. For Example, manual mapping can sometimes lead to the same products being marked with different SKUs, causing them to be counted as separate items.

Adding to the complexity, the fast-changing trends in the apparel industry lead to short product life cycles. Fluctuating demand and rapidly changing fashion trends can lead to overstocking or stockouts, both of which can be costly for retailers. 

Solution – Implementing Barcode Inventory Management System

Retailers should implement a robust Barcode Inventory Management System to tackle these challenges. This system enables real-time tracking and accurate monitoring of inventory levels. The centralized SKU mapping enables retailers to streamline operations and ensure consistent product identification across various sales channels. 

With precise insights, retailers can optimize stock levels, minimize stockouts, and enhance order processing efficiency. Brands like Luxurious Cravings have successfully leveraged these automated systems to stay ahead in the competitive market.

Moreover, these automated systems not only streamline inventory control but also provide comprehensive reports. These reports offer valuable data and analytics, empowering retailers to make informed decisions and anticipate future demands. 

Given the rapidly changing pace of the fashion industry, these reports provide sellers with the latest trends. They provide insights into the best-selling and lowest-performing SKUs, allowing retailers to form their strategies effectively. 

2. Order Processing and Fulfillment

Retailers in the Philippines face significant challenges with processing and delivering orders. Businesses need to handle this task well to uplift the post-purchase experience of their customers. The region has different kinds of areas, some with modern facilities and others with fewer resources. 

Also, the presence of islands within the Republic of the Philippines adds a distinctive layer of complexity to the logistical landscape. The country consists of more than 7000 islands, and shipping and returning goods between these islands require a refined transportation and coordination strategy to guarantee timely and undamaged deliveries. This can make it tricky to process and deliver orders on time, especially in remote areas.

Solution – Automating the Entire Order Processing Workflow

Implementing a robust order management system can centralize and streamline the entire order processing workflow, from order placement to delivery. Retailers can consider investing in systems with solid integrations with 3PL (Third-Party Logistics) providers. These established logistics companies have expertise in navigating the region’s diverse landscapes, resulting in timely deliveries and higher order fulfillment rates. 

Leading brands like Ellana Cosmetics have successfully achieved faster, better, and more efficient deliveries through automation. The brand achieved an impressive 99.99% order fulfillment rate by implementing a robust e-commerce order management system. 

3. Product Returns and Reverse Logistics

Returns management is crucial in establishing a solid brand reputation, especially in the apparel industry with high return rates. A cumbersome and slow returns process can result in customer dissatisfaction and negatively impact brand reputation. 

Businesses must also be vigilant about fraudulent returns, where some customers may abuse the process for personal gain. For example, some individuals may return used or damaged items, claiming they are faulty, in order to receive refunds or replacements.

Solution – Using a Robust Returns Management System

To address these challenges, it’s essential to implement an efficient returns management system that facilitates smooth and quick handling of product returns, ensuring a positive post-purchase experience for customers. 

The system should include features like easy return initiation, seamless reverse pickup, thorough quality checks, inventory reconciliation, refund processing, and more. This can help retailers minimize return processing time, reduce operational costs, and maintain a positive brand image. 

4. Changing Landscape of the Retail Industry

One of the biggest challenges facing fashion retailers is the industry’s changing landscape. With advancements in technology and shifting consumer preferences, traditional brick-and-mortar stores are facing intense competition from online retailers. 

D2C brands are investing heavily in technology to build a strong supply chain ecosystem and drive traffic to their brand websites. The convenience and accessibility offered by online shopping have revolutionized how people shop for clothing and accessories. As a result, many traditional retailers have had to rethink their strategies and find ways to integrate online platforms into their business models.

On the other hand, digital-first brands, which initially started as online-only entities, have recognized the value of offline presence and are expanding into physical retail spaces. This convergence of online and offline retail indicates a shift towards a more holistic approach to retailing, where brands are exploring multiple ways to connect with consumers. 

Solution – Building a Strong Omnichannel Presence

In this ever-changing landscape, it has become essential for retailers to build a solid online presence. However, it is equally important to maintain a physical store as well. Adopting an omnichannel approach allows retailers to seamlessly integrate their online and offline channels, providing customers with a cohesive shopping experience across all touchpoints. For instance, with an omnichannel strategy, customers can order online and return offline and vice-versa, or they can choose products online and try them in person.

For this, businesses need to have a user-friendly website or mobile app that offers convenient browsing and purchasing options while ensuring that brick-and-mortar stores are visually appealing and provide exceptional customer service. By creating a seamless online and offline shopping experience, retailers can attract and retain customers in an increasingly competitive market. 

Leading omni brands like Edamama have successfully implemented an impactful e-commerce strategy to strengthen their presence in the market.

Let’s Make Fashion Business Easy in the Philippines!

While there are challenges facing the fashion retail industry in the Philippines, there are also immense opportunities for growth and success. Retailers can navigate the evolving landscape by staying agile, embracing technology advancements, and understanding consumer needs. As the Philippines continues to be a hotbed for fashion innovation and consumption, it is crucial for retailers to stay ahead of trends and constantly innovate to stay relevant in this dynamic market. 

Frequently Asked Questions (FAQs)

1. What factors affect the fashion and retail industry in the Philippines?

Factors affecting the fashion and retail industry in the Philippines are the shifts in consumer preferences, the economic fluctuations of the country, the changing landscape of the e-commerce industry, the growing online penetration, increased competition, and the ever-changing supply chain dynamics.

2. What is the weakness of the fashion industry in the Philippines?

The weakness of the fashion industry in the Philippines lies in various factors, such as its reliance on imported raw materials, limited infrastructure, and inconsistent regulatory frameworks across different regions in the country.

3. What are the popular fashion trends in the Philippines?

Fashion trends in the Philippines can vary from city to city, but some popular trends in the region include a fusion of traditional and modern elements, vibrant colors, intricate patterns, and a mix of Western and local fashion influences. Moreover, streetwear, sustainable fashion, and athleisure are gaining popularity among the younger demographics.

Explore our platforms:

1. Integrated logistics management system
2. Automated payment reconciliation system

Related read on E-commerce in Philippines –

• Top E-commerce Marketplaces for Businesses in the Philippines
• Maximizing Efficiency in Manual Inventory Management: Challenges and Solutions in the Philippines
• E-commerce Fulfillment in the Philippines: How to Boost Operational Efficiency and Profitability?
• E-commerce Logistics Management: How can you overcome Supply Chain Challenges in the Philippines?
• How to Sell on Lazada Marketplace in Southeast Asia
• How Edamama managed business operations across 1,000+ brands with 99.99%+ fulfillment rate?
• How PayO Asia achieved 10X growth in sales, simplifying their operations across 43 Facilities?
• How Philippines-based beauty brand, Ellana Cosmetics achieves 99.99% order fulfillment rates?

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E-commerce Apparel Industry in India

According to the Indian E-commerce Trends Report of Unicommerce, the online fashion and accessories industry in India witnessed an order volume growth of 20.9%, becoming the segment with the highest order volumes in FY22 as compared to the previous financial year. 

The apparel industry is known for its ability to adapt to change, with new trends and styles emerging regularly. Change has always been the wardrobe essential of this industry, happening almost every quarter of each year. This constant need for adaptation also brings its own set of challenges for the industry. 

Keeping up with the fast-paced nature of the industry can be difficult for brands and retailers, as they need to stay ahead of the latest trends and styles while also managing costs and maintaining profitability. With a rotational shift happening in the industry, Unicommerce decided to go ahead and curate e-commerce fashion trends, challenges, opportunities, and solutions that can help you manage and schedule your business action plan in 2023!

Let’s look at the growing trends, challenges, opportunities & solutions in the apparel industry.

Apparel Industry Trends

The apparel industry is constantly evolving, with new trends emerging each season. Here are a few of the key trends to watch in the industry in the coming year:

Trend #1: Fashioning the Future With Sustainability

Consumers are becoming increasingly conscious of the environmental impact of the clothing they purchase. As a result, sustainable fashion, also known as eco-fashion or ethical fashion, is becoming an increasingly important trend in the industry. 

Brands are increasingly using organic cotton, bamboo, and linen, which are grown without synthetic pesticides and fertilizers. Recycled materials, such as recycled polyester and nylon, are also becoming more popular as they help to reduce waste and pollution. 

Another key aspect of sustainable fashion is the use of sustainable production methods. This includes reducing water and energy consumption, using low-impact dyes, and implementing fair labor practices. As consumers become more conscious about their purchasing power and environmental impact, it is expected that sustainable fashion production will become increasingly important.

Trend #2: Revolutionizing Fashion With Athleisure

Athleisure, a trend that combines athletic and leisure wear, has been revolutionizing the fashion industry in recent years. This trend has been driven by the increasing popularity of comfortable, functional clothing worn both in and out of the gym.

As per Statista:The sports and athleisure retail market in India was valued at 158 billion Indian rupees in financial year 2021, and estimated to grow to 402 billion rupees by financial year 2025. Footwear made up the largest chunk of the market during the measured time period, amounting to about 90 billion rupees in 2021, and projected to grow by 21 percent by 2025.

Brands are now offering a wider range of options, from performance-focused gear to more casual and street-style pieces. This has led to the creation of new styles, such as the fusion of athletic wear with formal wear, and has opened up new possibilities for fashion designers.

Another aspect of athleisure is the use of technology, such as moisture-wicking fabric and UV protection, to enhance the functionality of athletic wear. Apparel businesses are investing in research and development to create new fabrics and technologies that can improve the performance of athletic wear.  

Overall, athleisure has been a game-changer in the fashion industry, with its versatility and functionality driving the demand for athletic wear. As the trend continues to evolve, it’s likely that we’ll see more innovations in the design, materials, and technology of athletic wear, making it even more appealing to consumers.

Trend #3: Market Growth Headed by Women and Kids Wear

The shift in lifestyle and priorities of modern women is leading to a greater focus on self-awareness and appearance, driving growth in the women’s apparel market. As they are becoming more conscious of their fashion choices, the demand for trendy and fashionable clothing is increasing.

The market for kids’ wear is driven by factors such as the increasing number of working mothers and the growing trend of parents investing in high-quality clothing for their children. According to a recent report by Wazir Advisors, India’s kids’ wear market is expected to reach INR 1,23,000 Crores by 2023, growing at a CAGR of 13%. 

In terms of product segments, the market for women’s wear is segmented into ethnic wear, western wear, and lingerie. Western wear is expected to be the most lucrative segment in the women’s wear market, driven by the increasing demand for casual and formal wear. With the growth of e-commerce, the market is expected to continue growing, providing opportunities for fashion retailers and manufacturers.

Trend #4: Style and Functionality are Key to Modern Consumers’ Wardrobe

When it comes to fashion, modern consumers are looking for clothing that not only looks good but also serves a purpose. The combination of style and functionality is becoming increasingly important in today’s wardrobe. Consumers are looking for comfortable, durable, and versatile clothing that can be worn for different occasions and meet different needs.

Functionality is especially important for activewear and athleisure, as consumers seek clothing that can keep up with their busy lifestyles and support their physical activities. Fashion, on the other hand, fashion is essential in creating a unique and personal style. Consumers are looking for clothing that reflects their personal tastes and preferences and makes them stand out. 

Brands are responding to this by offering a wide range of options, from classic and timeless styles to trendy and fashion-forward pieces. As lifestyles and fashion preferences evolve, brands and retailers that understand and respond to these needs will be well-positioned to succeed in the market.

Trend #5: The Growing Era of Digital First Brands

The apparel industry is currently experiencing a shift towards digital-first brands. These brands prioritize online sales and digital marketing over traditional brick-and-mortar retail and are utilizing technology to create a seamless and personalized shopping experience for consumers.

One of the biggest advantages of digital-first brands is their ability to reach a global audience through e-commerce. These brands can sell directly to consumers, bypassing traditional retail channels and cutting down on costs. This allows them to offer a wide range of products at competitive prices.

With the advancement in technology and more people turning to the internet for fashion inspiration and shopping, digital-first brands will have a significant opportunity to thrive in the industry.

Opportunities in the Apparel Industry

The Indian textile and apparel market has significant growth potential, with the industry projected to reach $190 billion by 2025-26. To reach this target and establish a sustainable textile industry, Indian businesses must take advantage of government support schemes, meet global buyer sustainability demands, and prioritize supply chain traceability.

Government policies and regulations have directed their focus on this industry. Mr. Piyush Goyal, the Minister of Textiles, announced that the Indian government plans to create 75 textile hubs across the country. Not to mention the government has also reduced the custom duty rates on caprolactam, nylon chips, and nylon fiber and yarn to 5%. These regulations have created plenty of opportunities for the Textile and Apparel Industry in the e-commerce sector.

With lined-up opportunities, there come several challenges for simplified apparel e-commerce.

Current & Future Challenges and Problems in the Apparel Industry

The new trends, changing consumer habits, and market shifts have shed light on the new challenges the e-commerce apparel industry is facing in 2023. 

• Difficulty in managing customized order allocation and inventory sync
• Unable to align warehouse operations manually 
• The impact of COVID-19 and the need to adapt to the changing retail landscape and consumer behavior
• Inability to manage deliveries, leading to a higher % of Customer Initiated Returns (CIR)
• Hard to align multiple sales channels and offline stores alongside 
• Back-breaking for e-commerce platforms to manage multiple vendors
• Untimely and inefficient delivery of products
• No stock rotation leading to outdated stock
• The increased cost of Reverse Logistics
• The need to navigate the complex and ever-changing regulations and compliance requirements
• Poor management of returns and cancellations
• Difficulty in predicting and managing demand, inventory, and logistics

Evolving Practices as a Solution to Challenges in the Apparel Industry

Starting up your own fashion e-commerce business has never been easier, especially post the pandemic. Right from managing the inventory and warehouse operations to timely updating the digital attire of an e-commerce store, the aspects are many. But with the advancement of technology, it has become important to adopt some upcoming practices, aligning the sales with your operations.

Following are some of the upcoming e-commerce practices that act as a solution to the challenges you are witnessing during these tough times.

• Delivering Omnichannel Experiences

It has become imperative to provide customers with a seamless experience at all touchpoints. Integrating and aligning offline and online channels together helps both businesses and customers develop better relationships. Omnichannel retail offers unhindered shopping experiences to customers and helps keep the inventory and stock levels uniform. With its advanced Omnichannel solution, Unicommerce has enabled effortless business operations & tremendous growth for Iconic Fashion India. 

• Serving Directly With the D2C Business Model

D2C is quite a recent approach wherein brands deal with customers directly, eliminating intermediaries. While many new brands are adopting this strategy, some established brands are switching from traditional business models to D2C models. According to Unicommerce’s e-commerce Q3 2022 trends report, the e-commerce industry witnessed robust order volume growth of 48.3% through the brand websites, while marketplaces recorded a 21.5% order volume growth.

But the question is, what makes it so different that almost all the new brands are swearing by this approach? Well, the biggest advantage for a D2C brand is that they can shorten the time to sell the products, giving their customers a better price while earning a higher margin.  Direct to Consumer (D2C) e-commerce allows the original brand voice to come in front, giving brands better engagement with their customers. Moreover, the new-age solutions of Unicommerce are made specifically for D2C brands like Enamor, Chumbak, etc., to scale on higher revenues.

Why Unicommerce?

Unicommerce – Solutions to problems in the Textile and Garment industry

Unicommerce, the #1 cloud-based e-commerce solution, is focused on changing the face of Indian Fashion retail.  It is on a mission to automate the largely scattered apparel industry to make it technology-driven. Its Order and Warehouse Management solutions help to automate clients’ supply chain operations for both online and offline businesses (B2B and B2C). Moreover, Unicommerce comes with 200+ integrations; Cart, Marketplaces, Logistics, ERP, and POS systems to manage the needs of Wholesalers, Distributors, Retail Chains, Individual Store owners, and e-commerce sellers to increase revenue and save operations costs.

Unicommerce’s robust supply chain technology solutions have resulted in exponential business growth, & improved unit economics for over 20,000+ global marketplaces & brands across India, the Middle East, the Philippines, and Southeast Asia. Some of the notable clientele of Unicommerce in the fashion and apparel industry include TCNS Clothing Co. LTD. (W, Aurelia, Elleven), Oryvo, Brand Studio, Bestseller (Vero Moda, Jack & Jones, Only), Being Human, GAP, GANT, Crocs, etc. 

Below is a quick brief about Unicommerce’s offerings; click the links to know more in detail.

• Advanced Warehouse Management – Unicommerce helps track inventory counts and manage dispatched and allocated orders, making the flow of operations simpler and more efficient. Moreover, you get a real-time update on the entire warehouse operations across multiple locations. 
• Omnichannel Solution – Unicommerce offers an Omnichannel Solution so that you can route online orders to the nearest offline store. 
• ERP/ POS management – All the current ERP/POS systems (Tally, Base, Oracle, Navision, SAP, etc.)  get effortlessly integrated into our omnichannel software product
• Bundle Management – Unicommerce has a Bundle Management feature that lets you create combo packs while updating combo product SKUs in real-time across multiple sales channels. 
• Logistics Integration – Unicommerce helps brands reduce cancellations and returns as it automates the whole process, ensuring the right product gets shipped to the customers
• Unified Vendor Panels – With the Vendor Management solution, e-commerce fashion retailers can seamlessly manage suppliers via centralized login.
• Centralized Inventory Management – To enable more significant cost savings, the efficient Inventory Management system restricts bad stock while minimizing the risk of overselling.
• Accurate Report Analysis – Unicommerce lets you analyze and scrutinize your daily operations with its Dashboard segment. You can track the number of orders fulfilled, Sales achieved, Returns progressed, etc. 
• E-commerce Returns Management – Managing RTO and CIR are not difficult anymore. Unicommerce offers a comprehensive returns management solution through a centralized panel to manage returns across all sales channels, amplifying your overall sales profits. 
• Marketplace Integration – Having come pre-integrated with 40+ marketplaces, Unicommerce lets you sell efficiently across multiple sales channels such as Amazon, Myntra, Flipkart, etc. 
• Simplified Fulfillment – Unicommerce simplifies the process of fulfillment with its fastest and error-free order fulfillment feature.

To coincide, e-commerce brands in the fashion and apparel industry are rising. The Apparel industry is entering a phase where the opportunities are endless, provided the sector is getting constant assistance and support from the government. New and updated practices are required to address the rising challenges. However, online fashion brands must reorganize their business model to cater to evolving demands of the competitive business environment.

Explore our platforms:

• Logistics Tracking and Returns Management Platform
• Automate Reconciliation of Orders, Returns and Payments

Related read –

• FMCG Industry challenges in India
• Healthcare Industry: Trends, Challenges, Opportunities & Solutions
• What is Warehouse Management System?
• Logistics vs Supply Chain Management
• How is Batch Management Critical in Warehouse Operations?
• Top 7 Challenges of Order Management System in E-commerce
• Simplifying Receiving and Putaway Operations of Warehouse

Uncover Leading Brands Success with Unicommerce! –

• Mamaearth Attained 99.99% Order Fulfillment Rate
• Upscalio Achieved a 99%+ Order Fulfillment Rate with 100%+ Order Growth
• Dhani Healthcare Streamlined Operations Across 166 Facilities
• Urban Company Achieved 8X Growth in Sales Volume
• Plum Goodness Streamlined Inventory Operations with 69% Growth Rate in Sales
• Marico Achieved 100% Growth in Sales
• Bulbul Simplified Selling Across 200+ Vendors
• Chumbak Lifestyle Boost Sales Across 58+ Retail Stores
• TCNS Achieved 9X Growth in Sales
• Hamilton Housewares Attained 96%+ Pick Accuracy Rate

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