However, once in a while black swan events like the Covid -19 pandemic render our preparations useless. Covid drastically changed our world in a very short period. Two years after the pandemic emerged, the world has undergone a massive realignment. The world we live in has altered on global national as well as local levels.

As the pandemic hit, the speculations over the New Normal began. While the entire journey is not over yet, the ensuing timespan has given us enough insights into the changed world and we are in a position to analyse the New Normal. Every country had their unique journey during these years. India, too, had its share of hardships, learnings, adaptations and evolution.

Work from home became normal and digital payments grew at an unprecedented pace. Now that the effect of the pandemic has waned off to a great extent, many economic activities have gone back to pre-pandemic levels. However, several behavioural changes adopted during these two years are there to stay. In addition to the effects of the pandemic, new geo-political realities are shaping consumer behaviour in 2023.

Coupled with the post-pandemic realities of the global supply chain, the Ukraine- Russian conflict has created an environment of volatility, uncertainty and fragility. Despite this gloom and doom, India remains a bright spot in the Global Economy, as ascertained by IMF and other multilateral institutions. As per statista, the Indian apparel market revenue may approach USD 96.47 billion in 2023, and the market is expected to grow annually by 3.34 per cent (CAGR 2023-2027).

Let us try to uncover the shifts happening around us and how these shifts are likely to drive our behaviour as consumers and the trajectory of the Indian Fashion markets.

We begin with the major drivers that are likely to affect the Changes. We then explore the dominant consumer sentiments, and finally, we arrive at different consumer segments that are taking shape as a response to the market conditions and consumer sentiments.

Drivers of Change

The India Story

The Indian economy has shown great resilience in the face of a global slowdown. Post-pandemic liquidity doles by governments around the globe to push demands resulted in a massive inflation and cost of living crisis. However, a targeted support approach by the Indian government with careful and calibrated policies has been able to control inflation after a short period of relatively higher inflation. India also bucks the slowdown trend amidst the global headwinds. Today, the India story is being recognised around the world with success on multiple fronts. Given the vast extent and diversity, the success of UPI and CoWIN (online Platform for the Covid vaccination programme) has given a sense of renewed confidence in India.

While Indian neighbours like Srilanka and Pakistan are reeling from the balance of payment crisis and energy deficiency, India’s foreign policy has been able to ensure energy security and a healthy economic growth rate.

In addition, a largely China-centric supply chain during the pandemic got disrupted leading to the emergence of the China +1 policy. Notably, India will benefit from the trend. India, however, needs to rapidly capture the small window of opportunity, as competition from Vietnam, Bangladesh, India, Ethiopia, Egypt and other manufacturing locations remains high.

Moreover, the huge domestic market of India empowers India with not just immense opportunities but a great degree of resilience too.

Domestic market potential; from Make in India to Make for India

With 467 million users on YouTube, India today offers more eyeballs than the next two countries with the highest user combined (i.e. USA & Brazil, 246 & 142 million respectively). With a 1.4 billion strong population, India today is the world’s biggest market in terms of headcounts. With a continuously growing middle class, India is arguably one of the biggest markets in the world.

Long story short, it is not just us who are working for ‘Make in India' (for the World as well as for India), the world is equally interested in ‘Make for India’ (outside as well as inside India).

Last mile penetration and online acceptability

With the option (or even necessity) of working from home during the pandemic, a lot of working professionals moved to their tier 2 and tier 3 cities, towns and even villages. This helped their parents and other family members to adopt online shopping and get comfortable with digital transactions. Increased demand also accelerated the last-mile connectivity which was already growing at a considerable pace.

As per the Unicommerce report, non-metro buyers dominated the e-commerce market. The share of tier 3 cities grew to 41.5 percent in 2022 from 34.2 percent in 2021. Tier 2 cities grew to 21.4 percent in 2022 from 19.4 percent in 2021 while tier 1 cities lost the market share to 37.1 percent in 2022 and 46.4 percent in 2021.

As per Unicommerce Indian E-commerce Trends Report, the online fashion and accessory segment in India grew by 20.9 percent in terms of volume. It also became the segment with the highest order volume in FY22 vis-a-vis the previous financial year.

However, the apparel and footwear in the fashion segment also accounted for the highest returns with more than 20 percent of the orders returned.

Repurposing Digital Marketing

As digital commerce grew, the competition for attention also grew. Consequently, customer targeting via social media, google Ads and other channels became less effective and more costly. Direct-to-Consumer (D2C) brands today are facing a massive reduction in profits.

Brands are now looking to deploy creative campaigns, build brand loyalty and explore new channels like Retail Media networks and metaverse to achieve better Return on investment (ROI) on their marketing spend. The emphasis on first-party data is also increasing to develop deeper customer relationships.

Polarization of the Casual-Formal Segment

Riding on its versatility and functionality, the athleisure trend has come a long way. Over time, we also saw multiple innovations in material, design and technology. We also saw how the athleisure and sports category captured a large portion of the casualwear category. Given the normalization of work-from-home and on-demand delivery services, the trend is here to stay and evolve. Even though we are now practically out of Covid, a lot of our behavioural aspects will remain intact. This means good times are ahead for athleisure.

On the other hand, however, the importance of formal attire for special occasions has increased manifold. While offices and outdoors generally shift towards more casual clothing, special occasions and weddings will see a rise in statement pieces. Weddings in India have always been a major life event entailing years of planning and dressing up a major highlight. Standing out has become even more important today – a boost in the occasion wear segment is imminent.

The effort to dress up will be largely based on trickle-down styles from Bollywood, cricketers, fashion shows, social media influencers and other celebrities with very minor personal customisations. This is understandable given the traditional lack of individualistic traits in Indian society.

Supply Chain Optimisation

Despite a relatively stable economy in India, the ripple effects of global economic turbulence will impact India. With a rise in inflation, the cost of production is bound to rise. This will force companies to either increase prices or cut their costs or try combination of both.

However, in a post Covid world, operational efficiency is not determined solely in terms of cost efficiency, but also in terms of resilience. Going forward, future-proofing will remain one of the major concerns for brands and businesses. To deal with the supply chain disruptions, textile businesses will try out alternative models of production like small batch production or even vertical integration. Brands might consider nearshoring and strategic partnerships with suppliers to ensure reliable supply. Meanwhile, production facilities will likely invest in automation and digitisation to improve the production process and cost structures.  

Gender Neutral 

The gender-neutral clothing that was once limited to fashion weeks, designer labels or small homegrown brands has now started making inroads into mass brands as well. Oversized unisex t-shirts and sweatshirts have been normalized especially by urban Gen-Z consumers. The segment is largely popular among the younger generation for whom gender identities are less static and, thereby, their clothing choices are not restricted by their gender identity.

Going forward, the category is likely to capture a larger market with varied silhouettes. As the market grows larger, it offers great scope for brands as it reduces the logistical and inventory-related challenges owing to the proliferation of the number of sizes and colours as well as separate categories for men and women.

Consumer Sentiments

Content Congestion: 

For the sake of context, consider this- 90 percent of the world's data has been created in the last 2 years (A per Next Tech). Moreover, the volume of data is likely to double every two years. So next time, you feel overwhelmed by the sensory overload due to digital content, don’t be too hard on yourself. You are hardly to blame.

Our attention spans have shrunk, and the repercussions of Content Congestion in our daily lives are becoming increasingly evident. The home confinement during the Covid lockdowns further aggravated our content consumption patterns. Today, there is an increasing sense of urgency to explore slow content. Content that is reassuring and reminds the users of the calm and composure of the good old days.          

Un-groundedness: 

Increasingly, several Indians are feeling the need to reconnect to their roots. The fast-paced world is challenging the physical, mental and emotional orientation of Indians. Faced with a lack of groundedness and the fragility of modern lifestyle, a section of Indians who have achieved material success have now started questioning their lifestyle choices.

They are ready to experiment with alternate and Indic ways of life. This extends to their food, home and lifestyle choices.

Stress & Burnout: 

Remote working led to blurring of the lines between the virtual and the physical worlds. It also gave rise to a multitasking culture. Despite the gruelling multitasking, there have been haircuts on salaries and mass layoffs. For the hustlers who gave it all to their professional lives, the uncertainty still looms over their heads. This induces anxiety and a sense that “nothing is enough”. Stress and Burnout have become frequent topics of conversation.

As per WHO study, 200 million plus Indians today suffer from some form of mental disorder. However, gradual awareness towards mental wellness has started in India. Urban Indians are increasingly searching for wellness and adopting therapy.

Awe

Summer Allen (UC Berkeley) in his white paper says- “Awe is a complex emotion that can be difficult to define. Feelings of awe can be positive or negative—unlike most other emotions—and can arise from a wide range of stimuli.”

In his paper, he also quotes psychologists Dacher Keltner and Jonathan Haidt who presented a “conceptual approach to awe.” In this 2003 paper, Keltner and Haidt suggested that awe experiences can be characterized by two phenomena: “perceived vastness” and a “need for accommodation.”

In essence, Awe lets us see beyond ourselves- as being part of something way greater than ourselves. In some sense, it can be seen as how a child is always filled with a sense of wonder and sometimes with fear. Nonetheless, she is approaching any new experience with a clean slate, without any prior baggage of knowledge or any lens of experience. Time and again throughout our history, when humans are faced with existential situations, awe helps us navigate through the rough waters.

Some recent research suggests that Awe increases empathy and reduces anxiety. Since this sentiment shifts the focus from the self to the larger world around us, a lot of people will depend on this emotion to move from a fragmented world to an integrated one.

Cohorts: 

With successive shocks ranging from Covid lockdowns to geopolitical tensions entailing political polarization and wars, to mass layoffs of employees, to the climate crisis, consumers today have seen unprecedented uncertainty in their lifetimes. All these have left consumers from various cohorts not just uncertain but disgruntled and disoriented as well. Beyond their respective problems, consumers today are united in their need to reorient themselves on various levels- individual, familial, cultural, national and global.

Reclaimers: 

Disillusioned by the excessive noise on various media platforms, the population is divided on a spectrum. Depending on their bent of mind, various subgroups are looking for anchors for their identity. The choice of direction is influenced by their childhood & upbringing, education and exposure while growing up and discourse in their work environments.

This cohort is ready to reclaim what they feel most close to their perceived or desirable identity. These range from people who identify with the dharmic traditions and Indic ways of life- to people who find solace in Hindustani poems, literature and shayaris and Sufi music - to people who identify with a traveller-explorer lifestyle.

There is a surge in the revival and construction of temples, indigenous style of farming and dairy farming to organic food products. There is an intensive discourse around keywords like decolonisation and Indic renaissance to reclaim the history of unsung Indian heroes.

Calm Creatures:

This cohort is redefining the meaning of success with a slightly laidback and slow lifestyle (not lazy though). This cohort is also a contributor to the great resignation trend. They are looking forward to content and products that they can use for a longer time. They value products that make logical and ethical sense to them.

They trust their close-knit community more than the market noise. This cohort is practical yet ethical, modern in thought but not critical of the tradition just because it is old. They evaluate products or practices on a case-to-case basis. This cohort does not believe in othering an idea or a group. This cohort gives a fair chance to new ideas but indulges cautiously. Transparency from the brand’s end is a big factor that affects its decision-making.

Vengers: 

Post Pandemic there is a new segment of consumers who want to make up for the lost opportunities of gathering experiences and celebrations. They are also willing to put time, effort and money to prove a point. The recent rush to cinemas to watch the Hindi Movie ‘Pathaan’ to defy the #boycottbollywood trend is a recent example.

A large section within this cohort also reflects the rising aspirational class of India which is on a journey of upward social mobility. This cohort believes in expressing their views and experiences out loud. This is also reflected in the growing occasion wear segment. The idea is to put one’s best foot forward. To them, their online perception matters a lot.

The Skeptic Optimists:

This cohort consists mainly of Gen X consumers who have been through multiple waves of change. However, through multiple phases of uncertainty and change , fatigue has crept in. These people are in their 40s through the mid-50s and have massive spending power. They are leaders in their households as well as in business where they form a part of the top management.

A sense of no control is a red signal for them and they prefer smooth and frictionless experiences. They are optimistic about a changing India in a changing world. They, however, weigh their options carefully before zeroing in on a decision. The idea is, once they have chosen a product or service, the experience is smooth and as per their expectations.

They would prefer a highly curated and simplified product and service line with the highest degree of reliability. Bands and businesses can tap into this segment with deep pockets by offering experiences that are seamless, uncomplicated and customisable as per the consumer’s demand.