Circular fashion refers to an alternative clothing manufacturing and consumption model that aims to keep clothes, fabrics, and materials in use and at their highest value at their end stage. It involves reusing, repairing, upgrading, remaking, recycling, swapping clothes in closed-loop systems. Circular fashion as an alternative to fast fashion involves extending the useful life of clothing through various means and reducing overall environmental impact. The global circular fashion market is estimated to be valued at US$ 6.09 billion in 2023 and is expected to exhibit a CAGR of 3.5% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity:

The opportunity to reduce overall environmental impact presents a key growth opportunity for Global circular fashion market growth. Fast fashion has significantly contributed to environmental issues like high water usage, pollution from dyeing and processing of raw materials as well as textile waste ending up in landfills. Embracing circular fashion practices like reusing clothes longer, repairing and upcycling old clothes allows reducing consumption of fresh resources and production of new clothes. It is estimated that circular fashion practices could reduce carbon, water and plastic pollution by around 20-30% each in comparison to linear take-make-dispose fast fashion. This presents a significant market opportunity for circular fashion brands to position themselves as more sustainable alternatives and attract environmentally conscious customers.

Porter's Analysis

Threat of new entrants: The threat of new entrants is moderate as the fashion industry requires high initial investment and established brands have strong customer loyalty.

Bargaining power of buyers: The bargaining power of buyers is high as there are many circular fashion brands for customers to choose from. Customers can easily switch to other brands.

Bargaining power of suppliers: The bargaining power of suppliers is moderate as there are many fabric suppliers that circular fashion companies can source from.

Threat of new substitutes: The threat of new substitutes is high as customers have options of traditional fast fashion and renting/sharing business models as an alternative to circular fashion.

Competitive rivalry: The competitive rivalry is intense as key players compete on pricing, product designs, sustainability credentials and customer experience.

SWOT Analysis

Strength: Circular fashion alleviates environmental impacts of fast fashion by reusing existing materials. Growing consumer awareness about sustainability is driving demand for eco-friendly brands.

Weakness: Collection and sorting of pre-used garments for recycling poses operational challenges. Maintaining quality standards for reused fabrics requires extensive processing.

Opportunity: Emerging economies present a large untapped market as disposable income rises and sustainability gains prominence. Partnerships allow brands to expand product offerings and geographical reach.

Threats: Limited infrastructure in developing nations hinders collection networks. Macroeconomic headwinds like high inflation could dampen discretionary spending on apparel.

Key Takeaways

The global circular fashion market is expected to witness high growth over the forecast period driven by rising environmental concerns.

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