1. Economics Of The Fashion Industry
Can an infant fashion industry become a major player in the global
2. Thesis Question
“Can an ‘infant’ fashion industry overcome the established
advantages in current fashion capitals and become a
major player in the global industry?”
By performing a comparative analysis of the growth and profitability of companies, the
thesis highlights the success prospects of an upcoming fashion company which is relatively
new to the market and/or not based in one of the 4 major fashion clusters, and analyses
the scope of it emerging as a major player in the global fashion industry.
In addition, a special emphasis is given on the operations of the companies in the ongoing
COVID-19 pandemic and their future business scope. Thus, the conclusions of our thesis will
help aspiring entrepreneurs and designers to make an informed decision about their
business prospects and success strategies.
4. WHAT IS FASHION?
Fashion is a term that is plagued by its many different interpretations.
Most commonly, fashion alludes to the prevailing style of dressing or behaviour at
any given time that is spread across a population, with the strong implication that it is
characterized by change.
Today, fashion has become one of the primary ways in which people express their
personalities and their own unique taste and styling.
The fashion industry encompasses a network of global enterprises that involves the
design, manufacturing and selling of apparel and accessories.
5. CLOTHING FASHION
Although the fashion industry refers to a
myriad of industries, the thesis focuses
on the clothing fashion industry.
The thesis aims to compare and analyse the
top clothing brands in the market by
taking into account the multiple
categories of clothing fashion.
Of all the different categories of clothing
production, the thesis attempts to study
three categories, namely, luxury or
designer fashion, athleisure or
sportswear, and fast fashion.
6. Historical Background
Late 16th century Europe. The pace
of change picked up in the 1780s
with increased publication of French
engravings illustrating the latest
Paris styles, followed by fashion
‘Golden Age of French fashion’ saw
a radical change and reformation
in fashion. Couture houses, like
Chanel and Balenciaga, were
established in Paris.
After World War II
Many couture houses in Paris had
closed and the fashion scene shifted
from Paris to London and New York.
Charles Frederick Worth
became the first fashion
designer of the world in 1858.
7. During the late 20th century, famous
fashion labels like Gucci, Prada and
Louis Vuitton emerged and anticipated
the globalization of world markets.
Milan, benefiting from certain
features of its productive structure,
eventually emerged as a major
trend setter, marking the beginning
of the Milan Fashion Week (1958).
Designers in Paris and Milan
eventually began producing
“ready-to-wear” fashion to keep
up with New York and London.
This was followed by an incredibly
crucial part of the global fashion
market, the Paris Fashion Week in
1973 and the prestigious London
Fashion Week in 1984.
8. The “BIG 4” of the Fashion Industry
9. ▪ Refers to the cost advantage
experienced by a firm when it
increases its level of output.
▪ There are two types of economies of
scale, internal and external. Internal
economies refer to economies that
are unique to a firm.
▪ External economies of scale include
the benefits of positive
externalities enjoyed by firms as a
result of the development of an
industry or the whole economy.
▪ “Clusters” encompass an array of
linked industries and other entities
important to competition.
▪ The prospect of external economies
of scale often induces firms in the
same industry to cluster together
wherein new firms can take
advantage of the existing
▪ With respect to the fashion industry,
companies tend to congregate in the 4
major fashion clusters of the world
namely, London, Paris, New York and
Economies of Scale Cluster Economies
10. EMERGING FASHION INDUSTRIES
industries have been
established in multiple
cities around the globe.
Studies have been
conducted on the successes
and failures of the emerging
fashion industries of
Sweden, Canada, Ghana,
Uganda, Singapore, South
Africa, India and various
While some new industries, like
in Sweden and Los Angeles,
▪ shown successes
▪ pointing towards their
individual business strategy
and a pattern of clustering
similar to that of the current
Other industries, like Canada,
▪ lacking in their contributions
to the global fashion industry
▪ due to lack of policy, support,
and unification of the