South Africa’s fashion designers, many of whom follow slow fashion principles, contributed at least R1 billion to GDP last year. They also show great potential to help rejuvenate manufacturing and to create jobs and skills as the country recovers from the impact of the Covid-19 pandemic.
These are findings of the study, Assessing the Economic Value of the Designer Fashion Sector in South Africa, conducted by the Department of Trade, Industry and Competition and the South African Cotton Cluster. The study established the economic value of fashionable or luxury apparel. This is apparel made by, or carrying the label of a specific designer, which is typically sold with high exclusivity, limited availability, over a limited time period, with high levels of quality and for the purpose of aesthetic expression.
“The sector’s contribution to the local economy, as well as identified potential impact, positions the designer apparel sector as a key investment opportunity,” the study states.
The study highlighted that the designer apparel sector was well-placed to adopt the slow fashion mentality and to cater to this growing trend. For many designers sustainability is becoming a business imperative. Designers are driving sustainability by means of considered designs, limited production of ranges, upcycling, using natural fibres and partnering with suppliers who adhere to sustainable practices. This follows an international shift in buying behaviour towards ‘slow fashion’ which is defined as a more conscious approach, in which small-scale, responsibly-produced products are favoured.
There are ample opportunities when it comes to positioning the designer apparel sector as a pioneer and custodian of sustainability.
This research found that designers contributed at least R1 billion to GDP during 2019. With a total addressable market size of R180 billion, there is extensive opportunity in tapping into this market’s potential. It also concluded that designers had substantial growth opportunities within an evolving local middle-class market. The broader global apparel market sees staggering figures when it comes to revenue, and is currently valued at US$1.5 trillion.
The total SA clothing and textile sector contributes approximately 8% to SA manufacturing GDP and 3% to total GDP. Historically, designer and luxury goods sales have enjoyed positive growth trajectories, sometimes reaching as much as 65% as opposed to just 5.32% for the apparel and footwear retail sector. Although the impact of Covid-19 on this market in the short to medium term remains uncertain both locally and globally, there are indications of good future growth potential.
The study noted that the sector could target the growing upper-middle class of South Africa.
Designers interviewed for the study employed 1 998 people with an average number of six employees per company. When extrapolated over 641 designers (number of designers on the available database) this market segment is estimated to employ nearly four thousand people. With each employee believed to support at least three others, it supports approximately 11 000 people.
The findings demonstrate that 60% of designers currently see the majority of their employment met through 100% full-time positions.
More than half of the 320 interviewees (52%) reported that 100% of their sales were local, 47% saw half of their turnover coming from local sales, and just 1% of local designers get all their profits from international exports alone. As the study records major international interest in local design, it suggests that there is significant opportunity for local designers to establish a meaningful presence in the global fashion market, which is valued at an estimated US$1.5 trillion.
However, the study showed that growing this segment of the apparel market would not necessarily be easy. The researchers noted that most fashion designers struggle in their early years, living hand-to-mouth while developing their brands. Supporting these young designers and design houses would be crucial to the success and development of the entire local industry, the study said.
There are a number of established funding grants, including the likes of the Clothing and Textile Competitiveness Programme, initiated by the Department of Trade, Industry and Competition and currently in excess of R200 million, aimed at assisting those within the textile sector. This being said, it is apparent that many designers are unaware of the grant options available, whilst those who are aware identify a number of compliancy and structural barriers-to-entry which make grant funding increasingly difficult.
African designers are competing against imports from the likes of China and Pakistan which dramatically lower the price of final garments and products. For local designers to design, manufacture and market locally, it is inevitable that costs will be significantly higher than counterparts that are, often illegally, imported from the likes of China.
According to the study, 92% of respondents recorded turnovers below R5 million and therefore fell into the SME (small and micro) band, highlighting that they were vulnerable to the same challenges faced by many fledgling and developing businesses in this country.
- Nearly 50% of all responses specifically noted a lack of government investment in the sector as being a key concern that is currently prohibiting growth and development
- It was further highlighted that there is a fundamental need to focus on up-and-coming designers within the sector, the number of which outweighs the number of established players
- The availability of local sustainable materials was identified as a key barrier-to-entry when it comes to designers wishing to adopt sustainable practices
Despite the challenges, this study has shown that the industry sees a rich and diverse sector that is home to globally-competitive designers – it is imperative to drive meaningful and sustainable growth to safeguard its vibrancy and longevity for those designers who are still to come.
“This study is vital in building sector intelligence to help understand the future of the fashion design sector. It will point us in the right direction when it comes to optimising opportunities and creating growth. Studies such as this will not only enable both our existing and up and coming designers to grow their businesses and encourage South Africans to buy local, but also create a supply chain that will benefit many South Africans,” the country’s Department of Trade, Industry and Competition said in a statement following the conclusion of this study.
- The study was conducted by the Department of Trade, Industry and Competition and the South African Cotton Cluster and used a combination of both desktop research and primary engagements with 320 designers. The study follows an initiative by the South Africa Cotton Cluster as a National Intervention to better identify the country’s textile capability and capacity in 2015 and 2016. The outcome was a report that informs government decision making in terms of localisation. It became known as the “The South Africa Textile Directory”.
- This article was produced with support from the SA Cotton Cluster.
- Image: MaXhosa by Laduma at AFI by SDR Photo