Canadian e-commerce apparel sales set to surge: Trendex

The Canadian apparel e-commerce market declined 2.2% in 2023 to C$6.9 billion and accounted for 19.4% of apparel sales. Last year was the second consecutive year that apparel e-commerce sales declined in Canada, according to a report Trendex North America.

Trendex forecasts that online apparel sales will grow by 0.9% in 2024 and by 6.1% between 2023 and 2027, while total apparel sales will grow by 2.5% and 13.0%, respectively, over the same two periods.

Trendex forecasts that online apparel sales will grow by 0.9% in 2024 and by 6.1% between 2023 and 2027, while total apparel sales will grow by 2.5% and 13.0%, respectively, over the same two periods.

The report points out that forecasting e-commerce apparel sales growth is a function of many variables, including:

• The extent to which consumers will continue to be negatively affected by inflation and high interest rates;
• Shein and Temu sales increase;
• The extent to which Shein and Temu have forced other online clothing retailers to lower their prices;
• The general propensity of consumers to return to shopping in-store rather than online, with both types of shopping slowing significantly in the first half of 2024;
• Q1 2024, online sales of Canadian apparel retailers.

“The pause in apparel e-commerce growth was driven by the luxury apparel e-commerce segment, which saw sales decline by an estimated five to eight percent in 2023. While luxury apparel sales remained strong among high-end shoppers, this segment has never shown much propensity for online shopping. Aspirational shoppers have reduced their online luxury apparel purchases due to economic headwinds. This trend was reflected in weak performances by Farfetch and Net-A-Porter last year,” the report said.

“The luxury apparel e-commerce woes have been compounded by increased sales in luxury apparel stores. The expansion of the number of luxury apparel stores, the modernization of luxury apparel stores, and the expansion of luxury apparel hubs, including Yorkdale and the Bloor St. corridor, have all acted as deterrents to online luxury apparel sales.”

Trendex said it determined from its proprietary database and other sources that Shein was Canada’s largest online apparel retailer in 2023, which is somewhat surprising given that the retailer entered the Canadian market in February 2023.

“The retailer’s success, as our readers know, is attributed to its ever-changing fast-fashion offerings and low prices. Walmart and The Gap were the second- and third-largest retailers. The country’s 12 largest retailers accounted for 56.5% of e-commerce apparel sales. Interestingly, seven of the retailers were Canadian-owned.

The full report can be found Here.