The Canadian apparel e-commerce market decreased by 2.2 per cent during 2023 to C$6.9 billion, and accounted for 19.4 per cent of apparel sales. Last year was the second consecutive year apparel e-commerce sales decreased in Canada, according to a report by Trendex North America.
Trendex forecasts that online apparel sales will increase by 0.9 per cent in 2024 and by 6.1% from 2023- 2027, while during the same two periods total apparel sales will increase 2.5 per cent and 13.0 per cent respectively.
It said forecasting the growth of apparel e-commerce sales is a function of a number of variables, including:
- The degree to which consumers will continue to be negatively affected by inflation and high interest rates;
- The sales growth of both Shein and Temu;
- The degree to which Shein and Temu forced other apparel e-commerce retailers to lower their prices;
- The propensity for consumers overall to continue to return to shopping in stores vs. online, both of which slowed considerably during the first half of 2024;
- The first quarter 2024, e-commerce sales of Canadian apparel retailers.
“Holding down the growth for apparel e-commerce was the luxury apparel e-commerce segment whose sales decreased an estimated five per cent-eight per cent in 2023. While luxury apparel sales were still strong with high end customers, this segment has never shown a high propensity to shop online. Aspirational shoppers cut back on their online luxury apparel purchases because of economic headwinds. This trend was reflected in the poor performance of Farfetch and Net-A-Porter last year,” said the report.
“Adding to the woes of the luxury apparel e-commerce segment was the expanded sales of in store luxury apparel sales. The expansion of the number of luxury apparel stores, the upgrading of luxury apparel stores along with the expansion of luxury apparel nodes including Yorkdale and the Bloor St. corridor, all served as a deterrent to online luxury apparel sales.”
Trendex said, using its proprietary database and other sources, it determined that in 2023 Shein was Canada’s largest apparel e-commerce retailer, which is somewhat surprising given the fact that the retailer entered Canada in February 2023.
“The retailer’s success, as our readers are aware, is attributable to its ever-changing fast-fashion offering and low prices. Walmart and The Gap were second and third largest retailers. The country’s 12 largest e-commerce retailers accounted for 56.5 per cent of apparel e-commerce sales. An interesting fact is that seven of the retailers were Canadian owned.
The full report can be found here.
Related Trendex Article: International Retailers And Their Success In Canada: Interview With Randy Harris Of Trendex
