Global apparel retailers seeking the most attractive emerging market in which to build their businesses should head for Brazil rather than China or India, a new study has found.

Citing the country's high spending on apparel items and strong clothing imports - along with its consumers' preference for the latest fashions - global management consulting firm AT Kearney believes there is "great potential for global apparel retailers to succeed in Brazil."  

The AT Kearney Retail Apparel Index looks at ten drivers including apparel consumption and clothing imports/exports to rank the top 30 emerging markets for retail apparel investments.
"Brazil is the most attractive apparel market for reasons of demographics and demand," says Hana Ben-Shabat, a partner at the consultancy.

Brazil's clothing market is growing at more than 7% annually and is estimated at $37.2bn. 

The country is young, with more than 60% of its population below the age of 29, and its consumers spend $402 annually on apparel - six times more than the average Chinese consumer.

Brazilian consumers use credit for apparel purchases far more frequently than in other emerging markets.  

In addition, small, local retailers make up more than 60% of a highly fragmented domestic retail apparel market. 

China and India closely trail Brazil in the Apparel Retail Index.

Both countries have significant potential to increase the average spend per capita on clothing as prosperity continues to rise.

At $84bn, China's apparel market is the world's third largest and organised apparel retail accounts for just 17% of it.

Average monthly apparel spend is $45 to $90, which is significantly lower than most other countries. 

However, an affluent middle class that regularly buys mid- to high-end apparel is emerging in urban areas. These consumers buy up to three mid-to-high end pieces every year for special occasions, such as Chinese New Year, weddings and important meetings. 

"There are emerging customer segments in China that are much more fashion-focused and brand aware," said Mike Moriarty, a partner with AT Kearney, "but international apparel retailers will need to adapt to the Chinese consumer's fashion sense."

In India, apparel is the second largest retail category (behind food and groceries), representing 10% of the $37bn retail market. 

It is expected to grow 12-15% per year as disposable income grows at rates higher than in China or the United States.

Apparel retail growth will be driven by the burgeoning Indian middle class, the increasing development of apparel-focused shopping malls and the continued penetration of credit cards.   

Places number four through 10 on the Retail Apparel Index are occupied by Turkey, Chile, Romania, Argentina, Thailand, Russia and the United Arab Emirates, respectively.
The Retail Apparel Index was published for the first time this year as a companion to AT Kearney's Global Retail Development Index (GRDI), a study of retail investment attractiveness among 30 emerging markets conducted annually since 2001.