Report Lays Down Path for Swedish Fashion in Backdrop of Climate Crisis, Legislations and Consumer Shifts

FOCUS ON SUSTAINABILITY: The report notes that the fashion industry is facing a major shift—a shift that is complex and driven by a number of different factors. 

• Greater interest in sustainability on the part of consumers and an increasingly digital lifestyle are two crucial factors whose effects are predicted to be decisive. This development is clearly visible in terms of both the constantly growing second hand market and the development of digital fashion. 
• Emphasis is on the second hand market, digital fashion, the fourth industrial revolution and social sustainability. 

The focus on sustainability came about last year and two clear ways were identified to create a sustainable fashion industry. 

1. One focuses on the development of new business models, new materials and a series of other innovations that result in a more resource-efficient industry. 
2. The other focuses instead on severely limiting the number of products placed on the market, while simultaneously finding solutions to circulate existing products for as long as possible. 

Both these aspects are crucial for the fashion industry to have a future that works and should be developed in synergy with each other in order for the transformation of the industry to take place as efficiently and effectively as possible. 

CALL TO LOOK BEYOND SWEDEN: A company’s expansion and scalability is severely restricted if it only concentrates on the Swedish market, but digital communication enables it to reach other markets outside the country’s borders faster. 

• The Swedish fashion industry has seen a 38.33% increase in sales from SEK 120 billion (2009) to SEK 166 billion (2019) in the last decade with exports valued at SEK 32 billion in 2020, which corresponds to 110%. 
• Fashion retail exports increased by approximately SEK 3 billion between 2020 and 2021, which corresponds to growth of almost 10%. 
• Domestic trade also increased, though more modestly, by one percentage point over the same period. 
• The value of clothing and footwear consumed in 2021 was SEK 84,253. 
• Like many other Swedish industries, the fashion industry is an export-dependent industry. 
• Due to the limitations of the domestic market, Swedish fashion operators must focus on going beyond Sweden’s borders and establishing themselves internationally in order to grow and reach their full potential, the report says.

STATUS NOW: From a longer perspective, it is clear that there is a consolidation in progress in the fashion industry. The number of companies is falling, whereas the industry’s total sales are rising. This development may be summarised as follows:

• There are fewer companies, but the companies remaining are larger and more lucrative. 
• There was a total of 13,060 companies in the fashion industry in 2020. There were 7,224 companies in retail and e-commerce in 2020, with 3,225 in wholesale trade and 2,611 in manufacturing. 
• The number of employees is also falling. There were 41,943 employees in the fashion industry in 2020, which was 11 per cent lower than in the previous year.
• The E-barometer also notes that the fashion industry is one of the most popular sub-sectors in e-commerce. The growth in e-commerce has had significant consequences for the domestic market, particularly due to greater accessibility for the consumer. 
• It is interesting to note, however, that the growth in e-commerce also opens up the sector to tougher competition from international operators as it becomes easier to shop across borders. This is a development that has hit the fashion industry particularly hard. 
• Regardless of the pandemic, e-commerce is experiencing growth linked to the development of new technologies and also due to an improvement at company level when it comes to logistics and presentation of goods. The way companies act in the digital sphere is factor to whether they will remain relevant in the market. 
• To reach the digital customer, it is not enough to invest in efficient e-commerce. That initiative must be followed up with a presence in various types of digital channels, particularly social media. The fact that the focus is on a digital presence rather than physical stores brings up the question of the geographical boundaries of the market. 

The Stakeholders: Founded in 1979, the Swedish Fashion Council, a wholly-owned subsidiary of the Swedish Trade Federation, is an industry organisation which aims to promote the country’s fashion industry and provide education and innovation to make it competitive, positioning Sweden as a global leader in a new era. 

• The organisation works to initiate and carry on research projects, issue reports on the sector and promote the next generation of talent through the Swedish Fashion Talents incubator programme. 
• Svensk Handel (The Swedish Trade Federation) is an employers’ organisation that deals with trade issues in wholesale and retail trade and e-commerce. It is currently working to improve conditions for more than 9000 traders in Sweden.
• The Swedish Fashion Council has been owned by the Swedish Trade Federation since 2020 and its goal is contributing to and strengthening the Swedish fashion industry at both national and international levels. 
• TEKO is the trade and employers’ organisation for Swedish textile and fashion companies. TEKO’s member companies are located all over the country and operate in technical textiles, ready-made garments, interior design textiles, accessories/shoes and other textile products and services.