Europe’s fashion market witnessed a slowdown due to economic uncertainty in recent years, however a new report suggests growth will pick up again in 2025 and names three key areas of untapped potential that could aid its recovery over the next three years.

GlobalData’s report titled ‘The Apparel Market in Europe to 2028′ says ongoing geopolitical issues like the Russia-Ukraine war and the Israel-Palestine conflict have taken a toll on consumer confidence, which in turn has had a negative impact on the region’s fashion sector.

However, it adds that Europe’s fashion market can expect to see growth of up to 2.4% this year (2025) as consumers’ finances recover from previous bouts of rising inflation. 

It will then slow out to 2028 as the fashion market becomes more established and more consumers switch to buying items via resale, with a forecast 2023-2028 CAGR of 1.8%.

What are the three main drivers for Europe’s fashion market from 2025 to 2028? 

GlobalData predicts there will be three key drivers that fashion brands, sourcing executives and suppliers reliant on the European fashion industry should take into consideration to boost their market share in the coming years. 

1. Eastern European markets 

The expanding potential of Eastern European markets is said to be becoming a significant driver, thanks to the strong economic developments in these countries. 

The region also has rapidly growing middle-class populations, with consumers’ becoming increasingly interested in fashion and trends, providing lucrative opportunities for brands. 

As a result, international players would benefit from continuing to expand their presence in these locations.

The report notes Turkish fashion brand Trendyol was the fashion brand with the greatest share of growth in 2024 thanks to entering new Eastern European markets. It adds that the brand has already launched operations in Hungary, Romania and the Czech Republic. 

GlobalData believes UK fashion brand Primark will also benefit from its expansion into Eastern Europe in the coming years. 

It points out the UK and Ireland, which make up 47% of its total sales, saw revenue rise by only 2% in FY2023/24 to 14 September 2024. In contrast, France and Italy saw some of its highest growths of 12%, and its newer markets of Central and Eastern Europe rose 42%.

This is supported by the retailer’s most recent trading update for the 16 weeks to 4 January 2025. It revealed that Central and Eastern Europe account for approximately 3% of sales overall and its sales in the region grew 22% thanks to new store openings, such as a new store in Czechia and one in Poland.

2. Online performance 

Europe’s online fashion market is expected to see an uptick in growth this year (2025) with GlobalData forecasting it to reach 4.6%, before gradually slowing out to 2028, as its more developed nature gives less scope for further advancements. 

The online market will continue outperforming the rest of the market with a CAGR of 3.8% between 2023 and 2028 reaching €157.9bn ($165.90bn) with offline growing at a CAGR of just 1.1%. 

This will be driven by brands’ ongoing investments in new technologies that will allow them to offer more seamless shopping experiences. Plus, consumers will increasingly appreciate the online channel’s convenience.

Overall, there is expected to be an online penetration of 29.9% in 2028 that will also be driven by enhanced propositions and continued incorporation of technologies like AI and AR.

Eastern Europe (excluding Türkiye) will enjoy even stronger online growth with a CAGR of 6.3%. Its digital infrastructure is less established compared to Western Europe, which means its offering has greater opportunity for online players.

3. Gen z shoppers 

The report notes Gen Z consumers (anyone born between 1997 and 2012) are propelling growth in the European apparel market, thanks to their keen interest in keeping up with fashion trends. 

The report explains this has fuelled the rapid expansion of fast fashion brands like Inditex‘s Zara and Singapore-headquartered online fast fashion giant Shein. It says these brands attract Gen Z consumers with their affordable price points and frequent newness.

The fashion preferences of Gen Z are increasingly being influenced by social media. Therefore, brands targeting this demographic are advised to develop strong digital strategies to enhance engagement and drive sales.

This is supported by a report published last July that found 20% of Gen Z see social media as a future primary shopping platform. 

The report, which was published by US intelligence provider Morning Consult for US retailer Walmart explained that over half (55%) of Gen Z consumers made purchases while browsing social media in the past six months and 21% of people admitted to shopping online while doing daily tasks.