The European market potential for homewear

Homewear is a popular product group on the European market, where nearly two thirds of imports are sourced directly from developing countries. It benefits from consumers spending more time at home, both ‘cocooning’ and working, and an increasing interest in wellness and the (at-home) spa experience. These trends were given a further boost by recent lockdown measures. The COVID-19 pandemic has also underlined the importance of sustainability. Offering the option to work via co-creation can give you a competitive edge.

1. Product description

In Home Decoration and Home Textiles (HDHT), homewear belongs to a category that can be considered a crossover section between home textiles and garments. Homewear can be described as comfortable clothing items that can be worn around the house, including bathrobes and sleepwear.

Bathrobes (or dressing gowns) can be used right after bathing or at the sauna, serving both as a towel and garment. Sleepwear is clothing designed to be worn while sleeping. At any other time, these items can be used as informal loungewear in the home. The type of sleepwear worn may vary depending on the season and climate, with items that keep you warm being worn in cooler conditions and vice versa.

Specifically, homewear includes:

• adult onesies - all-in-one footed sleep suits worn by adults, usually cotton, similar to an infant onesie or children’s blanket sleeper
• babydolls - short, sometimes sleeveless, loose-fitting nightgowns or negligees for women, generally designed to resemble a young girl’s nightgown
• bathrobes - serving both as a towel and an informal garment, usually of towelling textile
• chemises - delicate, loose-fitting, sleeveless, shirt-like lingerie, similar to a babydoll but tighter at the hips
• negligees - loose nightwear for women, usually of sheer or semi-translucent fabric and trimmed with bows and lace or other fine material
• nightgowns - loose hanging nightwear for women, typically cotton, silk, satin, or nylon
• nightshirts - unisex loose-fitting garments, longer than a regular shirt
• pyjamas - loose fitting two-piece garments for women, men and children, of cotton, silk, satin or synthetic materials
• pyjama bottoms - loose fitting cotton pants for men that are sold separately, to wear with a T-shirt
• peignoirs - long outer garments for women, usually of sheer chiffon and sold with a matching nightgown, negligee or panties

Figure 1: Flannel pyjamas

Source: Pexels

This study uses the following codes to indicate trade in homewear:

Table 1: Product codes for homewear

Functionality

Softness and comfort are the most important functional properties of homewear. Bathrobes also need to properly absorb water. In addition to its functional properties, different styles can make homewear visually appealing.

Material

Bathrobes and dressing gowns are typically made of towelling or other absorbent textile materials, usually cotton. Other materials include silk or wool. Synthetic fibres are generally only used in the low-end segment. High-end dressing gowns can also be woven of silk or blends of silk and wool. The weaving method determines the appearance and the absorbance of the robe.

Common weaving methods are:

• terry: usually woven (sometimes knitted) in cotton with uncut loops on both sides – the longer and denser the loops, the more absorbent the robes
• flannel: soft woven fabric, usually in cotton (or wool)
• velour: fabric with cut loops, used to make robes softer and give them a more luxurious look – terry is often used on the inside for absorbance
• waffle: used mostly to make a more lightweight bathrobe, giving the product a grid-like appearance – ‘pique’ is a type of waffle weave in cotton, silk or other fibres
• fine knitwork: mainly used for high-end items of luxurious wool blends

Sleepwear can be made of a wide variety of fabrics. The materials are usually soft, such as cotton, flannel, silk, wool and cashmere. Synthetic materials such as polyester and Lycra are also available.

Figure 2: Women’s pyjama set

Source: Pexels

Design

Design aspects to take into account for bathrobes are length, weight and whether or not to add a hood. The construction, weave or knit of the fabric can also be part of the design. Value addition through the use of special materials and techniques (such as embroidery) is a design aspect too.

Men’s sleepwear tends to come in basic styles, with plain colours or simple patterns (traditionally stripes or checks). Women’s sleepwear is more fashionable and comes in all sorts of colours, prints, fabrics and styles.

Size

Table 2 lists common standard sizes (in cm) for homewear in Europe.

Table 2: Standard homewear sizes in cm

You should always check the exact sizes with your client before you go into production.

2. What makes Europe an interesting market for homewear?

Before the COVID-19 pandemic, the European homewear market was growing steadily. Almost two thirds of the import value is sourced directly from developing countries, making Europe an interesting market for you.

Between 2016 and 2019, European homewear imports increased from €2.9 billion to €3.1 billion. In 2020 however, the outbreak of the coronavirus (COVID-19) led to a -9.3% decrease, pushing the market back to 2016 levels. This added up to an average annual decline of -0.8% over the period from 2016 to 2020. As the pandemic is reported to have hit clothing/apparel sales particularly hard, this development is not surprising.

Nearly two thirds of the total European homewear import value is sourced directly from developing countries. Because of this, these imports showed a similar pattern to the overall imports, increasing until 2019 and then dropping. Nevertheless, Europe is an interesting market for you, as an exporter from a developing country.

In 2021, the COVID-19 pandemic and the measures taken against it worldwide continue to affect international trade. At the same time, lockdowns have resulted in an increased focus on the home and garden. This may partly or fully offset the negative effects on the market. Market growth is driven by an increased focus on wellness and ‘cocooning’ at home. For more drivers of demand, see ‘which trends offer opportunities?’ below.

3. Which European countries offer most opportunities for homewear?

The larger Western European economies are the main importers of homewear. However, importers in these countries generally sell their products across Europe. Your best strategy is therefore to focus on a particular segment, rather than a specific country.

Despite a considerable drop in imports, the United Kingdom remains Europe’s leading homewear importer with around 18% of imports, followed by Germany and France with 14% and 12% respectively. Together, these countries account for nearly half of the European total. Smaller markets with a share of less than 10%, but still in the top six of leading importing countries, are Italy (9.6%), Spain (8.2%) and the Netherlands (5.9%).

However, you should be aware that in the European market, countries have different roles. A rough distinction can be made between countries that are mainly importers and countries that are mainly manufacturers. Most Western European importers not only sell their imported products in their own country, but also distribute them across Europe. This explains why in HDHT, imports into small countries like Denmark and the Netherlands often far exceed the demand in their own domestic market.

In terms of marketing, you need to realise that countries are not markets. In HDHT there are different market segments, ranging from low to high (also see our study on market entry for homewear). Every European country has these segments, although their size may vary per country. Therefore, it makes much more sense for you to identify a particular segment in your product group and connect with the importers and distributors in that segment, instead of a specific country. These distributors will then sell your products in that segment across Europe.

Real private consumption expenditure

Real private consumption expenditure is an important indicator for growth in demand. The HDHT sector, which includes the homewear market, is sensitive to economic cycles. When economic circumstances and prospects are poor, consumers postpone buying non-essential items. Conversely, when economic conditions are favourable, private consumption expenditure and purchases of non-essential HDHT products tend to increase.

Until the outbreak of the COVID-19 pandemic, the leading European markets showed an annual growth in real private consumption expenditure of around 1-3%. Due to the pandemic, this trend was reversed in 2020. However, because the lockdowns increased consumers’ focus on their home, the effect on the HDHT sector may have been limited. For the coming years, growth is expected to bounce back into positive figures.

Brexit may boost direct trade with the United Kingdom

British homewear imports dropped by -12% in 2020, to €514 million. This added up to an average annual decrease of -2.3% over the period from 2016 to 2020. In 2020, the United Kingdom sourced 87% of its homewear imports directly from developing countries, which is their largest market share in Europe.

China continues to be the main exporter of homewear to the United Kingdom with 31% of British imports in 2020, followed by India (18%) and Bangladesh (16%). Encouragingly, 4^th and 12^th largest exporters Turkey and Myanmar are among the few countries that managed to increase their exports to the UK in 2020.

The United Kingdom's withdrawal from the European Union (Brexit) has led to relatively low consumer confidence levels since 2016. At the same time, Brexit may lead to British buyers importing more items directly from developing countries, rather than from European importers. This allows them to avoid additional fees now that they are no longer part of the European Union’s single market. The devaluation of the British pound since the Brexit referendum has also made direct trade more attractive.

British GDP decreased by -9.9% in 2020, a record decline. At the start of 2021, a Financial Times survey among leading economists projected the British economy to be one of the last to recover. Since then, however, the Bank of England governor Andrew Bailey has indicated he expects the economy to be back to pre-COVID levels by the end of 2021. Considering this positive development and the potential increased interest in direct sourcing from developing countries, the United Kingdom could well offer you good opportunities.

Germany is Europe’s largest economy

Germany is the largest economy in Europe, home to nearly a fifth of the European Union’s population. It is widely considered the stabilising force within the European Union. The Economist has forecast Germany to be the first major European economy to recover from the current crisis. This is based on both the country’s healthy finances before the crisis and its large industrial sector, the reboot of which also benefits suppliers abroad. The European Commission likewise projects German GDP to be back at pre-COVID-19 level at the turn of 2021/2022.

Between 2016 and 2020, German homewear imports fluctuated slightly at around €400 million per year. They even increased slightly in 2020, to €409 million. This added up to an average annual growth rate of 0.2% over this period.

Germany sources less than half of its homewear import value directly from developing countries, which is considerably below the European average. These imports decreased by -4.8% between 2016 and 2020. In this period, Poland overtook China, the Netherlands, Bangladesh and Turkey to become Germany’s leading homewear supplier.

In addition to having a large domestic market, Germany is also a key trade hub within Europe. This makes Germany an interesting gateway to the European market.

France’s economy is set to recover in 2022

Between 2016 and 2019, homewear imports into France fluctuated at around €350 million per year. They dropped to €331 million in 2020, which added up to average annual decline of -1.4% over the period from 2016 to 2020. France’s direct homewear imports from developing countries followed a similar pattern, fluctuating at around €220 million per year and then slipping to €204 million in 2020. This means that around two thirds of French imports was sourced directly from developing countries, a market share that matches the European average.

China is the leading exporter of homewear to France, accounting for 30% of imports, followed at a distance by Bangladesh, which has a 10% import market share.

Economic growth in France had already slowed down before plummeting to -8.3% in 2020 due to the pandemic. Global uncertainties and the effects of social unrest weighed on consumer confidence and the consumption of non-essential products. However, French GDP is expected return to its pre-pandemic level during the first half of 2022, slightly ahead of the European average. This could make France an interesting market for you.

Italy’s economy is expected to recover particularly slowly

Being particularly affected by the pandemic, Italy experienced a GDP decline of -8.8% in 2020. Italian GDP is not projected to reach its 2019-level in by the end of 2022, as the Italian economy is still forecast to have slowest recovery in Europe. This is expected to affect consumer confidence and the consumption of non-essential products in the coming years.

Italian homewear imports peaked in 2018, at €323 million, and then decreased. A further -15% decrease in 2020 added up to an average annual decrease of -3.3% between 2016 and 2020. More than three quarters of these imports was sourced directly from developing countries, which is well above the European average. These imports followed a similar pattern, peaking at €252 million in 2018 and then falling back to €213 million in 2020.

With an import market share of 20%, India is the leading exporter of homewear to Italy, followed by China, Bangladesh and Sri Lanka with 14%, 13% and 10% respectively. Interestingly, Cambodia managed to increase its homewear exports to Italy in 2020, attaining an import market share of 5.1%. However, in general, prospects on this market are likely to be limited in the coming years.

The economy in Spain is also expected to struggle

Spanish homewear imports decreased from €259 million in 2016 to €234 million in 2020, at an average rate of 2.6% per year. Spain sourced around two thirds of this directly from developing countries, matching the European average. These imports reached a value of €149 million in 2020. China and Bangladesh are the leading exporters of homewear to Spain, with import market shares of 24% and 16% respectively.

Whether Spain can sustain its demand for HDHT products largely depends on the effects of the pandemic. As The Economist predicted, the Spanish economy experienced the deepest contraction in Europe with a decrease in GDP of 11% in 2020. A return to pre-pandemic levels is not expected before 2023, which is considerably later than the European average. This will obviously limit your opportunities in Spain in the coming years.

The Netherlands is an important European trade hub

Like many European countries, the Netherlands saw its homewear imports fluctuate between 2016 and 2020. Imports peaked at €230 million in 2018 and then declined, which added up to average annual decrease of -5.8%. Direct imports from developing countries declined at an average annual rate of -7.2% over this period. Around three quarters of Dutch imports are sourced directly from developing countries, which is one their largest market shares in Europe. China is the leading supplier of homewear to the Netherlands, with an import market share of 25%, followed by Bangladesh and Germany, with 14% each, and then India with 11%.

Dutch GDP is projected to return to 2019-levels at the end of 2022, lagging slightly behind the European average. As well as the COVID-19 pandemic, Brexit and international trade disputes between the United States and China and between the United States and Europe may have a big impact on the Netherlands. Because the country heavily depends on international trade, negative developments in that area strongly affect its economic performance. This, in turn, affects consumption of homewear.

Since the Netherlands is a big re-exporter of goods, the impact on imports of HDHT products goes beyond the country itself. Developments in other European countries will also play a role, making total Dutch imports difficult to predict. However, as a large share of the Dutch import market is sourced directly from developing countries, the Netherlands continues to be a relatively interesting market for you.

4. What trends offer opportunities or pose threats on the European homewear market?

The market for homewear is shaped by various trends, often related to the trends for HDHT on a sector level. We will outline the main developments below, starting with the potential effects of the COVID-19 pandemic on the HDHT market.

COVID-19 and trends in HDHT and homewear

An expected outcome after the COVID-19 crisis is that people will be more focused on the home, having been in lockdown. A major factor in consumer spending will be the disposable income consumers may or may not have after the pandemic. The level of concern about this is expressed by consumer confidence, which continues to be relatively low. This makes consumers reluctant to spend on anything beyond food, cleaning products and other household essentials.

However, the pandemic has boosted consumer interest in some areas, such as:

• wellness / fitness at home
• working from home
• cooking

Spending a lot of time at home has also moved consumers towards:

• a reappreciation of their homes and the desire to make their home more pleasant, practical and comfortable overall
• bringing the outdoors inside and vice versa
• removing clutter

These trends are partly a continuation of consumer trends that were already ongoing, some of which have been accelerated as a direct consequence of COVID-19 and subsequent lockdowns. In addition, the pandemic has demonstrated the fragile balance on this planet. As such, it is another important demonstration of the fact that we need to produce more sustainably, taking care of our resources, our people and the planet in general. These developments underline the importance of existing trends such as wellness, cocooning and sustainability in the homewear market.

Wellness: the spa experience at home

To boost their mental and spiritual wellbeing, European consumers are increasingly including spa and yoga practices in their lifestyles. This trend has accelerated due to the pandemic, as the COVID-19 crisis has made consumers more acutely aware of the importance of both their mental and physical wellness. In 2018, Europe lead the world in spa revenues. European consumers are also creating spa experiences at home, using relatively luxurious products in their own bathrooms. These home experiences have become particularly relevant since the pandemic has limited access to spa facilities.

As typical wellness products, sales of bathrobes and other homewear items can benefit from this trend, especially in the higher market segments catering to consumers who can afford luxury and spa products.

Figure 6: Luxurious bathrobe with woven pattern

Source: Pexels

Home sweet home: cocooning

European consumers consider their home a personal space where they can shut themselves off from the outside for some quality ‘me time’. Clothes worn inside the house must be intimate, answer to individual needs and be very comfortable. Homewear taps into this trend. Bathrobes, onesies, pyjamas or nightshirts: you decide what to wear in your cocoon!

Cocooning is increasingly popular among European consumers. This is leading to a growing interest in spa and wellness products, as well as homewear and loungewear. People are looking for comfort and cosiness to relax at home. Homewear adds to this experience.

In addition, people spending more time at home due to the COVID-19 pandemic has further boosted the interest in homewear. The increase in working from home allows people to wear comfortable and casual clothing during business hours as well, often combined with formal wear from the waist up to create a ‘business on top, party on the bottom’ style for online meetings. This trend may well be here to stay, as more than 40% of people express a strong interest in working from home permanently.

Figure 7: Pyjama bottoms combined with a T-shirt

Source: Pexels

Social and environmental sustainability

Because bathrobes come into direct contact with people’s skin, consumers consider the softness of the material and the sustainability of the product to be particularly important. Having their homewear made of organic cotton gives consumers a feeling of health and wellness. Organic cotton is often reported to actually feel softer than conventional cotton.

Materials like bamboo have also become more and more popular. In the higher segment, high-quality and very soft fibres such as cashmere are in fashion. Such natural fibre homewear also fits into the trend of consumers trying to get back to nature.

Social and environmental responsibility is an increasingly important aspect of the mid-high to high-end market segment. Using and promoting natural materials or recycled fibres, as well as obtaining certification and operating in a transparent way, are key ways to meet this demand. The COVID-19 pandemic has further underlined the importance of this trend. For most consumers (particularly the younger generations), the COVID-19 crisis has made it more important that both consumers and companies improve their sustainability.

Co-creation

European buyers are increasingly trying to stand out from their competitors by focusing on their own image and design. To this end, they look for producers they can cooperate with to develop their own products; this is known as ‘co-creation’. With co-creation, it is extra important to showcase your special skills, production techniques and the variety of raw materials you work with. Besides buyers for the consumer market, hotels and spas can also be an interesting target market for customised developments (colours, logos, etc.).

Smaller quantities and shorter lead times

European buyers change their collections increasingly often. They also try to minimise the risk of being overstocked. Consequently, they are looking for shorter lead times and lower minimum orders. This is a distinct advantage for small to medium-sized producers like you, since you are more flexible and can generally supply smaller quantities than larger producers.

Example of company:

Sarita Handa , based in India, recently introduced a number of homewear products. The company capitalises on the quality of its materials and finish (“100% cotton, so your skin can breathe and you can be comfortable” / “smooth, yet sturdy craftsmanship”), as well as on the design content, which derives a lot of its strength from the use of special techniques. In this sense, it is a good example of a company that focuses on more long-term trends and quality on several levels. Sarita Handa sells both off- the-shelf products and bespoke textiles.

This study was carried out on behalf of CBI by Globally Cool B.V. in collaboration with Remco Kemper.

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