The recovery path of the Italian fashion system from the recession of the last five years, which has profoundly reduced its production base, is full of obstacles. A slightly recovering domestic market is intertwining with the growing difficulties on foreign markets, forcing a new setback in the sector's activity levels.
The slowdown in world demand for the Italian fashion system and the increased competition on foreign markets are, in fact, penalizing the exports of the supply chain. After the reduction in 2015 (-3.5%, at constant prices), in 2016 sectoral exports could be confirmed in negative territory, showing a slight attenuation (-0.7%) compared to last year. The strong exposure to Russia and the slowdown in demand from Asian markets and the NAFTA area weigh on the recent evolution of the fashion system, only partially offset by the slight strengthening of sales on European markets.
The prospects for the two-year period 2017-18 are of a limited recovery which will be supported exclusively by demand on the domestic market, expected to maintain a slightly expansive profile, with foreign sales which may in any case return to growth (Fig.1). The intensity of the recovery will therefore be moderate and will only partially allow the recovery of pre-crisis levels of activity (still -2018% in 16 compared to 2007).
The strengthening of global demand for the Italian fashion system is linked to the disappearance of some problematic situations, starting with Russia, the recovery of the Asian area, thanks above all to the acceleration of Chinese demand, and a general improvement in the purchasing power of commodity producing countries.
In this context, after the reduction of the last two years, from 2017 foreign sales in volume are expected to recover a trend of limited growth. The pace of Italian exports, however, will remain lower than that of world demand, confirming at least in the short term the difficulties of the national fashion system in guaranteeing the maintenance of market shares.
The companies of the Italian fashion system are, in fact, looking for a difficult balance between quality and volumes, in a more competitive international context characterized by profound and rapid changes in consumption patterns. In many markets, both mature and emerging, there is in fact a trend towards polarization of consumption, fueled both by economic and cyclical factors, such as income tensions, but also by structural socio-demographic phenomena, such as the growing importance of cohorts of natives digital, and the development of the web, which is transforming the ways of researching and purchasing fashion products.
Changes that are penalizing precisely those ranges of accessible quality, the Beautiful and Well Done, more typical of the Italian fashion offer; on the one hand, in fact, low cost and fast fashion demand paradigms governed by competitors who have control of the distribution channels (Spain) are prevailing and, on the other, the high-end, market segment dominated by French companies .
The signs of difficulty of the Italian offer are evident in comparison with the performance of the main European competitors; in 2013-2015 Italian exports grew less than both French and Spanish ones (Fig.2). Furthermore, the growing difficulties on foreign markets are also leaving their mark on the financial statements of companies which in 2015 experienced, in contrast with what was observed for the manufacturing industry, a marked weakening of growth and a cross-cutting deterioration in margins and income results to all size classes. The slowdown in demand in some important markets and the simultaneous intensification of competition have had a significant impact above all on the income performance of the largest companies (turnover exceeding 50 million euros), most active abroad, which probably have tried to move upstream along the production chains the lost margins.
In the next few years, in the face of a strengthening of global demand for fashion products, it will be a priority for the sector to build a product positioning suitable for intercepting new needs and new segments of foreign demand, also enhancing the stages upstream of the supply chain (textiles and leather goods). , unique in terms of size and quality of supply among advanced countries, and often at the very origin - for what may seem a paradox - of the competitiveness of foreign competitors in the high-end segments, for which Italy represents a fundamental production platform .
Therefore, the Italian fashion system starts from a very important position. It boasts an offer of great quality and range, focused on the Beautiful and Well Done segment, manufacturing excellence to be defended abroad by organizing strategies compatible with the demand scenarios of individual countries. Therefore, the prospects for the development of foreign sales of the Italian fashion system will be increasingly linked to the ability of individual companies to select individual markets, investing in the correct quality-price ratio, the offer of services and new distribution methods (which integrate the physical channels with online, from an omnichannel perspective).
Only in this way will they be able to recover competitiveness in mature markets and intercept the growing demand of the new wealthy class of emerging countries.
