Dutch news media Het Financieele Dagblad recently published a big review of Portuguese textile market — “Made in Portugal: The Rise of a Textile Country”. And we thought — why not to refocus this article and to delve into the textile and clothing market in Portugal but as a potential niche for startups. This exploration revealed a pretty good opportunity, characterized by continuous growth, robust export capabilities, and a reputation for quality and sustainability.
As we venture into new vertical here on Startupt of exploring potential markets for startups, Portugal’s textile and clothing industry will be the first one. New vertical — “Why Not to Try?” — will explore the industries, niches, markets for those who think about how and where to start.
Sustainability and Innovation
But first — a short summary of that article from Het Financieele Dagblad.
Portugal has preserved its textile industry, unlike many other European countries, making it a hub for sustainable production. The proximity to European markets and the emphasis on sustainable and ethical production practices are significant advantages. Companies like Tintex and Adalberto Textile Suppliers are pioneers in sustainable dyeing and innovative textile solutions, catering to the growing demand for eco-friendly products.
The article highlights several key areas where Portugal excels in sustainability and innovation:
- Sustainable Dyeing Techniques: Tintex has been at the forefront, focusing on natural dyeing techniques. Since 2018, they have launched paints made from thyme, chestnut, and gambir plants, which use 30% less dye than synthetic alternatives. This not only reduces the environmental impact but also makes water purification and reuse easier.
- Digitalization and Innovation: Citeve, a textile innovation center in Northern Portugal, is promoting the use of digital passports for textiles. These passports provide detailed information about the origin, energy consumption, and water usage of materials, enhancing transparency and sustainability.
- Cooperative Models: To further sustainability, Portuguese companies are forming cooperatives. For example, sustainable yarn spinners are collaborating with fabric printing factories to create a more integrated and eco-friendly production process.
- Reduced Resource Use: Adalberto Textile Suppliers has implemented smart machines that optimize moisture, temperature, and speed during fabric dyeing. This has led to a 15% reduction in water usage per kilogram of fabric and a two-thirds reduction in CO2 emissions.
- Quality and Proximity: Brands like Mr Marvis highlight the benefits of nearshoring to Portugal, including lower transportation costs, better quality control, and the ability to maintain production even during global disruptions like the COVID-19 pandemic.
Market Dynamics and Growth
So, let’s have a closer look at the industry.
The real per capita consumer spending on clothing and footwear in Portugal is projected to rise significantly between 2024 and 2029, with a total increase of $220.6 USD, marking a 20.91% growth. By 2029, this spending is expected to reach a new peak of $1,275.5 USD per capita. This trend signals a strong consumer demand, which startups can capitalize on.
The retail trade revenue index for textiles, clothing, footwear, and leather goods has seen a steady increase from January 2022 to April 2024, peaking at 153.9 in April 2024. This growth trajectory highlights a resilient market, with January 2022 recording the lowest value at 118.1.
Portugal hosts a vibrant ecosystem of fashion tech startups, with notable names like Smartex, PlatformE, Josefinas, Endutex, and Girissima leading the way. The fashion industry is 21st among startups registered on f6s.com. And according to Tracxn, there are 104 Fashion Tech startups in Portugal by the date.
Consumer Behavior and Online Market
Online purchasing trends indicate a significant market for clothing, with 56% of Portuguese consumers listing clothing as their top online purchase category in 2024 (via 2024 Statista’s report). This is supported by the continuous growth in the variety of products available online, providing a fertile ground for e-commerce ventures.
Revenue and Industry Stability
The Textiles, Clothing, Footwear & Household Goods Wholesaling industry in Portugal generated €15.5 billion in 2024, ranking 19th in Europe. This sector has shown low revenue volatility over the past five years, with an average annual change of 2.0%. The average revenue per enterprise stands at €1.4 million, indicating a stable and lucrative market for new entrants.
The clothing manufacturing industry, valued at €3.8 billion in 2024, encompasses 9,593 businesses and has experienced moderate growth at a CAGR of 3.0% from 2019 to 2024. Major players include LVMH Moët Hennessy Louis Vuitton SE, Industria de Diseño Textil SA, and Giorgio Armani SpA. The industry’s competitive landscape is moderate but intensifying, offering a balanced environment for startups.
Export Capabilities
Despite a 5.6% decline in textile exports in 2023, Portugal maintained a substantial turnover of €5.753 billion. Noteworthy is the 5% increase in woven apparel exports, indicating potential areas of growth. Key export markets include Morocco, Canada, Poland, Romania, and Saudi Arabia.
Five Reasons to Start a Textile and Clothing Startup in Portugal
- Growing Consumer Spending: The forecasted increase in per capita spending on clothing and footwear indicates a strong and growing market.
- Stable Revenue Growth: The low volatility in revenue and steady market size growth offer a stable environment for new businesses.
- Innovative Ecosystem: A vibrant startup scene with numerous fashion tech companies fosters innovation and collaboration.
- Sustainability Focus: Portugal’s reputation for sustainable and ethical production attracts conscious consumers and brands.
- Strategic Location: Proximity to major European markets and efficient logistics enhance market accessibility and reduce costs.
Five Startup Ideas for the Portuguese Textile and Clothing Market
- Sustainable Fashion Line: Develop a brand focused on eco-friendly materials and sustainable production practices, leveraging Portugal’s expertise in sustainable textiles.
- Customizable Clothing Platform: Create an online platform that allows customers to design and customize their clothing, tapping into the trend of personalized fashion.
- Smart Textiles: Innovate in the smart textiles space with clothing that incorporates technology for health monitoring, fitness tracking, or enhanced comfort.
- Textile Recycling Solutions: Establish a business focused on textile recycling and upcycling, addressing the EU’s upcoming recycling regulations.
- Fashion E-commerce Marketplace: Launch an e-commerce marketplace that highlights Portuguese brands and their sustainable practices, catering to the global demand for ethical fashion.
Image credits: Ksenia Chernaya / Pexels