The Future of Chinese Fashion

The Future of Chinese Fashion

Over the last decade China’s fashion industry has changed tremendously. With rising disposable incomes and urbanisation and an increase in domestic consumption – demand for apparel has increased substantially.

China’s demand for fashion and accessories is expected to continue to expand and become increasingly sophisticated in the future. China already has thriving domestic brands, including single brand stores such as Ochirly (‘European Fashion Charm’), and shoe brands such as Belle, Li Ning and Anta.

The full range of Western brands is not yet represented in China, despite an appetite for Western style. Over the last two decades, sports brands Nike and Adidas have enjoyed big sales in this market. From 2006-9, Nike grew from 1,400 to 6,000 stores.

Changing consumer tastes mean that locals are moving away from a dependence on sports and casual wear.

In 2008, around a quarter of the value of clothes in a Chinese wardrobe would be sportswear, even though Chinese consumers play sports only once per week. In the US, only around 10-15% of clothes are sportswear despite higher participation in sport.

Chinese consumers are now moving towards a lifestyle where there are more occasions demanding formal or fashionable attire. The range of social activities on offer is expanding, with more consumers choosing to go to nightclubs or travel overseas and having a view that different outfits are required for these situations.
This creates opportunities for a wider range of apparel brands to enter the market.

There are also demographic trends at work. Younger consumers seem to be spending more on fashion. Those between 20-35 spend the highest proportion of their income on clothing, and there’s also evidence that women are starting to spend more on fashion than men. This reflects a similar trend seen in developed markets where women spend a higher proportion of their income on clothing compared to their male peers.

Western style still influential

At haute couture level, fashion has always been an international concept. Many of the most successful top designers (such as Uma Wang and Qiu Hao) are straddling East and West, exhibiting in both. Masha Ma has several boutiques in Shanghai but also shows her collections at Paris Fashion Week. Despite the growing recognition of these elite dressmakers, China’s wealthiest customers remain captive to foreign luxury brands.

Although Chinese consumers seem to becoming increasingly fashion-conscious and differentiated, native brands are not quite leading the way as China’s consumers show an increasing hunger to dress fashionably.

“I see a lot of pretty things in China”, said Anna Wintour, editor-in-chief of Vogue, “but nothing I could call ‘modern Chinese style’ has emerged yet”. Many Chinese designers that are gaining attention are trained in Europe, often at Central St. Martins. This is helping Chinese talent gain attention in the West but it perhaps isn’t helping an identifiable style to emerge from China itself.

But just as in any country, it’s not the top designers that make the most sales. China’s mid-market is where the fastest growth is anticipated. In 2010, the fashion market in China was worth about RMB 400 billion. By 2020, it’s thought this industry could be worth RMB 1.3 trillion.

China’s own brands

Metersbonwe is China’s equivalent to H&M; found on almost all high streets and responsible for dressing more people than all China’s London-educated elite fashion designers put together.

A few years ago Metersbonwe expressed ambitions to expand into Western capitals such as New York and London, although this has yet to happen. With Chinese consumer goods manufacturers such as Haier and Lenovo establishing themselves as household names in the West, despite this once seeming an impossible task, it seems logical that large fashion retailers would attempt the same.

However, Metersbonwe has had a tough time recently as it struggles to compete with online marketplaces on price.

At the slightly pricier end of the high street, China has Zuczug and JNBY. Zuczug aims to appear to the wealthier shopper, with JNBY offering lower prices but a similar high-fashion approach comparable perhaps to French Connection. Zuczug incorporates local elements into its collections, such as the traditional sleeve protectors used when cooking.

JNBY has had some success expanding overseas, with branches in New Zealand as well as Canada. Both brands are enjoying good domestic sales, defying the assumption that China’s fashion trends are defined solely by foreign luxury brands such as Louis Vuitton. Although domestic brands have faced the prejudice, at home as well as abroad, as being cheap and low-quality, these are designers defying that belief.

Opportunities for global brands

There are opportunities for European and North American brands to find ways to meet new emerging needs, particularly of female middle class consumers.

It’s likely that the market for stylish yet affordable clothing is going to a massive area of opportunity in China.

This opens doors for high street clothing brands that have successfully catered to the mid market elsewhere. Marks and Spencer have enjoyed some successes selling online via Tmall. The respected UK brand had to revise its Chinese presence considerably but now is in a position where a quarter of a million Chinese shoppers visit their Tmall site weekly. Womenswear, especially dresses, sells particularly well.

Outdoor clothing range North Face has enjoyed some growth in China thanks to a campaign focused on encouraging Chinese people to explore the natural world by running crazy competitions. In the ‘Next Explorer’ campaign, the brand put local customers into a high rain and wind environment dubbed ‘the torture room’ to test their clothing. Running across print, TV and digital media the campaign drew many thousands into the brand’s online community. North Face responded to the needs of the local audience by introducing ‘Asian fit’, recognising the smaller body shape of many local customers. That’s a smart move; it’s thought that one of the reasons H&M’s Chinese venture initially performed badly is that the clothes it sold were simply too big for local shoppers.

Despite the high number of counterfeit brand products available locally, North Face have focused on developing the outdoor culture, and bringing the brand story to the consumers, in the hope of educating them on why counterfeit products are likely to be less effective because they is less waterproof etc. The issue of counterfeiting remains a challenge for organisations trying to build brand profile in the country.

Branding and positioning are key to achieving success in China.

In their detailed report into the future of China’s fashion market, the Boston Consulting Group identify that fashion brands need to find ways to strike an emotional chord with their customers.

With Chinese society strongly emphasising the pursuit of success – creating aspirational brands will support the consumer’s need to feel good about themselves or enhance their self worth. There’s huge potential for brands that can achieve the right emotional connection with their audience in China’s new fashion boom.

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