Page 288 - 2018 White Paper on the Business Environment in China
P. 288
8 White Paper on the Business Environment in China
Fashion Industry successfully catered to the mid market elsewhere. Marks
and Spencer has enjoyed some successes selling online via
The fashion industry in China has been flourishing and Tmall. The respected U.K. brand had to revise its Chinese
changing for the past decade and is continuing to expand presence considerably but now is in a position where a
at an exponential rate. With the rapid urbanization quarter of a million Chinese shoppers visit their Tmall site
and the increasing spending power of the population, weekly. Womenswear, especially dresses, sells particularly
markets for both high- and low-end clothing are rapidly well. Branding and positioning are key to achieving
growing. According to Daxue Consulting, by 2020, total success in China. In their detailed report into the future
fashion sales in China are expected to triple its current of China’s fashion market, the Boston Consulting Group
amount, rising to more than 1.3 trillion yuan from 398 identifies that fashion brands need to find ways to strike
billion yuan in 2010 (Daxue, Fashion). an emotional chord with their customers. With Chinese
society strongly emphasizing the pursuit of success –
Major companies have been adopting sustainability creating aspirational brands will support the consumers’
concepts and tools to improve management and need to feel good about themselves or enhance their self
transform corporate culture. Research has found that worth. There’s huge potential for brands that can achieve
sustainability practices within the private sector not the right emotional connection with their audience in
only help cut costs, but also strengthen brand loyalty, China’s new fashion boom (TranslateMedia).
employee morale and product innovation. The Chinese
leadership recognizes the urgency of environmental The Chinese fashion market is expected to be
protection and has incorporated “green development” in responsible for 30 percent of the total global fashion
the latest 13th Five Year Plan, the government’s guiding market growth in 2017 and is set to become the world’s
development targets. Nonetheless, it takes more than second biggest market by 2020. While fashion brands
government directives to achieve ambitious emission used to focus on China’s biggest, first-tier cities, nowadays
reduction goals. Business has to play an integral role with the increase of the middle class’s purchasing power,
(Song, In China). companies are targeting second-tier cities across the
country. China has become more multi-layered over the
“The Chinese consumer market is promising, not only last decade. There are of course the top-level buyers, the
because of its volume, but also because local consumers middle class and interestingly there’s the newer wealth
are very reactive, enthusiastic about new things and developing in second- and third-cities (Gentlemen,
sensitive to brands and quality,” said Andrea Boragno, Chinese Social).
CEO and Chairman of Alcantara, which makes a leather
substitute used in fashion and accessories, automotive China’ fashions industry has changed tremendously
interiors and consumer electronics. According to Boragno, over the past decade. With rising disposable incomes and
Chinese designers have made strides in recent years by urbanization and an increase in domestic consumption
shifting from copying to developing their own identities – demand for apparel has increased substantially.
based on creativity and culture. More than 200 colleges China’s demand for fashion and accessories is expected
and universities in China now offer design-related majors, to continue to expand and become increasingly
preparing fashion aficionados for jobs in the industry. The sophisticated in the future. China already has thriving
industry has also attracted talented designers who have domestic brands, including single brand stores such as
returned from studying and working abroad, including Ochirly and shoe brands such as Belle, Li Ning and Anta.
those who have worked for world-renowned luxury brands The full range of Western brands is not yet represented
such as Celine and Burberry. “As China joins the global in China, despite an appetite for Western style. Over the
‘fashion family’, the industry can take advantage of more last two decades, sports brands Nike and Adidas have
resources worldwide,” Zhang said. (Song, From Imitation). enjoyed big sales in this market. From 2006-2009, Nike
grew from 1,400 to 6,000 stores. Chinese consumers are
There are opportunities for European and North now moving toward a lifestyle where there are more
American brands to find ways to meet new emerging occasions demanding formal or fashionable attire. The
needs, particularly of female middle-class consumers. It’s range of social activities on offer is expanding, with more
likely that the market for stylish yet affordable clothing consumers choosing to go to nightclubs or travel overseas
is going to a massive area of opportunity in China. This and having a view that different outfits are required for
opens doors for high-street clothing brands that have these situations. There are also demographic trends at
288
Fashion Industry successfully catered to the mid market elsewhere. Marks
and Spencer has enjoyed some successes selling online via
The fashion industry in China has been flourishing and Tmall. The respected U.K. brand had to revise its Chinese
changing for the past decade and is continuing to expand presence considerably but now is in a position where a
at an exponential rate. With the rapid urbanization quarter of a million Chinese shoppers visit their Tmall site
and the increasing spending power of the population, weekly. Womenswear, especially dresses, sells particularly
markets for both high- and low-end clothing are rapidly well. Branding and positioning are key to achieving
growing. According to Daxue Consulting, by 2020, total success in China. In their detailed report into the future
fashion sales in China are expected to triple its current of China’s fashion market, the Boston Consulting Group
amount, rising to more than 1.3 trillion yuan from 398 identifies that fashion brands need to find ways to strike
billion yuan in 2010 (Daxue, Fashion). an emotional chord with their customers. With Chinese
society strongly emphasizing the pursuit of success –
Major companies have been adopting sustainability creating aspirational brands will support the consumers’
concepts and tools to improve management and need to feel good about themselves or enhance their self
transform corporate culture. Research has found that worth. There’s huge potential for brands that can achieve
sustainability practices within the private sector not the right emotional connection with their audience in
only help cut costs, but also strengthen brand loyalty, China’s new fashion boom (TranslateMedia).
employee morale and product innovation. The Chinese
leadership recognizes the urgency of environmental The Chinese fashion market is expected to be
protection and has incorporated “green development” in responsible for 30 percent of the total global fashion
the latest 13th Five Year Plan, the government’s guiding market growth in 2017 and is set to become the world’s
development targets. Nonetheless, it takes more than second biggest market by 2020. While fashion brands
government directives to achieve ambitious emission used to focus on China’s biggest, first-tier cities, nowadays
reduction goals. Business has to play an integral role with the increase of the middle class’s purchasing power,
(Song, In China). companies are targeting second-tier cities across the
country. China has become more multi-layered over the
“The Chinese consumer market is promising, not only last decade. There are of course the top-level buyers, the
because of its volume, but also because local consumers middle class and interestingly there’s the newer wealth
are very reactive, enthusiastic about new things and developing in second- and third-cities (Gentlemen,
sensitive to brands and quality,” said Andrea Boragno, Chinese Social).
CEO and Chairman of Alcantara, which makes a leather
substitute used in fashion and accessories, automotive China’ fashions industry has changed tremendously
interiors and consumer electronics. According to Boragno, over the past decade. With rising disposable incomes and
Chinese designers have made strides in recent years by urbanization and an increase in domestic consumption
shifting from copying to developing their own identities – demand for apparel has increased substantially.
based on creativity and culture. More than 200 colleges China’s demand for fashion and accessories is expected
and universities in China now offer design-related majors, to continue to expand and become increasingly
preparing fashion aficionados for jobs in the industry. The sophisticated in the future. China already has thriving
industry has also attracted talented designers who have domestic brands, including single brand stores such as
returned from studying and working abroad, including Ochirly and shoe brands such as Belle, Li Ning and Anta.
those who have worked for world-renowned luxury brands The full range of Western brands is not yet represented
such as Celine and Burberry. “As China joins the global in China, despite an appetite for Western style. Over the
‘fashion family’, the industry can take advantage of more last two decades, sports brands Nike and Adidas have
resources worldwide,” Zhang said. (Song, From Imitation). enjoyed big sales in this market. From 2006-2009, Nike
grew from 1,400 to 6,000 stores. Chinese consumers are
There are opportunities for European and North now moving toward a lifestyle where there are more
American brands to find ways to meet new emerging occasions demanding formal or fashionable attire. The
needs, particularly of female middle-class consumers. It’s range of social activities on offer is expanding, with more
likely that the market for stylish yet affordable clothing consumers choosing to go to nightclubs or travel overseas
is going to a massive area of opportunity in China. This and having a view that different outfits are required for
opens doors for high-street clothing brands that have these situations. There are also demographic trends at
288
