Page 290 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
work. Younger consumers seem to be spending more Pacific region, China lead all other countries when it came
on fashion. Those between the age of 20 to 35 spend to fashion purchases, with around 62 percent transactions
the highest proportion of their income on clothing, and via online marketplaces (Gentlemen, The Fashion).
there’s also evidence that women are starting to spend
more on fashion than men. This reflects a similar trend Luxury Goods
seen in developed markets where women spend a higher
proportion of their income on clothing compared to their 2016 was a bad year for many companies selling
male peers (TranslateMedia). Asides from luxuries, fast expensive fashion, handbags, and jewelry. For the first
fashion companies such as H&M, Zara, and Uniqlo have time since the financial crisis of 2008, the global market
managed to maintain momentum and are still popular for personal luxury goods failed to grow, stalling at
amongst the younger consumer population in the €249 billion (about $258 billion). The good news is that
country (Daxue). 2017 should see a return to growth, according to Bain
& Company, only it won’t look anything like the boom
“The internet has enabled consumers to have years from 2010 to 2015, when global sales of such goods
their own definitions of ‘fashion’ and allowed them to jumped 45 percent, fueled by Chinese consumers with
participate in design,” said Chen Dapeng, Vice Director high-end appetites. The slowing of China’s economy
of China National Textile and Apparel Council. “Fashion and its government’s ongoing crackdown on corruption,
is becoming more and more personalized.” Unlike in paired with turmoil in the U.S. and Europe from Brexit,
France or Italy, China’s fashion industry took off around terrorism, and the U.S. presidential election, have created
the same time as the development of the Internet, which a “new normal” of low single-digit growth and intense
made it easier for industry insiders to have an “Internet competition. The “clear winners and losers,” Bain said, will
mindset” and computer skills. According to Chen, be determined by which brands can read the field and
technology will help fashion designers with tailored respond best. China is at the center of this shift. Today,
marketing and flexible production, making personalized Chinese shoppers account for 30 percent of all sales of
customer experiences possible (Song, From Imitation). personal luxury goods. Exane BNP Paribas echoed the
A few domestic giants including Alibaba, Tencent, and thought in research note to clients. “The peak of the
Baidu dominate Chinese e-commerce, and fashion is one largest nationality wave ever to benefit luxury goods
of the country’s biggest categories. Most of the apparel is behind us,” the authors wrote. “Brands need a new
purchased online are on Taobao. With the cheaper price, paradigm, other than opening more stores in China and
diverse designs, and being much more convenient, bumping up prices.” The period luxury is entering could
shopping online has become the first choice for most of see some of its slowest growth since it started opening
the population. up to a mass audience around 1994. That was the year,
D’Arpizio noted, that “the jeweler of kings and queens,”
It is worth mentioning that the development of Cartier, launched its first lower-priced line for mainstream
e-commerce in the fashion industry has prompted the consumers. Other brands followed in search of greater
domino effect of instant celebrities on the social media sales, and names “like Gucci, Prada, also Bvlgari were
network. The fashion style they led has greatly influenced really growing, doubling size every year, sometimes
young people, resulting in some of them creating their triple-digit growth rates, opening up to 60 stores every
own brand and starting to sell clothes on Taobao (Daxue, year and covering all the capitals across the globe,” she
Fashion). According to one survey, 58 percent of internet said (Bain).
users in China preferred to purchase clothes, apparel and
accessories online, more than 30 percent higher than the In China, consumers started buying again in their
internet users located in Singapore, which is the next home market, but that was not enough to offset a dip in
closest market studied. This trend will definitely prove purchases by Chinese travelers abroad. A key factor in this
beneficial for the global digital industry and especially the shift is tighter customs controls to limit foreign shopping
fashion industry as the mobile payment infrastructure can in an effort to fight the “grey market” of unauthorized
be utilized by brands entering the market. These findings sales and stimulate domestic consumption. As a result,
match with additional e-commerce research conducted China’s overall share of global luxury goods purchases
by the American firm Visa in 2015. In the study led by the declined slightly from 31 percent to 30 percent. China,
company, which examined the digital share of purchases however, will remain a growth engine for luxury goods
made in selected categories among shoppers in the Asia- as the country’s middle class continues to grow in size
290
work. Younger consumers seem to be spending more Pacific region, China lead all other countries when it came
on fashion. Those between the age of 20 to 35 spend to fashion purchases, with around 62 percent transactions
the highest proportion of their income on clothing, and via online marketplaces (Gentlemen, The Fashion).
there’s also evidence that women are starting to spend
more on fashion than men. This reflects a similar trend Luxury Goods
seen in developed markets where women spend a higher
proportion of their income on clothing compared to their 2016 was a bad year for many companies selling
male peers (TranslateMedia). Asides from luxuries, fast expensive fashion, handbags, and jewelry. For the first
fashion companies such as H&M, Zara, and Uniqlo have time since the financial crisis of 2008, the global market
managed to maintain momentum and are still popular for personal luxury goods failed to grow, stalling at
amongst the younger consumer population in the €249 billion (about $258 billion). The good news is that
country (Daxue). 2017 should see a return to growth, according to Bain
& Company, only it won’t look anything like the boom
“The internet has enabled consumers to have years from 2010 to 2015, when global sales of such goods
their own definitions of ‘fashion’ and allowed them to jumped 45 percent, fueled by Chinese consumers with
participate in design,” said Chen Dapeng, Vice Director high-end appetites. The slowing of China’s economy
of China National Textile and Apparel Council. “Fashion and its government’s ongoing crackdown on corruption,
is becoming more and more personalized.” Unlike in paired with turmoil in the U.S. and Europe from Brexit,
France or Italy, China’s fashion industry took off around terrorism, and the U.S. presidential election, have created
the same time as the development of the Internet, which a “new normal” of low single-digit growth and intense
made it easier for industry insiders to have an “Internet competition. The “clear winners and losers,” Bain said, will
mindset” and computer skills. According to Chen, be determined by which brands can read the field and
technology will help fashion designers with tailored respond best. China is at the center of this shift. Today,
marketing and flexible production, making personalized Chinese shoppers account for 30 percent of all sales of
customer experiences possible (Song, From Imitation). personal luxury goods. Exane BNP Paribas echoed the
A few domestic giants including Alibaba, Tencent, and thought in research note to clients. “The peak of the
Baidu dominate Chinese e-commerce, and fashion is one largest nationality wave ever to benefit luxury goods
of the country’s biggest categories. Most of the apparel is behind us,” the authors wrote. “Brands need a new
purchased online are on Taobao. With the cheaper price, paradigm, other than opening more stores in China and
diverse designs, and being much more convenient, bumping up prices.” The period luxury is entering could
shopping online has become the first choice for most of see some of its slowest growth since it started opening
the population. up to a mass audience around 1994. That was the year,
D’Arpizio noted, that “the jeweler of kings and queens,”
It is worth mentioning that the development of Cartier, launched its first lower-priced line for mainstream
e-commerce in the fashion industry has prompted the consumers. Other brands followed in search of greater
domino effect of instant celebrities on the social media sales, and names “like Gucci, Prada, also Bvlgari were
network. The fashion style they led has greatly influenced really growing, doubling size every year, sometimes
young people, resulting in some of them creating their triple-digit growth rates, opening up to 60 stores every
own brand and starting to sell clothes on Taobao (Daxue, year and covering all the capitals across the globe,” she
Fashion). According to one survey, 58 percent of internet said (Bain).
users in China preferred to purchase clothes, apparel and
accessories online, more than 30 percent higher than the In China, consumers started buying again in their
internet users located in Singapore, which is the next home market, but that was not enough to offset a dip in
closest market studied. This trend will definitely prove purchases by Chinese travelers abroad. A key factor in this
beneficial for the global digital industry and especially the shift is tighter customs controls to limit foreign shopping
fashion industry as the mobile payment infrastructure can in an effort to fight the “grey market” of unauthorized
be utilized by brands entering the market. These findings sales and stimulate domestic consumption. As a result,
match with additional e-commerce research conducted China’s overall share of global luxury goods purchases
by the American firm Visa in 2015. In the study led by the declined slightly from 31 percent to 30 percent. China,
company, which examined the digital share of purchases however, will remain a growth engine for luxury goods
made in selected categories among shoppers in the Asia- as the country’s middle class continues to grow in size
290
