Overview of the Fashion industry in China
The fashion industry in China has been flourishing and changing for the past decade and is continuing to expand at an exponential rate. With the rapid urbanization and the increasing spending power of the population, markets for both high-tier and low-tier clothing are rapidly growing. From the statistics from Daxue Consulting, by 2020, total fashion sales in China are expected to triple its current amount, rising to more than 1.3 trillion RMB($200 billion USD) from 398 billion RMB ($60 billion USD) in 2010. With its surging economic growth, China displays to the world its potential to be the largest consumer market for the fashion industry in the next following years. The fluctuation of overseas brands in Chinese markets.
The fluctuation of Overseas Brands in Chinese Markets
Because of the improving living conditions of the middle-class as well as the growing international awareness, Chinese consumers have become highly brand conscious and the possession of luxury products is seen as a status symbol. According to a recent study conducted by Daxue, mainland China ranked sixth in the world for the expenses on luxury goods ranked by countries, and in 2010, it was a US$17.7 billion market where Louis Vuitton, Chanel, and Gucci remain the most desired luxury brands. However, in recent years, especially for 2014 and 2015, traditional luxury brands are losing favor among Chinese consumers while the so-called “light luxury” brands have begun to gain favor instead. In 2014, luxury consumption in the mainland market by Chinese consumers dropped to 11% percent year-on-year to $25 billion. The government’s anti-graft campaign has formed a more economical and rational climate among the people. And the emerging trend of buying Western brands, especially for luxury brands; buying overseas from brokers also contributes to the dropping consumption of luxuries in mainland China. Yet, luxury purchases made by Chinese consumers in the global market still remain powerful as 76% of Chinese luxury consumption was made outside the country. Asides from luxuries, fast fashion companies such as H&M, Zara, Uniqlo, etc has managed to maintain a good momentum and are still popular amongst the young population in China.
The developing E-retail Markets in Fashion Industry in China
Chinese e-commerce is dominated by a few domestic giants, including Alibaba, Tencent (in Chinese: 腾讯) and Baidu. Fashion is one of China’s biggest e-commerce category. Most of the apparel purchased online proceeds on Taobao. With the cheaper price, diverse designs, and being much more convenient, shopping online has become the first choice for most of the population. It is worth mentioning that the development of e-commerce in the fashion industry has prompted the domino effect of instant celebrities on the social media network. The fashion style they led has greatly influenced young people, resulting in some of them creating their own brand and starting to sell clothes on Taobao. Thanks to the rise of e-retail, domestic designs can finally gain a foothold in the fashion markets. Alibaba as of lately launched a new platform called “Tmall Global” (in Chinese天猫), which is a channel covering the purchase of overseas products. As the e-retail markets have been growing and developing rapidly in mainland china, the fashion industry will be more promising in the next decade.
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