[ad_1]
Overview
The Chinese economy continues dynamic performance, an average of 10% growth for the last 5 years. As barriers are reduced, more and more companies to consider their entry into China. This is in an effort to capture some percentage of returns generated by China’s 1.3 billion consumers.
This series of reports is designed to provide retail fashion, which is planning to enter China for the first time, overlooking the Chinese fashion industry. In addition, work reports as a quick update for companies that have already entered China as it touches on industry development, brands available, wholesale and retail, brand clothes crop picked, consumer behavior and updated regulations. A key challenge when in China’s different regions in China. Consumer behavior and preferences for food, fashion and lifestyle vary significantly in these areas. For example, retailers should not assume that goods or fashion style selling in Shanghai will also be popular in Xiamen, which is in southern China
The series of reports are :.
Report 1 Overview of China Fashion Industry
Report 2 regulations: an overview of the regulatory environment in China
Report 3 Regional Analysis Analysis of the major regions in China from the retail perspective
Report Fashion 4 women and Consumer Behaviour
Fashion Report 5 Teen and Consumer Behaviour
Report Fashion 6 Children and Consumer Behaviour
Report Fashion 7 men and Consumer Behaviour
Report 8 recommendations
economic situation in China
China’s economy grew by 10.2% in 2005 and 10.7% in 2006, making it the fastest growing major economy in the world . It is predicted banks (Bank periodic reports) that GDP would fall 8% in China in 2007. (Goldman Sachs), but in our view GDP ratio may be higher because of the increased production and consumption. In 2006, China grew Urban Living expenses at a higher rate than GDP, both at national and provincial level. Despite strong growth, inflation remains moderate with monthly inflation averaged 1.3% year on year from January to September 2006. It is predicted that the annual growth in consumer prices will reach 1.8% in early 2007. This is because higher land prices would affect production. Increased investment would then feed inflationary pressures.
tolerance government greater yuan volatility and higher GDP has caused expectations of further currency reforms, which would lead to faster wear. Potential was foreign clothing brand would find that their prices may be more readily accepted in the Chinese market.
Retail Industry in China
extra income in China and government efforts to encourage consumer spending have resulted in increased domestic consumption. Statistics show that total retail sales of consumer goods increased by 12.5% to RMB 6718 billion in 2005. However, it drops slightly to about RMB 6400 billion (US $ 770b) in 2006. One of the factors is the import quotas imposed by the US and European Union in 2006 (O & L). However, with the increase in income and domestic consumption, it is expected that the growth of retail can hold about 10% over the next 5 years (O & L projection & Goldman Sachs Global Investment Report)
China Apparel market has been growing at 7% and is now a USD40 billion industry. Department stores account for about 40% of the market. This includes stores like Parkson, Shanghai Bailian and foreign brands such as Wal-Mart. Apparel brands sold in this department stores, both international brands such as Hugo Boss and local brands like Li Ning, Borne, Joe One. Franchise chains and local unique clothing stores in China accounted for the 60% stake.
profit margins for retailers in China are high. Because of the lower cost of production in China, profit margins for these clothing brands can be as high as 50.5% for brands like Giordano (2005) and interfaces (70.4% in 2005). The cities influence the fashion in China are Shanghai, Beijing and Guangzhou. In addition, locals and tourists travel to Guangzhou, Shanghai, Shenzhen for major fashion brands at cheaper prices. For production, there are different areas of specialty. For example, Ningbo is famous for the production of bags but especially Guangdong Guangzhou is famous for apparels.
Different Regions in China
Due to the geographical enormity China and a major change of economic development between cities, market potential vary from city to city. The table below shows the difference in GDP per capita, where wealth is located in the coastal cities. Cities are classified into tiers based on population and GDP, population, Shanghai, Beijing and Guangzhou Tier 1 cities. Report 3 examines in detail the regional differences in the Chinese fashion industry
Fashion Industry in China
markets
Originally there were two markets for apparel in China .:
1. low price basic apparel sold under brands Croatia and offered in Chinese department stores, foreign hypermarkets or a small family owned specialty chains
2. luxury brand sold either franchised stores or upscale department stores.
Due to the rapid growth of China’s middle class, a new class has emerged, which includes quality brands, both Chinese and foreign, sold in department stores and specialty stores. Consumers in China’s middle class are increasingly complex, demanding higher quality, diversity and innovation of their retailers. The new category is very fragmented and dominated by specialty casual brand from Hong Kong, such as Esprit (514 stores), Giordano (644) stores, Baleno (980 stores) and Glorious Sun (1076 stores). The new segment has significant growth potential as it is affordable to the middle class and positioned at a price point slightly higher than local brands. Prices of clothing has fallen slightly in 2006. This is due to increased competition in the fashion industry in China (O & L, 2006).
In recent years, not only increase Hong Kong local Chinese clothing brands and international brands but also increase foreign brands. These types can be among the big chains that are well established in their countries but not out of their countries. Examples Singaporean chains like Samuel and Kevin. In addition, there are brands that are created due to the popularity of other brands. Examples clothing brand, Fish, China has spawned other similar species like 3 fish, fish and so on.
Expansion in second tier cities
The retail market is beginning to reach maturity in Tier 1 cities such as Shanghai. Thus, the need to accurately target specific groups of consumers much more in these areas. As a result, retailers are increasingly expanding into second and third tier cities like Chengdu, Nanping, Tianjin. The main brands like Jean West has now gone to secondary and third tier cities as well. The attractiveness of these upper regions is increased by migration from rural to regional cities, increasing the size of the second and third tier urban retail market. This would be implemented in subsequent reports.
Consumer Attitudes to Brands
Consumers are very brand conscious and the fact that one can afford these products are seen as a status symbol. Luxury brands like LV, Christian Dior, are often sought to purchase clothing and cosmetics. For many areas, particularly younger consumers, foreign brands that are well known are still considered better seen as a status symbol. Species that are made in the US and Europe are more highly valued than those from Australia, and other Asian countries like Singapore, Taiwan. Because of the high prices, there are also a lot of high end counterfeit clothing and shoes brand in China.
attitude to the national brand has changed as stated-owned companies have been privatized and produce better quality products. Brands like Borne, Li Ning, Hong Guo are very popular locally. Hong Kong brands like Giordano are also popular, although market share has continued to decline. Pride in the achievements the nation has resulted in many consumers preferring local brands, all other things being equal. This would be further elaborated in subsequent reports
Consumer Attitudes to prices
Although Chinese consumers are price sensitive, a recent survey shows that consumers are increasingly concerned about product quality and customer service, particularly with regard to clothing. Accordingly, these factors should focus on advertising and promotional materials.
[ad_2]