1. Market Overview
China’s 1.4 billion people form a huge clothing consumer market, and the scale is expanding year by year. According to data from the National Bureau of Statistics, in 2021, enterprises above designated size in the garment industry have completed a total of 22.373 billion pieces of clothing, a year-on-year decrease of 7.7%; enterprises above designated size achieved a cumulative operating income of 1,369.726 billion yuan (RMB, the same below), a year-on-year decrease of 11.34%. The Covid-19 pandemic has reduced domestic demand and increased costs, hitting the apparel industry. However, the China Business Industry Research Institute predicts that the market is still optimistic in 2022, and the scale will grow to 2.4 trillion yuan.
From the perspective of the entire industry, China’s clothing brands have formed two new camps due to changes in the market consumption structure. The first camp is high-end clothing brands. These consumers are high-income groups. Their spending power on luxury goods and high-end brands is growing, and they also pay more attention to clothing quality and shopping experience. The second is the clothing sales camp that takes the popular route, such as Uniqlo and ZARA, which integrates affordable and fashionable designs, which are especially favored by young consumers.
Women’s clothing market: Affected by the epidemic, according to Euromonitor data, the size of China’s women’s clothing market in 2021 fell by 11.0% over the previous year to 940.7 billion yuan. Women’s high-end apparel accounts for 23% of the women’s apparel industry, with significant year-on-year growth. As women’s education level increases, women with a bachelor’s degree or above account for 55.9%, which means that their economic income and purchasing power are also higher. In terms of age distribution, Gen Z women like to try new things, while those born in the 1980s are more influenced by Western culture and prefer Westernized clothing. According to the “2021 Women’s Quality of Life Trend Insight Report”, today’s women no longer follow cheap clothes, but instead demand that clothes are most important to look good, with style and quality.
Menswear market: The menswear consumer market is in a growth period, expanding at a CAGR of 6.8% over the past 10 years. According to Statista data, the revenue of China’s men’s clothing market in 2021 reached 590.9 billion yuan, surpassing the United States for the first time to become the world’s largest clothing market. According to Guanyan Tianxia, China’s men’s clothing market accounts for 23% of the overall clothing market. Unlike women’s shopping patterns, men shop in brick-and-mortar stores without spending too much time hanging out. According to the “Trendy Clothing Consumption Trend Report”, jackets are the best-selling products in men’s clothing in live broadcast clothing consumption, with a year-on-year growth rate higher than that of other clothing types. As men pay more attention to their personal appearance and pursue fashionable appearance than ever before, this in turn drives the demand for high-quality clothing. In recent years, stylish athleisure clothing has become increasingly popular in the menswear market.
Children’s clothing market: Despite the impact of the new crown epidemic, the size of China’s children’s clothing market in 2021 was 229.2 billion yuan, down 4.2% year-on-year. According to Euromonitor data, the proportion of China’s children’s clothing market in the overall clothing market has been increasing since 2012, from 7.48% to 11.7% in 2021. According to Euromonitor data, the market size of infant clothing has also continued to increase in recent years, with the proportion in 2021 rising by 6.2 percentage points compared to 2012. In 2021, there were about 253 million people aged 14 and below in mainland China. The outline of China’s 14th Five-Year Plan optimized the fertility policy, which foreshadows the huge demand in China’s children’s clothing market in the next few years.
Casual clothing market: The epidemic has led to changes in lifestyles. According to the magic mirror market intelligence, the sales growth of online home wear in the first 10 months of 2021 was 38.6% higher than that of 2020. Chinese consumers are increasingly demanding casual clothing, and the types of casual clothing are constantly changing and “evolving”: mass casual fashion, fashion casual style, sports and leisure theme, business casual youth, outdoor leisure life, denim casual personalization. At present, the concentration of China’s leisure market is relatively low, and there are many mainland and international brands. International clothing brands with fashion, diverse styles and short update cycles, such as Uniqlo, have entered the mainland leisure market, and the market competition is becoming more and more fierce.
Sportswear market: According to data from Zhiyan Consulting, the retail sales of China’s sportswear market will reach 252.3 billion yuan in 2021, an increase of 7.3% over previous years, and it is expected to reach 269.6 billion yuan in 2022. During the epidemic, consumers spent more time at home, and with people paying more attention to their health, they chose to do sports to kill time. According to the 2021 China Sports and Fitness Industry Report, there are 435 million people who regularly participate in sports in China, an increase of 27 million from 2019.
Professional clothing market: Professional clothing, also known as work clothes, is specially made for work needs, accounting for about 20% of the national clothing market. Professional clothing in China is mainly divided into business professional wear, shirts, haute couture and protective clothing. Enterprises or institutions will customize fashionable and professional work clothes for employees to enhance their image and sometimes have a protective effect. In recent years, professional clothing has added ergonomic technology, and it also has different functions according to the working environment of the wearer, such as flame retardant and pressure resistance, oil resistance, waterproof and so on.
Customized clothing market: With the improvement of lifestyle, more and more mainland middle-class consumers are pursuing personalized customized products. Some consumers who have requirements for the quality of clothes are willing to buy clothes through tailor-made methods. According to the results of a survey conducted by the Hong Kong Trade Development Council on mainland middle-class consumers, among all kinds of custom-made products, clothing is the most custom-made product among the respondents. At present, the mainland customized clothing market is still in the emerging stage, which is a relatively high-end consumption model, and the product premium space is relatively high.
With the strengthening of environmental protection awareness and income in China, more people are willing to integrate environmental protection concepts into their daily lives. The development of innovative technologies has become a turning point in enterprise competition. For example, some clothing brands have established partnerships with upstream analog functional fiber manufacturers, and gradually formed a trend of upstream raw material innovation leading the terminal fashion trend. In sustainable clothing, linen and recycled nylon are the most commonly used raw materials. Some big international brands have also emphasized that they will not use animal hair as fur to maintain their brand reputation. According to the Daxue Consulting report, 24% of respondents are willing to pay a premium of 5 to 10% for environmentally friendly clothing.
The rise of “national tide” has driven the demand for domestic clothing, and domestic brands have revitalized Chinese culture and then integrated them into products, so that products appear to have Chinese cultural characteristics but do not feel old-fashioned. Foreign brands are also rushing to follow suit and add Chinese elements, such as Burberry adding Chinese New Year zodiac pattern design to clothing.
The import value of some clothing in 2022 is as follows:
|taxnumber column||product name||Import value in 2022 ( million US dollars )||Increase or decrease in 2022 compared to 2021 (%)|
|6101||Men’s or boys’ overcoats, overcoats, capes, capes, jackets, windbreakers and the like, knitted or crocheted||31.4||-10.7|
|6102||Women’s overcoats, overcoats, capes, jackets, windbreakers and the like, knitted or crocheted||63.9||37.0|
|6103||Men’s or boys’ suits, ensembles, blouses, trousers, overalls, breeches and shorts (other than swimming trunks), knitted or crocheted||287.9||1.2|
|6104||Women’s suits, ensembles, blouses, dresses, skirts, culottes, trousers, bracer overalls, breeches and shorts (other than swimwear), knitted or crocheted||369.9||-6.8|
|6105||Knitted or crocheted men’s shirts||185.1||6.1|
|6106||Knitted or crocheted blouse||20.3||0.2|
|6107||Men’s or boys’ underpants, briefs, pyjamas, bathrobes, dressing gowns and the like, knitted or crocheted||35.7||-43.1|
|6108||Knitted or crocheted women’s petticoats, briefs, panties, pyjamas, bathrobes, dressing gowns and the like||62.1||-21.6|
|6109||Knitted or crocheted T-shirts, singlets and other vests||892.0||-6.6|
|6110||Knitted or crocheted pullovers, cardigans, vests and the like||1,246.7||4.6|
|6111||Knitted or crocheted baby clothing and clothing accessories||56.7||-49.6|
|6112||Knitted or crocheted sportswear, skiwear and swimwear||22.4||-22.6|
|6113||Textiles impregnated, coated, covered or laminated with plastic or other materials, and garments made of knitted or crocheted textiles treated with rubber||6.8||-15.7|
|6114||Other garments, knitted or crocheted||77.0||-31.9|
|6115||Knitted or crocheted socks||80.3||-10.8|
|6116||Knitted or crocheted gloves||17.3||-19.7|
|6201||Men’s or boys’ overcoats, overcoats, capes, jackets, windbreakers and similar articles, not knitted or crocheted||616.5||1.3|
|6202||Women’s overcoats, overcoats, capes, jackets, windbreakers and similar articles, not knitted or crocheted||619.9||4.4|
|6203||Men’s or boys’ suits, ensembles, jackets, trousers, overalls, breeches and shorts (other than swimming trunks), not knitted or crocheted||712.1||-11.0|
|6204||Women’s suits, ensembles, blouses, dresses, skirts, culottes, trousers, overalls, breeches and shorts (other than swimming suits), not knitted or crocheted||1,050||-3.5|
|6205||Men’s shirts, not knitted or crocheted||217.8||-13.8|
|6206||Women’s blouses, not knitted or crocheted||131.3||-7.2|
|6207||Men’s underwear, briefs, pyjamas, bathrobes, dressing gowns and the like, not knitted or crocheted||6.0||-27.8|
|6208||Women’s or girls’ undergarments, petticoats, briefs, panties, pyjamas, pyjamas, bathrobes, dressing gowns and the like, not knitted or crocheted||21.0||-6.5|
|6209||Infant clothing and clothing accessories, not knitted or crocheted||15.4||-47.9|
|6210||Textiles impregnated, coated, covered or laminated with felt, nonwovens, plastics or other materials and garments made of rubberized textiles||445.0||335.9|
|6211||Sports, ski and swimwear, not knitted or crocheted||495.7||14.1|
|6212||Bras, belts, corsets, suspenders, garters, garters and similar articles and parts thereof||118.9||-24.4|
|6213||Handkerchiefs, not knitted or crocheted||1.7||-25.5|
|6214||Shawls, scarves, veils and the like||230.5||32.1|
|6215||Ties and bow ties, not knitted or crocheted||12.7||14.8|
|6216||Gloves, not knitted or crocheted||6.8||-11.2|
|Source: Global Trade Atlas|
2. Competitive situation
Some advantageous domestic brands have become leaders in the industry, such as Anta and Li Ning in sportswear; Youngor in men’s suits, Sangun in knitted underwear; Bosideng in winter clothing and Septwolves in jackets; Jiu Mu Wang, Ordos in cashmere sweaters, etc. However, due to the continuous adjustment of the positioning of big shopping malls in big cities, some domestic brands are forced to withdraw from big shopping malls in big cities and extend or transfer to second-tier cities and wholesale markets. On the other hand, mainland brands are constantly improving their grades, launching customized services, and focusing on innovation and brand upgrades to adapt to market changes and drive the development of local apparel brands.
At present, China’s high-end clothing market is almost occupied by clothing brands from France, Germany, Italy, Japan, the United States, the United Kingdom, South Korea and other countries. Hong Kong and Taiwan brands are mainly concentrated in the mid-end market, while domestic brands are mainly concentrated in the low-end market.
In recent years, the rise of the Internet celebrity economy has spawned a new industrial chain. Internet celebrities use their popularity to gather consumers and directly cooperate with brand manufacturers to create a production model of “before sowing and then factory”. Internet celebrities have replaced the roles of wholesalers and retailers in the past and become a bridge between factories and consumers. This method effectively alleviates the problem of high inventory costs in the clothing industry, and drives direct cooperation between webcasting and industry parties.
The sales channels of mainland apparel are mainly department stores, specialty stores and online sales. According to Statista data, nearly half of the respondents still shop in brick-and-mortar stores because they can feel the texture of the product and try it on, and secondly, they can ensure the quality of the product.
Retail department stores: In the past, large department stores were the main channel for clothing sales. However, with the rise of e-commerce in recent years, the clothing retail sales of department stores have gradually declined. According to the “2021 China Department Store Retail Industry Development Report”, although the passenger flow of brick-and-mortar stores decreased during the epidemic, 45.8% of the interviewed companies said that the experiential consumption element has increased compared with previous years. Examples of experiential elements include catering, theaters, cultural activities, etc., which can prolong the stay of customers, drive consumption, and strengthen the image of the mall. According to the National Bureau of Statistics, clothing retail sales in department stores fell 9.8% in 2021 from a year earlier.
Clothing professional market: After years of development, as a mature clothing product distribution model, the clothing professional market has achieved good economic benefits and social influence, and has accumulated a certain industrial foundation. The main professional clothing market in the country can be divided into 3 regions:
- South China region: The professional clothing market in South China represented by Guangdong and Fujian has the advantages of early start, smooth information flow, superior geographical location and solid industrial foundation. At present, Guangzhou has formed a professional clothing market in the Liuhua segment with Baima as the leader and the Shahe segment with Shadong as the leader. There are more than 10 clothing wholesale centers in the Liuhua clothing wholesale business district. In addition, Humen Town, Guangdong is also a place where wholesalers are concentrated, among which Fumin Commercial Building and Yellow River Fashion City are the most representative.
- East China: The clothing wholesale markets in East China are mainly distributed in Zhejiang, Jiangsu, Shanghai and other places. With the geographical location and excellent development model of the Yangtze River Delta, the East China clothing economy even surpasses the Pearl River Delta in some aspects. Typical professional markets include: Shanghai Qipu Road Clothing Wholesale Market, Changshu Zhaoshang Mall, Keqiao Textile City, Puyuan Sweater Market, Hangzhou Sijiqing Market, Haining Leather City, etc.
- North China region: The professional clothing market in North China is mainly concentrated in Beijing, Tianjin, Hebei, Shandong and other regions. At present, the representative professional market in Beijing is the Muxiyuan business district, which is the largest clothing distribution market in the north of the Yangtze River in China. The main trading markets for textiles, clothing, shoes and hats in Shandong include Jimo Clothing Wholesale Market, Zichuan Clothing City, Zibo Zhoucun Textile World, Jinan Lukou Clothing Wholesale Market, etc.
Specialty store: The clothing chain monopoly model has become a major model of brand clothing sales today, and many companies have adopted the joint operation method combining franchise and direct sales. This method can not only make up for the insufficiency of the franchise terminal’s lack of control, but also effectively avoid the risk of the company investing too much capital, while some powerful big brands often prefer to use direct sales to enhance the brand’s influence. In order to expand their popularity and enhance their image, many brands have also increased the development of specialty stores. According to the National Bureau of Statistics, apparel retail sales in specialty stores fell by 6.8% year-on-year in the first three quarters of 2021, the smallest decline relative to specialty stores (‑9.2%) and department stores (‑16.6%).
At present, large-scale clothing stores have been turned into smart stores, such as setting up “smart interactive screens” to provide clothing advice and discount information, etc.; “3D fitting mirrors” allow consumers to virtually try on clothes in front of the screen, saving the need for fitting. time; “RFID tags” manage inventory, providing higher inventory management quality and accurate product information. The new crown epidemic has also driven the use of new technologies. The restrictions on going out during the epidemic have prevented consumers from shopping offline, so many brands have launched a “virtual fitting” function, which uses online meetings, 3D body scanning technology and other digital technologies to realize the function of fitting clothes at home.
Clothing supermarkets and discount stores have become a new landscape in the clothing market. The clothing supplied by the supermarket is often not the most popular in style, but the price is more affordable and the quality is generally guaranteed. There are also some brand clothing mainly want to use the popularity of supermarkets to increase awareness and enhance performance. As for discount stores, there are both brand advantages and preferential prices in the wholesale market.
Store-in-store model: As the name suggests, it is a store within a store, mostly in large-scale retail stores such as department stores. The store-in-shop of fashion is basically a specialty store of a certain brand. Its form and management are more free than other counters in the store, but it is not as unconstrained as a single-family home, and needs to cooperate with the overall operation of the shopping mall. The store-in-store layout has its own unique style to highlight the brand’s cultural characteristics. The huge traffic of large stores is often the main reason for attracting manufacturers to enter the store-in-shop.
Online shopping market: According to the National Bureau of Statistics, online retail sales of clothing in 2021 increased by 5.8% year-on-year. In addition, in June 2021, the government launched the ” National Key Points for Combating Intellectual Property Rights Infringement and Manufacturing and Selling Fake and Shoddy Goods ” to rectify infringements, strengthen the awareness of intellectual property protection, reduce the intrusion of big brands by counterfeit goods, and enable consumers to purchase more confident.
Live broadcast market: Due to the epidemic, the number of online live broadcast users in the mainland has grown significantly, which has also driven live broadcast sales. According to the China Internet Network Information Center, as of June 2021, the number of Internet users in China reached 890 million.
Celebrity effect: Driven by the star effect, merchants marked the same style as the star through offline check-in on social platforms, which caused the product to be in short supply. There are also celebrities who use their popularity and influence to launch their own brands.
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