The fashion market in China
If we take a closer look at brands in the clothing/fashion market, it is possible to subdivide it into three parts: unbranded clothing, luxury brands and labels. Customers of unbranded clothing will be more concerned with the practicality of the garment: they are looking for the lowest price and therefore the value of the product is based neither on the identity of the brand nor on the quality of the product. clothing. In general, consumers in this market are low-income people. he clothes reflect a high social status and a high standard of living.
Branding is the key in China
The company can set the target-heart and decide the marketing and the communication strategy only after the definition of an identified and distinguished position. source
Chinese luxury consumers
The customers of this sector in China come mainly from the wealthy class. Only part of the upper middle class can afford luxury goods from time to time; although it is well known that middle-income Chinese women try to buy a luxury handbag every month.
The consumer group for luxury brands is a relatively small group compared to the overall clothing market. Only 1.11 million out of 1.4 billion people belong to the wealthy class.
Private labels brands : personalization
The third category on the market represents private labels. Chinese customers are mainly from the middle class.
People who care about their image, but cannot or are not prepared to pay exorbitant prices in clothing. They care about the quality of the garment as well as its price, these customers are sensitive to the quality / price ratio.
However, the clothes must also be personalized, that is to say offer a touch of authenticity in the style of the product. It is not easy for a manufacturer to find this balance, but it is a target with great potential that should not be overlooked. According to a market study conducted by our Shanghai-based fashion industry team, we found that in the year 2000, only 4% of the urban population represented the middle class. In 2012, this ratio increased to 66% and is expected to reach 75% in 2022. Therefore, there are many opportunities for these private labels in China.
E-Commerce is even more popular
E-Commerce, O2O and the different opportunities for fashion in China
The current economic situation is one of the great opportunities for private labels. Over the past 10 years, China’s GDP and the purchasing power of the people have grown significantly rapidly. With the increase in purchasing power, expectations have also been higher: many Chinese consumers are no longer satisfied with basic needs, they expect better quality, better service at a reasonable price today. Given that consumers of private labels represent a growing middle class, this sector has a lot of potential. O2O (online to offline) businesses represent a new trend and are often attached to private labels. The O2O business model encourages and drives customers to buy online at offline outlets, for example with the help of e-coupons. Due to an Internet boom in China, this business model is very popular. Take the example of Merters / Bonwe, the first ready-to-wear company in China that used a QR-Code system printed on every product in the store. By scanning on this code, customers were redirected to the official Merters / bonwe site to obtain additional information on the product purchased.
With the emergence of e-commerce, different consumption habits are created. Some customers prefer to try the clothes in stores and buy later online, hoping to find the same cheaper clothing on the internet than in physical stores. This lower price is partly explained by the different costs: rent costs, labor costs, maintenance costs and management costs, etc.
This general trend of e-commerce was experienced as a shock at the very beginning, for retailers of traditional stores. But over time, this has opened up serious opportunities for market players. Private labels in China are experiencing an upward trend while the luxury market suffers from an aesthetic image that is too rigid, not personalized enough. However, the marketing of privates label products represents a real challenge for the retailer: it requires better quality of work to deal with complex situations, including sales analysis, brand promotion