Overview Of China fashion industry

Overview

The Chinese economy continues its dynamic performance, averaging around 10% growth for the last 5 years. As barriers to entry are reduced, more and more businesses are considering their entry into China. This is in an effort to capture some percentage of the returns generated by China’s 1.3 billion consumers.

This series of reports is intended to provide fashion retailers, who are planning to enter China for the first time, with an overview of the Chinese fashion industry. In addition, the reports act as a quick update for companies who have already entered China as it touches on the industry, trends, brands available, wholesale and retail pricing, type of clothing cutting preferred, consumer behavior and updated regulations. A key challenge when entering China is the different regions in China. Consumer behaviour and preferences for food, fashion and lifestyle vary dramatically in these regions. For example, retailers should not assume that products or Fashion styles that sell in Shanghai will also be popular in Xiamen which is in southern China.

The series of reports includes:

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 key regions in China from a retail perspective

Report 4 Women’s Fashion and Consumer Behaviour

Report 5 Teen’s Fashion and Consumer Behaviour

Report 6 Children’s Fashion and Consumer Behaviour

Report 7 Men’s Fashion and Consumer Behaviour

Report 8 Recommendations

Economic Conditions 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 forecasted by the banks (Quarterly Bank reports) that GDP would drop to 8% in China in 2007. (Goldman Sachs), though in our opinion GDP rate may be higher due to increased production and consumption. In 2006 China’s urban living expenditure increased at a higher rate than GDP, both on a national as well as provincial basis. Despite strong growth, inflation remains moderate with monthly inflation averaging 1.3% year on year from January to September 2006. It is forecasted that annual growth in consumer prices will reach 1.8% in the early 2007. This is because higher land prices would impact production costs. Increased investment would in turn feed inflationary pressures.

The government’s tolerance of greater Yuan volatility and the higher GDP has caused expectations of further exchange rate reform, which would result in faster currency appreciation. The potential impact would be that foreign clothing brands would find that their prices could be more readily accepted in the Chinese market.

Retail Industry in China

Increasing income in China and Government efforts in encouraging consumer expenditure have resulted in rising domestic consumption. Statistics show that total retails sales of consumer goods increased by 12.5% to RMB 6,718 billion in 2005. However, it drops slightly to approximately RMB 6,400 billion (US$770b) in 2006. One of the factors is the import quota imposed by US and European Union in 2006 (O&L). However, with the increase in income and domestic consumption, it is expected that the growth rate of retail sales can be maintained at about 10% in the next 5 years (O&L projection & Goldman Sachs Global Investment Report)

China’s clothing market has been growing at 7% and is now a USD40 billion industry. Department stores account for approximately 40% of the market. This includes stores like Parkson, Shanghai Bailian and foreign brands like Wal-Mart. Clothing brands sold in these department stores include both international brands like Hugo Boss and local brands like Li Ning, Borne, Joe One. Franchise chains and local individual clothing outlets in China account for the other 60% share.

Profit Margins for retail chains in China are high. Due to the lower costs of manufacturing in China, profit margins by these Clothing brands can be as high as 50.5% for brands like Giordano (2005) and Ports(70.4% in 2005) . The cities of influence for 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 manufacturing, there are different specialty regions. For example, Ningbo is more famous for manufacturing of bags while Guangdong especially Guangzhou is more famous for apparels.

The Different Regions in China

Due to the geographical enormity of China and the huge variation of economic development between cities, market potential differs from city to city. The table below shows the disparity in GDP per capita, where the wealth is located in the coastal cities. Cities are classified into tiers based on population and per capita GDP, Shanghai, Beijing and Guangzhou are tier 1 cities. Report 3 explores in detail regional differences in the Chinese fashion industry.

Fashion Industry in China

Market Segments

Initially there were two markets for apparel in China:

1. low priced basic apparel sold under local brand names and offered in Chinese department stores, foreign hypermarkets or small family owned specialty chains

2. luxury brands sold either in franchised boutiques or upscale department stores.

Due to the rapid growth of China’s middle class a new category has emerged, involving quality brands, both Chinese and foreign, being sold in department stores and specialty stores. Consumers in China’s middle class are increasingly sophisticated, demanding higher quality, variety and innovation from their retailers. The new category is highly fragmented and is dominated by specialty casual brands from Hong Kong, such as Esprit (514 outlets), Giordano (644) outlets, Baleno (980 outlets) and Glorious Sun (1,076 outlets). The new segment has significant growth potential as it is affordable to the middle class but positioned at a price point slightly higher than local brands. Prices in Clothing have dropped slightly in 2006. This is due to the increased competition in the fashion industry in China (O&L, 2006).

In recent years there are not only an increase of Hong Kong, local Chinese clothing brands and international brands but also an increase of foreign brands. These brands may be mid sized chains that are well established in their home countries but not out of their countries. Example Singaporean chains like Samuel and Kevin. In addition, there are brands that are created due to the popularity of other brands. Example the clothing brand, Fish, in China has spawned other similar brands like 3 Fishes, Fishes and so on.

Expansion into Second Tier Cities

The retail market is beginning to reach maturity in Tier 1 cities like Shanghai. Thus the need to accurately target specific consumer groups is much more significant in these areas. As a result retailers are increasingly expanding into second and third tier cities like Chengdu, Nanping, Tianjin. Major Brands like Jean West has now gone to secondary and third tiered cities as well. The attractiveness of these secondary regions is enhanced by the migration from the countryside to the regional cities, increasing the size of the second and third tier urban retail market. This would be elaborated in subsequent reports.

Consumer Attitudes towards Brands

Consumers are highly brand conscious and the fact that one can afford these products is seen as a status symbol. Luxury brands like LV, Christian Dior, are therefore often sought after when purchasing apparel and cosmetics. For many segments, particularly younger consumers, foreign brands that are well known are still regarded as superior and are seen as a status symbol. Brands that are made in US and Europe are more highly valued than those from Australia, or other Asian countries like Singapore, Taiwan. Due to the high prices, there are also a lot of high end counterfeit clothing and shoe brands in China.

Attitudes to domestic brands have 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 though the market share has decreased recently. Pride in the nation’s accomplishments has resulted in many consumers preferring local brands, all other things being equal. These would be further elaborated in subsequent reports

Consumer Attitudes towards Price

Although Chinese consumers are price sensitive, a recent survey shows that consumers are increasingly concerned about product quality and customer service, particularly with respect to apparel. Accordingly these elements should be emphasized in advertising and promotional material.

Wrangler Jeans – The Ultimate Synonym of Fashion!

If you are looking for something to meet your quest for fashion, if you want to look sexy and attractive at the same time, this could be the ultimate choice. Tapered jeans have been quite popular, while a boot cut or another that fits over boots could be as exciting to put on. You could always make a loud fashion statement when you put on jeans of this genre. They are available in traditional blue denims, but could also be found in all the colours of the rainbow. All said and done, they add tons to your personality and make you look very good.

They can be easily recognised from the crowd you have in the wide world by the typical logo. They provide comfort besides giving the best shape to your body; they are as good as being in your skin, so you could appear trendy as well if you opt for this brand of jeans. They have been dominating the world of fashion and glamour since 1943.

There have been many changes in fashion ever since, but all of them have been successfully incorporated into wrangler jeans. It is very important to have the correct measurements of your body, specially your waist before you go shopping for one. They are synonymous with comfort, the deep pockets always add to the comfort you could carry when you wear a pair and the 100 per cent cotton composition adds to the comfort. They require but the least amount of maintenance, so you could put one on and forget about it for days to end.

The fear of getting burnt is what prompted the manufacturers to design the brand of a fire-proof quality. The quality of the fabric of the garments has been found to be the leading cause of burns in situations around the world, and this is where the company has added a feather to its cap by designing its jeans from fire-resistant material. These jeans are available in all sorts of attractive designs that suit the requirements of all sorts of people. They offer quite a competitive price when prices of jeans are compared. The latest fashions are incorporated in the designs regularly so you could never fear lagging behind in the world of fashion.

It makes very little difference whether you are a man, or a woman, your age doesn’t make a lot of difference too. Wrangler jeans are always there to add grace and quality to your looks. They are available all over the world, so it makes very little difference which part of the world you live in, or where you are going. You could find stores selling these jeans in countries in Asia, Latin America, North America, and Africa or even in Europe.

The History of Fashion Jewelry

Jewelry has made significant impressions on society dating back to ancient times. In ancient civilizations, gold was considered a preferred luxury metal because did not tarnish and was shapeable. Jewelry personified natural forms such as shells, plant life, and animals. Significant advances in style became increasingly evident with the setting of pearls and gemstones in shiny metals. Jewelry was worn in the form of necklaces, bracelets, pendants, earrings, and wreathes.

During Medieval Times, jewelry was widely adorned and worn by various levels of society. Brooches, pendants and pins with religious motifs were very popular during this period. Jewelry became so popular, sumptuary laws were created to limit lower levels of society from wearing gold and silver jewelry.

15th – 17th Centuries

Fake pearls and enamels became increasingly acceptable and were mass produced. These items were typically worn during the daytime as substitute for finer jewelry. Fine jewelry was kept for evening wear. Diamonds increased in popularity as well. The invention of the prong setting enhanced the brilliance of the diamond; therefore, expanding its allure with the upper-classes.

Victorian Era

The Victorian Era was an important advancement for Jewelry as an art form. Artistic expression became more apparent in fashion and jewelry. The early Victorian years were referred to as the Romantic period. The Romantic period emphasized dreams and emotions as inspiration for artistic expression. Morning brooches were a staple of this period. The hair of a loved one was intertwined within a pin, pendant, or brooch to make a sentimental piece of jewelry.

Mass production of jewelry lowered its luster with Victorians as importation of jewelry began from North America to Europe; thus, the beginning of the Arts and Crafts movement.

Arts and Crafts guilds were smaller jeweler associations, but provided higher quality jewelry and intricate artwork in design.

Early 20th Century

The Art Nouveau Movement was derived from the Arts and Crafts movement. It started in Paris and spread to North America. Asymmetrical and flowing lines inspired natural designs. Among these natural designs, floral and female forms were very popular. This period has a continuous influence on Jewelry design.

1930 to 1940

The reinstatement of mass produced jewelry followed the Art Nouveau Movement. This type of jewelry was meant to be worn selectively as an accessory to specific outfits. Two designers, Coco Chanel and Elsa Schiaparelli masterminded accessorizing fine and costume jewelry with day to day fashion. Vermeil jewelry was popular, but in short supply from war efforts. Rhinestones popularity increased.

1950’s

Hollywood’s flamboyance and glamour influence spread across continents. Engrained with it was costume jewelry on the silver screen. The styles and look of the stars quickly spread and was widely accepted across the world. The emergence of the middle class in America increased the demand for costume jewelry. This encouraged technical advances in mass production methods.

Today’s era has brought a creative culmination of styles to fashion jewelry, both timeless and trendy. Many celebrities have caught the wave by designing their own lines. Tori Spelling and Suzanne Somers are among a few. The fashion Jewelry industry is now a multi-billion dollar industry.

Jewelry is much more eclectic in today’s era. Pieces are made by many different stones, textures, colors, various lengths, or metals. Jewelry is sold in large department stores, restaurants, gift shops, jewelry parties, and boutiques.

Fashion jewelry adds a splash of pizazz to attire no matter the occasion. Most importantly, fashion jewelry is fun! It is fun to shop for jewelry, sell jewelry, collect jewelry, and of course, show it off.