More environmentally responsible brands
Currently in China more and more consumers are demanding ethical practices and responsible retailing. In fact, the country has a key position in shaping the new green trends in the global fashion market. The global fashion industry is growing, and a great deal of that growth comes from fashion market in China.
Examples of sustainable fashion brands in China
NEEMIC is a high fashion brand based in Beijing, seeking to address both ethical and environmental consciousness within their label. Their clothing is made from organic materials, eliminating all artificial products from agricultural production of fibers.
Fake Natoo is differentiating itself from competitors with its production techniques. Fake Natoo creates the clothing using discarded clothes or donated textiles, making this a truly sustainable line.
Shokay is a social enterprise that creates clothing using yak down through a partnership with Tibetan herders. Furthermore, they are actively contributing to the development of communities in western Tibet.
These companies stand out as excellent examples for green development in the industry. However, their ability to overcome rising costs in materials, labor, and transportation, while tackling more active regulation and shifting consumer sentiment, remains to be seen in the long run.
Fashion market in China is trying to target millennials
Chinese fashion companies have yet to figure out how to appeal to millennials as labor costs increase the pressure to adjust their brand strategy. The Chinese millennials are more about individualism unlike their predecessors. The new individualist consumer was the inspiration for the China’s biggest fashion fair in Shanghai in 2019.
“The transformation that our industry and overall economy is facing is as steep as a cliff,” said Zhao Weiguo, professor at the fashion department of Zhejiang Sci-Tech University. “This means that there is a wide gap between past and future and everyone faces the question of how to leap over it.”
While China’s technology sector has produced international heavyweights such as Huawei or Alibaba, an equivalent fashion brand hasn’t emerged yet. In China it’s key to understand the rapidly changing and diverse demands of consumers born after 1980. They have more and more influence by their western counterparts. The purchasing power of these groups, which currently consists of roughly 410 million people, will only grow. Working with the internet age and the millennials, Chinese fashion companies have a huge potential to uncover.
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 and diverse designs, shopping online has become the first choice for most of the population. The development of e-commerce in the fashion industry has prompted the domino effect of instant celebrities on the social media. 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). It is a channel covering the purchase of overseas products. As the e-retail markets have been growing and developing rapidly in China, the fashion industry will become more promising.
The penetration rate of the e-commerce fashion industry is high in China
China’s e-commerce industry has developed early and fast, and after many years has become one of the important retail channels. Statistics show that the domestic e-commerce retail scale has increased from 1.4 trillion yuan in 2013 to 5.5 trillion yuan in 2017. It had a year-on-year growth rate of 31%. Forecast shows that the scale of e-commerce retail will reach 10.1 trillion yuan by 2020.
The clothing category is unique from other categories. Compared to electronic products, it has a high degree of personalization. In 2011, the domestic fashion clothes e-commerce market scale was 203.5 billion yuan. In 2016, the market scale increased to 934.3 billion yuan. The year-on-year growth rate was 25%, and the 2011-2016 CAGR was 36%. The penetration rate of clothing e-commerce has also increased from 14% in 2011 to 37% in 2016.
Low price is the key factor driving e-commerce fashion in China
The penetration rate of e-commerce consumption in first-tier cities is significantly higher than that in low-tier cities. Due to the high degree of informatization, high-tier cities have a variety of accessible material supplies.
The advantage of e-commerce is that the price is relatively low. According to JD.com’s data, by 2016, the proportion of highly sensitive and extremely sensitive to price consumers in the e-commerce reached 40%. The price is still the priority in the e-commerce consumption.
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