Clothes Distribution in China

The sale of apparel in China is moving from offline to online. Online platforms are highly advanced and marketers need to determine which platforms offer the best return on investment. Luxury, high casual, international and domestic brands all have specific demands that can be fulfilled by various sales networks. While customers moving increasingly to online platforms, offline networks are not out of date. In reality, they still function as an essential source of sales and marketing.

Throughout the Chinese textile industry, the products on the market can be segmented into two separate categories based on the type of demand, the first one being high-quality retail labels and mass-produced brands. In the first category, the customer is a high-income demographic who is interested in luxury products and have the money to afford it, so they put more focus on the standard of clothing rather than on service. The second group is the mass-produced brands for the market, such as Uniqlo, ZARA and H&M, which are trendy and cheap and are popular with young buyers.

In the new market, Chinese companies are taking a leading role in the consumer retail sector. Nevertheless, the high-end market is almost entirely dominated by international brands, particularly French, Italian, American, German, Japanese, etc. Earlier, huge shopping malls in major cities mostly sold local brands, but with the rise in their placement and also the presence of many international companies entering the Chinese market, many of the local brands are forced to abandon the big cities market and move to the second and third cities. It is crucial to remain up-to-date as the market shifts rapidly, not just because the Chinese find more of their goods online, but also because of a greater awareness of international brands.

Product development in the region

             “China, the factory of clothes for the world”

                                                                                                       - Economic Times

The fashion and garment items and industry requirements may differ depending on the commodity. Imported clothing can be checked based on health, hygiene and environmental protection. Textiles used for protection purposes can also require compulsory compliance checking as per the applicable Chinese regulations.

European firms must compete in the high-end market with other international exporters, such as the USA, Japan and Korea. In the meantime, local firms already have a ready network of trade partners and are constantly seeking to expand to international standards by further spending in R&D or JV. European SMEs will be less familiar with the local market climate and consumer needs and will also need to rapidly develop and exploit their product developments and regional networks.

The Chinese clothing markets

Fatpos Global predicts that the clothes distribution market is anticipated to register a significant CAGR in the coming decade. Industry sales rose by an annualized 5% over the last five years to a total of $324 million in 2019. Clothing represents one-third of all retail shops. The three most successful e-commerce websites for apparel delivery in China are Taobao, Tmall and JD. Forecasts suggest that 52% of overall income will come from internet transactions in 2020. While offline channels draw less traffic than online, they play a more critical role at the buying point, accounting for 60 percent of all transactions. Offline conversion is about 4.5 times as high as online conversion. Chinese customers are purchasing 43 percent of unbranded apparel online. We prefer, though, to purchase licensed apparel in traditional department outlets. In the case of licensed apparel delivery in China, the offline outlets account for 80% of sales.