Decelerating economic growth adversely affects apparel growth
The country’s economy suffered a decline in growth over the review period with 2012 GDP growth declining to 7.8% from 9.2% in 2011. Under the sluggish macroeconomic conditions, consumers became more conservative when purchasing apparel. In this context, apparel in China experienced a decline in growth over the review period in both retail volume and value. However, in an attempt to secure share growth many players and retailers launched marketing campaigns to attract consumers such as discount sales. However, this was not successful.
Unit price continues to grow
Despite the discount promotions widely seen in 2012, the average unit price of apparel continued to increase over the review period with rising raw material, labour, other production and distribution-related costs. As a result of the increase in average unit price, apparel saw stronger retail value growth in 2012 than retail volume. With the sluggish global economic conditions, retail volume sales of apparel were impacted by the price increases hence slower growth in 2012 compared to 2011.
International apparel players support expansion in China
Due to the on-going financial crisis in developed markets in 2012, many international players switched their focus to the Chinese market which remained lucrative. Over the review period, leading international fast fashion apparel players such as H&M, Gap, Uniqlo and Zara all opened new outlets in the country, not only in first tier cities like Shanghai and Beijing, but also further penetrated into lower tier cities across the country. In addition, international sports brands represented by Nike and adidas all increased the distribution coverage across China in attempt to boost the penetration in lower tier cities and town level markets.
Internet retailing sees strong growth
Under the sluggish domestic economic conditions in 2012, consumers became more price-sensitive when purchasing apparel. A number of consumers therefore tended to shop via the internet which provides higher discount rates than store-based outlets. In addition, a large number of players collectively opened online outlets and strengthened their online forces in 2012; internet retailing provided wider choices to consumers than before. For instance, Zara, one of the most famous fast fashion brands in China, debuted in Chinese internet retailing in September 2012. In this context, apparel retail sales via internet retailing increased to RMB126 billion by the end of 2012 from RMB52 billion in 2011.
Steady growth projected over the forecast period
Over the forecast period, apparel is expected to register on-going healthy growth, both in retail volume and value sales. This will be driven by the country’s continuing economic development, rising disposable income levels and a desire for a higher standard of living amongst consumers. Increasing choice through various channels, as well as the wide availability of international fast fashion and sportswear brands, will likewise contribute to Chinese consumers spending more on apparel over the forecast period.
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Discover the latest market trends and uncover sources of future market growth for the Apparel and Footwear industry in China with research from Euromonitor's team of in-country analysts.
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If you're in the Apparel and Footwear industry in China, our research will save you time and money while empowering you to make informed, profitable decisions.
The Apparel and Footwear in China market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the market size of Apparel and Footwear in China?
- What are the major brands in China?
- How dynamic is the growth of clothing and footwear internet sales?
- What is the performance of women’s clothing vs men’s clothing?
- What % of clothing and footwear sales goes through grocery retailers?
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This industry report originates from Passport, our Clothing and Footwear market research database.