The next 10 years will be a tremendously exciting and definitive time for China's fashion market, and the opportunity for established and aspiring players is huge - within that time frame, China is expected to become one of the world's largest fashion retail markets, according to a new report by The Boston Consulting Group, entitled Dressing Up: Capturing the Dynamic Growth of China's Fashion Market.
The report presents the findings of interviews with more than 5,000 Chinese consumers age 14 to 45 across a variety of regions and city tiers. It outlines the forces that have shaped China's fashion market to date, where the biggest opportunities lie, and six key trends vital to determining winning strategies for the coming decade. It also poses 10 strategic questions that any company with serious ambitions in this market should consider as it plans to enter or expand its footprint there.
"Traditionally, for fashion players, the keys to winning were having a 'big' brand name, a low-cost supply chain, and the ability to rapidly develop a retail footprint through franchising," said Vincent Lui, a BCG partner and coauthor of the report. "To win in the future," he continued, "companies need to adapt their strategies in response to new demands from consumers."
Key Emerging Trends in China's Fashion Market
Competing in China's dramatically changing fashion market requires companies to understand the full range of buying behaviors that will emerge across disparate consumer segments and city tiers. To that end, the report identifies six key trends that will be vital to a company's success in this market.
Over the next 10 years, the authors foresee three significant trends related to demographics - more spending on fashion by younger generations, a larger proportion of spending on fashion by women, and more heavy spenders in low-tier cities.
The authors also anticipate three major trends related to consumers' fashion needs - an increasing demand for bigger wardrobes driven by changes that have broadened people's lifestyles, a growing emotional dimension to consumers' thinking about fashion, and opportunities to enhance the shopping experience through new distribution channels and retail formats.
"The fight for share of mind and retail real estate will be even more intense than in the past 10 years," said Yunling Zhou, a BCG project leader and coauthor of the report. "Anticipating such dramatic changes and developing the right offerings early on," she continued, "will be the key for companies with the ambition to win in China."
New Strategies to Meet New Demands
Critical to formulating new strategies will be assessing opportunities to serve low-tier cities, determining which consumer emotional space a brand owns versus which space it should own, and exploring how to create an exciting retail experience for shoppers.
To download a copy of the report, click here.
Source: Boston Consulting Group
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