High-end brands are no longer the only winners in China´s luxury industry, as affordable fashion gets the favor of consumers, and high-costs items are mostly purchased outside China, explains business analyst Ben Cavender in the China Daily.
The China Daily:
Ben Cavender, an analyst at the China Market Research Group in Shanghai, said the aggressive expansion of fast fashion brands including H&M and Uniqlo is the result of rising interest among Chinese consumers in products that offer style and quality, instead of premium brands in luxury categories. He said the quick expansion of these companies indicates that more fast fashion brands want to make sure they are building relationships with Chinese consumers early on before these shoppers become familiar with too many other competing brands.
“Chinese consumers are more sophisticated and have more understanding of products,” he said. The government’s austerity campaign has also created an environment that has encouraged consumers to avoid being too flashy and obvious, which has cut into the popularity of luxury brands, Cavender added.
In addition, he said that Chinese consumers still like luxury goods, but most of their purchases are made outside of China because domestic prices are higher for the same items.
Cavender noted the importance for fast fashion retailers of building market share by designing for local customers in terms of fit and style. Designing for China could raise some costs but it makes sense in the long term, he said.
Beyond sprucing up physical stores to attract more customers, online shops can offer a major boost, said Cavender. He said that e-commerce is a boon for regions that don’t have as many malls as first-tier cities. It’s also ideal for customers who are too busy working to go shopping.
He cited Uniqlo’s collaboration with Tmall as an example. Cooperating with Tmall, the leading e-commerce platform of Alibaba Group Holding Ltd, often helps fast fashion retailers to increase their sales. “Brands will have more control if they have their own website, but it is difficult to get the same amount of traffic as Tmall,” he said.
Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.
Are you interested in more speakers on China´s luxury industry at the China Speakers Bureau? Do have a look at this recent list.