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China - Fashion & brand-savvy market holds big players

By Prachi Singh

Aug 30, 2016

Management

Propelled by an ongoing surge in e-commerce and mobile shopping, China is poised to surpass the US this year to become the world's largest retail market. In the light of this research by eMarketer, FashionUnited highlights the most interesting Chinese fashion names that have established a global presence and hold a promising future.

Chinese consumers upbeat despite slow economy

In 2011 the Hong Kong Exchange witnessed almost 90 IPOs, which included big fashion players such as Michael Kors, Prada and Coach. Five years ago China was viewed as the promised land for fashion companies from abroad. There were few local brand names with the same appeal back then and a huge consumer audience with growing spending power. Back to 2016 and the situation almost seems reversed. Although industry experts anticipate further economic slowdown and foreign brands are still immensely popular with Chinese consumers, China's clothing companies have also learned from foreign brands entering their market and have become competitive forces in their own right.

While China has not yet produced fashion companies comparable with the likes of Louis Vuitton or Gucci, Chinese jewellery makers such as Lao Feng Xiang or Chow Tai Fook, do already rank among the world’s biggest luxury names. Also Alibaba has emerged as one of the largest and most profitable names in online retail. FashionUnited delves into the world of these domestic Chinese companies that are turning into global forces to recon with.

ANTA

Fact-file

Company: ANTA - Chinese sportswear giant.
Founded: 1994
Headquarters: Jinjiang, Fujian, China
CEO: Ding Shizhong
Main Brands: ANTA Sports, ANTA Kids and FILA
Turnover: 1.7 billion dollars or 11 billion Chinese yuan (2015)
Retail footprint:7,000 stores


As one of the leading branded sportswear enterprises in China, Anta Sports Products designs, develops, manufactures and markets sportswear, including sports footwear, apparel and accessories. The company has established an extensive distribution network with a leading presence in second and third tier cities in China. Anta Sports was established in 1994, in Jinjiang, Fujian province, and listed on the Hong Kong Stock Exchange in 2007. By 2014, Anta’s market value surged to 6.4 billion dollars bringing it to the fifth position among the list of biggest sporting goods companies globally after Nike, Adidas, Under Armour and Lulelemon.

Anta’s brand portfolio consists of Anta Sports, Anta Kids and Fila (China). Every year the company launches more than 2,000 new footwear designs, about 3,000 apparel products and 1,500 accessories. Anta has an international design team with designers from China, USA, Italy, France, Belgium, Japan and Korea, among others.

The Group expects that there will be a total around 7,100 Anta stores, 1,700 to 1,800 Anta Kids sportswear series stores and 650 to 700 Fila and Fila Kids stores in China by the end of 2016. Anta recently formed a joint venture with the Japanese brand Descente, which specialises in winter sports equipment and apparel and owns other labels such as Le Coq Sportif and Umbro. Under this license agreement, Anta plans to open 100 retail stores of Descente in China.

Zhejiang Semir Garment

Fact-file
Company: Zhejiang Semir Garment
Founded: 1996
Headquarters: Wenzhou, China
Chairman: Qiu Guanghe
Main Brands: Semir, Balabala and Minette
Turnover: 1.4 billion dollars or 9.454 billion Chinese yuan (2015)
Retail footprint: 7,500 stores

Zhejiang Semir Garment or Semir Group was founded in 1996 and currently owns three brands. Its main brand, Semir, is a smart casual fashion label that targets ages 16-25 and has become one of the most coveted brands among young Chinese consumers. The brand’s product portfolio consists of T-shirts, jeans, coats and accessories.

Balabala provides children's clothing targeted at ages 3 to 12 and was launched in 2002. Its products include apparel, accessories and shoes for children.

The company also owns the Paris-inspired womenswear label Minette which it founded in 2012. The company also holds license to sell brands such as MarColor, It Michaa, Sarabanda, Mongdodo, Brother to Buy, Marc O’Polo, GSON, U.T.B. and Spun in China.

Zhejiang Semir Garment manufacturers and distributes casual wear and children's apparel for 7,500 stores across China and posted 1.4 billion dollars or 9.454 billion yuan in sales last year.

Shanghai Meters/bonwe Fashion

Fact-file
Company: Shanghai Meters/bonwe Fashion - Popular Chinese casual wear brand.
Founded: 1995
Headquarters: Shanghai, China
Chairman: Zhou Chengjian
Main Brands: Meters/bonwe, Me & City
Turnover: over 657 million dollars (2015)
Retail footprint: 4,000 stores

Shanghai Metersbonwe Fashion was established in 1995. As one of the leading casual wear brands in China sales exceeded 1.5 billion dollars, 10 billion yuan, at its high point in 2011.

Today, Metersbonwe has over 4,000 brick-and-mortar stores across China with two brands, Meters/bonwe and Me&City. The fast fashion retailer posted a 27 million dollar loss over the first nine months of 2015 on a 7.8 percent drop in revenue to 657 million dollars. Meters/bonwe group has established itself as a premium high street fashion retailer focusing on dressing young men and women in clothes that are fashion forward, elegant and chic.

Experts point out that Metersbonwe belongs to the early generation of private-sector Chinese retailers that witnessed a boom before the rise of ecommerce and mcommerce and is now struggling to catch up. However, on the positive side, the company has announced a private placement plan in July this year to raise up to 1.4 billion dollars ( 9 billion yuan) to invest in its e-commerce strategy. The company said, around 900 million dollars would be spent on construction of an online-to-offline platform (OTO), 75 million dollars is allocated to big data support and another 375 million dollars to industry chain integration.

Belle International

Fact-file

Company: Belle International. Well-known footwear brand.
Founded: 1991
Headquarters: Hong Kong
CEO: Baijiao Sheng
Main Brands: Belle, Staccato, Joy & Peace, Tata
Turnover: 6.13 billion dollars or 47.54 billion Hong Kong dollars (2015)
Retail footprint: 20,873

This Hong Kong-listed company is one of the largest footwear, sportswear and apparel retailers in mainland China. Belle International posted a 38.4 percent year-on-year decline in earnings to 447.16 million dollars (2.93 billion yuan) for the year ended in February. While it saw income from its footwear business, which accounts for more than half of the total revenue of the group, decline 8.5 percent, its performance in the sportswear and apparel segment recorded 16.2 percent year-on-year growth in revenue to 3 billion dollars.

The Belle International Group's business is broadly divided into two main segments – the footwear business and sportswear and apparel business. Company-owned footwear brands include Belle, Staccato, Joy & Peace, Millie’s, JipiJapa, Mirabell, Tata,Teenmix, Senda, Basto, SKAP, :15MINS, Map by Belle and distribution brands include Bata, CAT, Clarks, Fitflop, Hush Puppies, Mephisto and Merrell.

The majority of its sportswear and apparel business is in the form of retail distribution for sportswear brands Nike, Adidas, Puma, Converse, Vans, Timberland, Asics, Onitsuka Tiger and apparel brands Moussy, Sly and Replay.

In February 2016, the company owned around 21,000 retail outlets in mainland China including nearly 14,000 footwear and over 7,000 sportswear outlets. It also operates around 150 stores in Hong Kong and Macau.

Li Ning

Fact-file

Company: Li Ning, China’s leading sportswear brand.
Founded: 1990
Headquarters:Beijing, China
CEO: Li Ning
Main Brand: Li Ning
Turnover: 1.06 billion dollars or 7.1 billion Hong Kong dollars (2015)
Retail footprint: 6,169 stores

The company was founded, and is still led, by the former Olympic gymnast, who won three gold medals at the 1984 Los Angeles games. Following his retirement, Li Ning founded Li-Ning Company in 1990 as a manufacturer and retailer of footwear, apparel, accessories and equipment for sport and leisure.The number of Li Ning-brand outlets in China increased to over 6,000 by the end of June this year, a minor increase compared to end of 2015. Li Ning is aiming to increase its retail counters by 300 to 500 this year. Apart from China, the brand is also sold in Europe by the Scandinavian sports label Luhta. Li Ning’s main export countries are Germany, Russia, Sweden, the Netherlands and France.

China’s best-known sportswear brand posted a turnaround in profit in the first half of 2016. It revealed a 17 million dollars (113 million yuan) profit gain for 2015, compared with a loss of 4.3 million dollars (29 million yuan) a year earlier and after being in the red for almost two years before that.

According to Chen Ke, Shanghai-based retail partner at Roland Berger, “The booming Chinese sports industry will surely prompt demand for more sportswear. Li Ning will benefit from the growth in the industry but in the future it will face intensified competition.”

Lao Feng Xiang

Fact-file

Company: Lao Feng Xiang. Took China-inspired jewellery to global markets.
Founded: 1848
Headquarters: Shanghai, China
GM: Shi, Lihua
Main Brand: Lao Feng Xiang
Turnover: 5.29 billion dollars or 35.02 billion Chinese yuan (2015)
Retail footprint: 3,000

Lao Feng Xiang is known for its production and distribution of gold and silver products, jewellery, diamonds and related products. The brand, founded in 1848, enjoys a leadership position within the luxury jewellery industry. Presenting several collections of fine jewellery and precious artifacts, Lao Feng Xiang is not only a recognised name in China, but has taken the Chinese-inspired designs to global marketplaces.

In 1848, the first Lao Feng Xiang Jewelry Shop opened in Dadongmen, Nanshi, Shanghai. Since then, the company has built a reputation founded on history, culture, innovation and tradition.

Lao Feng Xiang is majority owned by the Shanghai government and counted 3,000 stores throughout China last year. The company opened its first two locations in Hong Kong in May, and plans to have around 20 outlets in the city over the next few years.

Chow Tai Fook

Fact-file

Company: Chow Tai Fook. World's largest publicly-traded jewelry chain.
Founded: 1929
Headquarters: Hong Kong
MD: Kent Wong
Brands: Chow Tai Fook
Turnover: 7.3 billion dollars or 56.6 billion Hong Kong dollars (2015)
Retail footprint: 2,319

Witnessing slowing demand in the home market, jewelry brand Chow Tai Fook plans to expand its wholesale business to the US within a year. While the company's US-based unit Hearts on Fire sells its own-branded diamond jewellery to franchisees, Chow Tai Fook aims to sell polished and rough diamonds to other jewellery retailers. Chow Tai Fook acquired Hearts on Fire for 150 million dollars in 2014, to introduce the US luxury diamond brand to mainland China. However, the economic slowdown pushed the Hong Kong-based retailer to report 46 percent decline in net income for the year ending in March 2016.

Since acquiring Hearts on Fire, the company has expanded the brand in mainland China by about 140 sales locations.The company is also expanding its reach into new markets in Asia, such as Taiwan and South Korea. Its retail footprint is spread across Singapore, Malaysia, Taiwan and South Korea. The company operated over 2,300 stores at the end of March, of which more than 2,000 are located in China.

Alibaba

Fact-file

Company: Alibaba. Leading online and mobile commerce company.
Founded:1999
Headquarters: Hangzhou, China
Executive Chairman: Jack Yun MA
Brands: Alibaba.com
Turnover: 15.7 billion dollars or 101 billion Chinese yuan (2016)
Retail footprint:

Despite the challenges in the Chinese economy, Alibaba has managed to outperform the broader retail market. The company is aggressively pushing its growth plans by investing in logistics and rural consumers to prepare itself for the anticipated further slowdown in China.

Alibaba has also begun showing interest in international expansion - not only by getting foreign vendors on its platforms to sell to Chinese consumers but also by betting on e-commerce companies in neighboring countries like India. The company invested in Indian e-commerce companies Paytm and Snapdeal this year and acquired Southeast Asian e-platform Lazada for one billion dollars.

Alibaba was founded in 1999 by 18 people led by Jack Ma, a former English teacher from Hangzhou. Its major businesses include: Taobao.com, TMall.com, Juhuasuan.com, AliExpress, Alibaba.com, 1688.com, Alimama.com, Alibaba Cloud, Ant Financial and Cainiao. Revenue in fiscal year 2016 was nearly 16 billion dollars, an increase of 33 percent compared to fiscal year 2015, driven by the continued rapid growth of its China commerce retail business.

Pictures:Anta Sports,Semir,Balabala,Meters/bowne,Belle,Li Ning

ALIBABA
Anta Sports
belle international
Semir Group