China's Changing Fashion Landscape
Feb 6, 2015
China’s fashion landscape is vastly changing. Once upon a time any European luxury brand could open a store and sales of its products were guaranteed. If it was manufactured in Europe, had a swanky heritage or slick advertising, it was enough to reep profits in an ever-buoyant Chinese market.
But these times have changed. Customers have become more sophisticated and discerning, and along with its market, they have grown up. They no longer buy everything that is put in front of them. Even their own local brands are having a tougher time than in the early noughties. The European high street influence has brought a new sensibility to the Chinese customer. With the introduction of brands like Zara and considered low-cost fashion, Chinese brands flooding the market with mass but mediocre-designed product are seeing stiff competition.
International fast fashion brands have changed the Chinese market
The strategy for these companies was to retail in China’s 2nd and 3rd tier cities with cheap fashion, avoiding distribution in more cosmopolitan places like Hong Kong, Shanghai and Beijing. But now these cities have seen an influx of international fast fashion brands, like H&M, Mango, Zara and Uniqlo. As these companies are searching for growth and expansion it is mainland China they are looking toward.
Interestingly, a new breed of showrooms are also popping up, with China realising it doesn’t need to go abroad to find designers, they will now come to them. New multi-brand boutiques are catering to a customer who is becoming less interested in generic fashion and wants to be associated with something considered and unique.
The European showroom model, which sees a company distribute a portfolio of brands to stores in a particular market, is starting to be adopted by the Chinese. This means Chinese store owners will only have to deal with the showroom for distribution, shipping, taxes and payments, when otherwise it would have to negotiate directly with each brand.
February sees the launch of showroom Both, a new concept developed by a wealthy Chinese entrepreneur, who also have its own e-commerce and soon own brick and mortar stores. Both has curated a mix of up and coming European brands with the aim to distribute them in mainland China, including Belgium’s N.D.C. Made by Hand and London-based U Clothing.
Both’s supply chain director Shawn Yuan stated the Chinese market is “ready for new brands and concepts. Shanghai doesn’t have many multi-brand showrooms which offer the same level of luxury, fashion and service as the Europeans do." That’s why the majority of stores still go to Milan and Paris during the buying season as they cannot buy these brands back home. “We hope within three seasons to establish a track record of successful brands and are looking for long term growth, rather than a quick investment and turnaround.”