Key Factors To Enter Chinas Luxury Brand Apparel Markets

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In this episode of the China Business Podcast, we speak with Michael Zakkour, principal of Technomic Asia, about the unique and growing markets of China for higher end apparel and accessory brands. Zakkour recently presented a study conducted by Technomic Asia to the Fashion Institute of Technology F.I.T. in New York showing how Chinas consumers are hungry for luxury and affordable luxury brands.

Zakkour says China is not a market where foreign companies can apply techniques or even product lines that are successful in other markets. Further more, he says China is a series of different markets that need to be understood before entering into Chinas second, third, and fourth tier cities, areas that are potentially fertile ground for high-end brands. Chinese consumers love for brands is prevalent in Shanghai and Beijing, the opportunities and new territory is in the interior of China. Below is a chart of the regions that are the new growth areas for companies looking to catch the next China wave.


Resource Technomic Asia study One Year on the Frontlines of Chinas Apparel and Luxury Markets

Zakkour comments in the podcast about the research necessary to determine what aspects of a product line or marketing strategy should be to Chinafied and which should not. Each of these regions and its consumers may well be very different than other areas of China. Zakkour says ! what wor ks in Shanghai may not work in Jiangxi, Shaanxi, or Inner Mongolia. We have seen successes and failures in these markets, what these markets require is a methodological, perhaps even phased approach to expanding into China, added Zakkour.

Fashion Factoids From China

• China is now the #1 apparel and #2 accessory market in the world
• The Chinese consumer market is exploding as tens of millions of people join the middle class every year (300 million and counting)
• There is a growing appetite for niche brands
• There is a new appetite for affordable luxury
• Online apparel sales have boomed in the last 18 months
• Brands and retailers are investing in Tier 2, 3, 4 cities
• Department stores and specialty stores are the major distribution channels for branded apparel
• Casual wear, which comprises 60% of clothing purchases, is growing 19% a year, for example. This reflects a shift toward occasion-based dressing that is, wearing different outfits for work, social occasions and at home