BrazilLocal apparel and fashion brands in China winning market share
Chinese apparel and fashion brands are becoming increasingly competitive in the domestic market, tapping into the growing preference from consumers for local brands.
A new report by McKinsey & Company has found that Chinese apparel and fashion brands are gaining ground on foreign groups as domestic consumers shift their spending away from international brands.
Over the past decade, Chinese apparel brands have expanded their market share by almost ten percentage points. Local brands are currently assessed to hold a market share of 60%, compared to 53% some eight years previous.
The shift in brand preferences is particularly notable for apparel (shirts, pants and dresses) and footwear (shoes), although Chinese shoppers still prefer international brands when it comes to beauty goods (skincare, cosmetics).
According to the report, consumers who prefer local brands over global brands has increased 1.5 times from 2016 to 2022.
Chinese brands are gaining terrain through a mix of factors. Localization is one such factor – Chinese consumers frequently choose local brands because they think these businesses are more aware of their likes and preferences. Local businesses frequently customize their goods for the home market, giving customers in China a more individualized purchasing experience.
Many local consumers also believe that local brands offer better value and higher-quality goods. These brands have a competitive advantage over international names because they can frequently provide inexpensive rates while upholding high quality standards.
At the supply side of the spectrum, local ‘champion’ brands are building a competitive edge in key areas such as operating models and supply chains to enable greater responsiveness to changing consumer preferences.
Local brands are also adept operators of the various social media and e-commerce channels in China, engaging local key opinion leaders and consumers to connect directly with consumers.
Estimates by GITNUX research and Statista value the size of the global apparel and fashion market at $1.7 trillion, with China accounting for close to one fifth ($318 billion) of the market.
