According to the Boston Consulting Group report of 2011, the Chinese apparel sector is set to become the world’s second largest retail market by 2020 and will account for about 30 percent of the global apparel market’s growth over the next five years.
Until recent years, China has been regarded as one of the main manufacture places of western apparel companies because of its lower labor costs. Nowadays, however hand in hand with the rapidly changing economic and social situation, China has shown the world that it is also a promising consumer market. Especially, apparel retail sales have increased tremendously and therefore offer huge opportunities. Many Western clothing retailers are increasingly viewing China as a huge potential market, because of its rising middle and affluent class and Chinese consumer´s increasing call for western apparel products.
Western products are related with factors such as quality, modernity or also care for the environment. Furthermore, many of the global brands have less market presence in China than in other operating countries. For example, the fast fashion brand Zara only has got 92 stores, H&M had roughly 78 stores at the end of 2011, which is still very few in comparison to the number of stores these companies own in other markets. The US fashion chain Forever 21 has just entered the Chinese market at the end of 2011. Companies who win this market in the next few years will definitely top the global apparel market.
However, even though the potential is huge, winning this market will not be easy. To succeed, western brands need to adapt their strategies to Chinese consumers’ tastes and expectations; this includes the development of brand and company image and product tailoring to the Chinese consumer market. Any company that conducts business in China without effective methods risks a quick exit.
This study has two major purposes: the first is to demonstrate why China is the future sales market for Western apparel companies and the second one to make recommendations for Western apparel companies that want to win the Chinese market.
Research questions
Main questions
1. What are the main factors of China’s economic attractiveness?
2. What could be an effective path to take when entering the Chinese market and which strategies do western apparel companies need to capture China’s dynamic market?
Further questions
1. How could the future of the Chinese retail market look like?
2. Which are the barriers and
Inhaltsverzeichnis (Table of Contents)
- Introduction
- The business location China
- Motivation for engaging in the Chinese apparel market
- Development and distribution of income
- Retail sales in China
- Chinese consumers
- Diversity of consumer groups
- The age factor
- Increasing purchasing activity of consumers in low-tier cities
- The change of lifestyle
- The role of emotional factors
- Diversified distribution channels and retail formats for apparel
- Competitive landscape
- Success factors in the Chinese apparel retail market
- Deciding International phase
- Preparing International phase
- Defining the right retail location and roll-out plan
- The importance of a winning brand and communication strategy
- Determining the right assortment
- Choosing the right distribution channel to consumers
- Traditional distribution channels
- E-Commerce
- Identifying suitable business presence
- Own retail store
- Franchising
- Going International phase
- Being International phase
- Product and market related success factors
- Human Resource management
- Case studies: Examples of successful companies
- Zara
- HUGO BOSS Group
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study aims to explore the growing attractiveness of the Chinese apparel market for Western apparel companies and provide recommendations for successful market entry and operation. It seeks to understand the factors driving this market's growth and identify strategies Western companies can employ to capture this dynamic market.
- The rising economic attractiveness of China's apparel market
- The evolving Chinese consumer behavior and preferences
- Strategies for successful market entry and operation in China
- Key success factors for Western apparel companies in the Chinese market
- Case studies of successful Western apparel companies in China
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction highlights the growing importance of the Chinese apparel market, emphasizing its potential to become the world's second-largest retail market by 2020. It also discusses the need for Western brands to adapt their strategies to appeal to Chinese consumers' tastes and expectations.
The "Business location China" section delves into the factors driving the growth of the Chinese apparel market, including population and GDP growth, development and distribution of income, and the increasing retail sales of consumer goods. It also examines the characteristics of the Chinese apparel market, including dualism in consumption patterns, regional diversity, and market segmentation.
The chapter on Chinese consumers explores the diverse consumer groups in China, focusing on the age factor, the increasing purchasing activity of consumers in low-tier cities, the changing lifestyle, and the role of emotional factors in consumer decision-making.
The chapter on diversified distribution channels and retail formats for apparel provides an overview of the various channels and formats used by Western apparel companies in China, such as traditional distribution channels, e-commerce, and different types of retail stores.
The chapter on the competitive landscape examines the competitive environment in the Chinese apparel market, identifying key players and their strategies.
The section on success factors in the Chinese apparel retail market outlines the key steps Western apparel companies need to take to succeed in this market, including defining the right retail location, developing a winning brand and communication strategy, determining the right assortment, choosing the right distribution channels, and identifying suitable business presence.
The case studies section examines the strategies of successful Western apparel companies in China, such as Zara and HUGO BOSS Group, highlighting their approaches to market entry, brand positioning, and product offerings.
Schlüsselwörter (Keywords)
The key themes and concepts explored in this study include the Chinese apparel market, Western apparel companies, consumer behavior, market entry strategies, success factors, brand positioning, distribution channels, retail formats, and case studies.
- Quote paper
- Dieu Linh Le (Author), 2013, The rising market for Western apparel enterprises in China, Munich, GRIN Verlag, https://www.grin.com/document/349704
