BEIJING — In a country obsessed with online shopping, China’s fashion retailers are having a hard time keeping up.
Online portals like 360buy and Taobao — China’s answer to eBay — are seeing record sales, with the former’s sales of $9.7 billion last year making it the country’s largest online retailer by volume. An estimated 564 million of China’s 1.35 billion people used the Internet last year, encouraged by a growing demand for smartphones and tablets; 242 million of them shopped online.
On paper, that makes the potential for clothing retailers enormous. But China’s young domestic fashion industry, deeply fractured with few labels achieving widespread recognition, is struggling to crack that market.
“E-commerce is a new channel and young people love it, and it is a new way of life that we need to adjust to,” said Yang Herong, director of Zhejiang Chisage Group, which operates domestic labels GXG and One More, on the sidelines of the annual China Fashion Forum in Beijing this week. His firm, which started its domestic brands in 2007, saw growth of 150 percent in 2011 slow to 41 percent last year. Nearly 90 percent of its sales are from brick-and-mortar stores rather than online, though not for lack of trying.
“If you want to sell clothes online, consumers only want to buy cheap, so you cannot make things the same prices as in stores. The platforms are crowded — the existing platforms are not enough. And the advertising and promotions are intense,” said Yang, whose firm is now developing a Web-specific brand to try to avoid poaching from store sales.
The issue confronts retailers at all levels. Japanese jeans label Evisu had the equivalent of $64 million in sales on the mainland last year after just two years of retail operations, capitalizing on a growing appetite for different, less-ostentatious luxury brands. Only 20 percent of those sales came from online operations, said Evisu China chief executive officer Tommy Zhao.
“Our online store serves two purposes. The first is so people from remote areas can see our products and access our products. The second is for information. We keep it updated so customers can come and see our new product lines. But when they want to buy, they still come to our stores,” he said. “It’s very hard to trust online sales and counterfeit is one of the biggest problems.”
Industry leaders say the average Taobao purchase is about 175 yuan, or $28 at current exchange, not a large commitment for something that may be counterfeit or of inferior quality. But ask that same consumer to spend significantly more for brand-name clothing, and they are likely to balk.
“Our clear goal over time is to build a bridge and to build customer confidence and trust,” said Morten Severon, managing director of German online retailer KeenOn Fashion. Its parent, The Otto Group, takes nearly half of its annual revenue of 11.6 billion euros, or $14.49 billion, from e-commerce.
Offering advice to his Chinese counterparts at the forum Thursday, Severon said his business is seeing an internationalization of brands and a steady drift to online purchasing. But the number of orders is shrinking as competition gets stronger.
Increasing the challenge, he added, is that buying clothing is not like buying a book, where a consumer needs to know only the title and author. With apparel, customers want to know the size, the fit, the color and feel before they commit. For that, he said, KeenOn has expanded its presence at fashion exhibitions and added a traditional sales team.
“We need to start where the customers are. The customers are in the old world, and we need to bring them into the new world,” he said. “They will start to buy more and more online, and in time we can reduce the offline strategy and go to more and more online.”
Despite their slow move to the online world, brick-and- mortar retailers here are generally still optimistic, given that overall retail sales growth — while slowing — is still hovering around 14 percent. The forum showcased models like Shanghai’s Seven Days, a project that includes a Web portal for up-and-coming designers as well as several stand-alone shops, as a way to promote domestic designers to a wider audience.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)