By  on March 22, 2005

SHANGHAI — When elite golfers line up a putt, they don’t just aim for the hole, they zero in on a particular blade of grass along the rim of the hole. By aiming that precisely, they greatly improve their chances of getting the ball into the cup.

Marketers are finding they need to take a similarly pointed approach to entering the Chinese apparel market. With 1.3 billion residents, China seems to offer a vast pool of potential shoppers. But the vast majority of Chinese shoppers live in poor rural areas and lack the disposable income to pay for branded clothing and the interest to seek it out.

To find attractive consumer segments, marketers focus on shoppers in urban areas, where per-capita incomes are more than triple those in the countryside.

Experts vary on how to define apparel market segments in China. In general, any garment priced at $50 or higher is considered high-end, but many studies use more international standards.

Ivan Kwok, a fashion industry analyst with Boston Consulting Group’s Shanghai office, said many international brands jack up their retail prices or offer only their most premium products in China. Coupled with the effects of import and luxury taxes, this can make their products about 30 percent more expensive in China than in the U.S. or Europe.

“People are brand-driven in this market, so brands can’t sell at the midprice range because of the perception of poor quality,” Kwok said. “There is a big gap in the comparative middle, with no equivalent of the Gap or Old Navy, which is what it takes to be sustainable.”

Kwok added that Esprit, which is considered a high-end brand in China, is the international label with the most substantial penetration of the Chinese market.

Qin Guoliang, president and design director of Hangzhou Hallowell Garments, which sources China production for international brands such as Fubu, said he believes most foreign brands selling in China are slowing their growth because their prices are too high.

“The rich in China are too few in number and most people’s incomes are too low to afford luxury goods,” he said. “In China, the interest in brands is the highest, but the ability to buy them the lowest.”

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