Chinese consumers are expected to continue to grow in strength and sophistication, tripling their annual expenditures on fashion by 2020 to 1.3 trillion yuan, or $200.7 billion at current exchange, according to a report from The Boston Consulting Group.
This story first appeared in the July 19, 2011 issue of WWD. Subscribe Today.
“It is not enough…for companies to assume that they can sit back and be buoyed along with the coming wave of growth,” cautioned the report, entitled “Dressing Up: Capturing the Dynamic Growth of China’s Fashion Market.” “Growth over the next 10 years will manifest itself in very different patterns from those of the past 10 years.”
It was only in the late Nineties that increasing wealth and an opening society allowed the Chinese to express their individuality through fashion, said the report, noting that companies looking to grow will need to understand demographic and retail changes under way.
Fashion shoppers in their 20s and 30s, who were born after the Cultural Revolution, already outspend the urban average by 18 percent. “They have not ‘eaten bitterness’ the way their parents did, and many have a good job at a foreign or local enterprise — all of which translates into a strong sense of optimism,” the report said.
Women and those living inland or in a “low-tier” city are also expected to spend more on fashion over the coming decade.
Overseas expansion is seen as a key growth driver for many U.S. and European brands that find the consumer market sluggish at home. But many of those brands have just begun to tap the market: Zara has about 70 stores in China, while Benetton has 25 and Gap has five, the report noted. By contrast, early adopters have blanketed the country with stores, many of them franchises. Nike and Adidas each have about 6,000 stores in the country, while Chinese sports brands Li Ning and Anta each have about 7,000 doors.
The report was based on interviews with more than 5,000 consumers aged 14 to 45.