Fash­ion in­dus­try ready for change in China

China Daily (Canada) - - FRONT PAGE - By WANG YING in Shang­hai

wang_y­ing@chi­nadaily.com.cn

China’s fash­ion in­dus­try could lead other in­dus­tries in the coun­try into higher end, and Shang­hai is poised to be at the fore­front, ac­cord­ing to a new re­port.

By an­a­lyz­ing its fash­ion in­dus­try char­ac­ter­is­tics, China stands ready to shift its cloth­ing in­dus­try from man­u­fac­tur­ing­cen­tered to de­sign-fo­cused, ac­cord­ing to the Blue Book of China’s Fash­ion In­dus­try 2014-2015, a pub­li­ca­tion pub­lished by a re­search cen­ter jointly es­tab­lished by China Europe In­ter­na­tional Busi­ness School (CEIBS) and the Peo­ple’s Gov­ern­ment of Jing’an dis­trict of Shang­hai.

The Blue Book also sug­gested the in­crease savvy con­sumers will cre­ate op­por­tu­ni­ties for av­er­age brands.

This is the only thor­ough re­search re­port on China’s fash­ion in­dus­try re­leased af­ter the global fi­nan­cial cri­sis in 2008. Based on abun­dant data, case stud­ies and ex­perts’ re­search and anal­y­sis, the re­port presents a per­spec­tive on China’s fash­ion in­dus­try de­vel­op­ment.

For ex­am­ple, the book ad­vised China to in­clude fash­ion in­dus­try de­vel­op­ment into the na­tion’s mid- to long-term plan, and to choose some model cities for the fash­ion in­dus­try.

Mean­while, the re­port in­di­cates that with the rapid growth of China’s fash­ion en­ter­prises, some world-class fash­ion com­pa­nies will rise in China.

“The CEIBS-Jing’an In­ter­na­tional Fash­ion In­dus­try Re­search Cen­ter will pub­lish the blue book on an an­nual ba­sis,” said Sun Ping, deputy chief of the Jing’an dis­trict.

The lux­ury mar­ket was slightly down from 2013 by about 1 per­cent at 115 bil­lion yuan in 2014, im­pacted most by a slow­down in watches, men’s wear and leather goods, said Bruno Lannes, part­ner of Bain & Co in the Shang­hai of­fice.

“At the same time, changes in choice of pur­chas­ing chan­nel and lo­ca­tion have evolved sig­nif­i­cantly,” said Lannes. Up to 75 bil­lion yuan is es­ti­mated to be spent over­seas through agents.

“In spite of a slower eco­nomic growth, a huge amount of over­seas spend­ing, over­sup­ply of high-end shop­ping malls, e-com­merce, etc., China will re­main the best mar­ket for global pres­ti­gious brands,” said Wang Depei, vice-chair­man of China So­ci­ety of Eco­nomic Re­form.

China’s im­ports fell to 873.9 bil­lion yuan in April, a 16.1 per­cent drop year-on-year, while ex­ports also de­clined 6.2 per­cent, ac­cord­ing to the Gen­eral Ad­min­is­tra­tion of Cus­toms.

The slower econ­omy should pose a neg­a­tive ef­fect to­wards top brands’ sales, but Wang fore­casts the econ­omy will pick up in three to five years, with a greater growth.

“Chi­nese cus­tomers are the first lux­ury spenders world­wide,” said Michel Gut­satz, ad­junct pro­fes­sor of mar­ket­ing from CEIBS.

Ac­cord­ing to Gut­satz, the num­ber of Chi­nese out­bound trav­el­ers has grown by three times over the last decade, and Chi­nese lux­ury spend­ing abroad has in­creased 16 times.

The latest pol­icy of an av­er­age 50 per­cent tax cut for 14 cat­e­gories of prod­ucts, mostly for top-end con­sumer prod­ucts, is just the be­gin­ning for pro­mot­ing more do­mes­tic con­sump­tion for im­ported brands, added Wang.

There will be a huge de­mand for top-level brands af­ter a cap­i­tal restruc­tur­ing in the next a cou­ple of years, said Wang.

“The spring for Chi­nese brands is ar­riv­ing,” said Guo Xi­ul­ing, founder of Chi­nese brand Sand River.

“Chi­nese brands need to es­tab­lish our own value, and in the process of mak­ing us lux­ury brands, we need to stick to the Chi­nese cul­ture,” said Guo.

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