A surge in nationalist sentiment and growing hostility to foreign labels is compelling global fashion brands to reduce their footprint in China. A report by SCMP indicates, US clothing brand Gap is reducing its retail footprint in China by cutting down the number of stores to 143. And experts say, foreign brands in China continue to struggle with competition from domestic brands that offer cheaper products via live-streaming and e-commerce platforms.
Around 62 per cent of Chinese consumers bought clothes via e-commerce platforms in 2022, as per data from iiMedia Research while 58.5 per cent customers continue to buy clothes through traditional offline and online platforms. They spend between 201 and 600 yuan on clothing purchases while prices of brands like Gap and Zara range between 300-600 yuan.
The apparel industry in China continues to adopt more local elements to cater to the demands of young Chinese consumers, says the “China Youth Consumption Report” from iiMedia Research. Western firms’ boycott of Xinjiang cotton has accelerated this trend with search for Chinese clothing brands increasing 137 per cent, reveals Baidu’s 2021 big-data search report. Younger consumer sare also opting for Chinese brands, says Yanie Yanson, Founder, Pompom.
Swedish brand H&M’s sales declined 40 per cent Y-o-Y in fourth quarter 2021 fiscal as it publicly boycotted Xinjiang cotton. The brand closed its flagship Shanghai store in June though it returned to Tmall later. Owned by the Gap Group, Old Navy closed all stores and exited the Chinese market in March 2020 to expand business in North America. Similarly, British clothing brands Top Shop and New Look suspended operations in China in 2018 due to weak performance.
What’s more, monotonous designs are also preventing international fast fashion brands from expanding their business in China. Lower prices, diverse designs, and higher quality, are helping Chinese brands boost business locally. This has made the clothes market in China extremely competitive.
By Fashionating World