Fashion makes a statement for middle-class buyers
The size of the mainland's fashion market is expected to triple over the next decade to 1.3 trillion yuan (HK$1.56 trillion) as younger people spend more on clothing and as spending increases in smaller cities, The Boston Consulting Group says.
'The profile of a typical fashion consumer in China is a middle-class person, aged 30 to 40, who lives in a top-tier city. But that will be very different in 10 years,' BCG partner and managing director Vincent Lui said.
Earlier this year, the management consulting firm interviewed more than 5,000 people aged 14 to 45 in 17 mainland cites.
It found that a Chinese consumer's average spending on clothing - excluding pyjamas, children's wear, socks and accessories - was about 1,150 yuan annually.
'That figure will be growing fast,' said Lui, who compared the figure with shoppers in the United States and Britain, who buy more than 5,000 yuan worth of clothing per year.
BCG estimates in a report that the number of middle-class consumers, who earn 74,000 yuan or more annually, will rise to 140 million in 2020 from the current 50 million. That will drive sales of the country's clothing market to 1.35 trillion yuan in a decade from 398 billion yuan last year.
The report said people between 30 and 35 years old spent most on clothing. But those under 20 spent a larger part of their income - 46 per cent - on clothes, far more than other age groups. 'People born in the 1990s are more familiar with fashion brands and more willing than older generations to dig deep in their pockets,' Lui said.
In addition, the report said more wealthy people would be moving to smaller cities, which meant high-end retailers would have to set up broader sales networks to maintain their exposure to their targeted customers.
Lui said that in the past, 'a big brand name', 'a low-cost supply chain' and 'fast expansion through franchising' were the keys to winning in the market. But in the future, consumers would look for the fashion brands that fitted their goals, such as their pursuit of career success, a wish to have a relaxed life or their desire to be a focal point in social occasions.
Department stores still dominated retailing on the mainland, accounting for 35 to 40 per cent of sales in the fashion market last year, Lui said but in top-tier cities, more people had begun to tire of traditional retailing models and were turning to shopping malls and online shopping portals.