Abstract
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive
environment
Executive summary
Fast increase despite economy down
Domestic sales for clothing and footwear products were not affected by the
economy downturn. The industry had gained a competitive edge on account of its
favourable domestic economic environment including government support
(stimulus package), tariffs and tax incentives, cheap labour and raw material
costs. Nevertheless the global wide economic downturn had affected exporting
sales, whilst some factories had closed down. The competition among market
players is getting fierce, but in 2008 growth in the clothing and footwear
market was faster than previous year growth due to the strengthening
purchasing power.
New labour legislation caused extra costs
In 2008, Chinese labour costs had risen by 20% to 25%. Stringent labour laws
introduced in January 2008 stipulated a minimum wage and fixed overtime,
severance pay, health and accident care and a pension plan for workers, which
imposed extra burdens on manufactures. To the labour intensive clothing and
footwear industry, the new legislation was a big challenge faced by almost all
market players in China.
Fastest growth for trousers
Men' s shorts and trousers had been the fastest growth subsector of all, and
the retail of mid-range and high-end trousers had recorded a dramatic price
rise in 2008 that has pushed up terms of value. There was professional players
such as Joeone that only targeted men' s trousers. All the signs indicate that
a new round of restructuring is surrounding the trousers market. Consumers
will prefer more fashionable and branded trousers. The market has entered a
new cycle of branding while the market is upgrading comprehensively.
More premium brands emerge in the market
Consumer purchasing preferences shifted to premium brands as the market
entered a mature stage of development for some products like suits, men and
women' s outwear and footwear. The premium market is led by global players,
whilst several domestic players have built strong international brands with
strong presence in the global market. Spending power in the country is growing
rapidly along with increasing disposable incomes. Mass market brands meanwhile
are being targeted at the quality- and price-conscious middle classes. For
some urban consumers the brands and style have become more important factors
than the price as they become slightly less price-sensitive.
Market will continue boom with stable demands
The Chinese clothing and footwear market is expected to show good performance
in 2009. The emergence of China as one of the largest consumer markets will
continue to spur consumption in the coming years. Compared with the previous
year' s market performance, the 2009-2013 market will grow at slower speed in
the face of the current economy situation, despite the rise in purchasing
power and preference for branded products, mass segment products will continue
to dominate purchases. Changing trends and rising consumption will give rise
to a new era of clothing and footwear industry in China.
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