As the local market slows, China’s apparel sector is buoyed by increasing Gen Z spending, extraordinary e-commerce sales, and new technology.
SHANGHAI — Young consumers are one of the fashion industry’s biggest sales drivers in China, and at the international, biannual fashion fair Chic Shanghai, this fact was not easily forgotten.
Chinese Millennials, the post-Eighties and post-Nineties generation, number about 415 million people, or 31 percent of China’s total population, according to a study by Goldman Sachs. Although much has been made of the spending power of this generation, it is the jiulinghou, or post-Nineties Generation Z population, that is making real waves in the retail sector. These consumers, now coming of age, have most likely grown up as only children, due to China’s previous one-child policy, and with relative wealth and economic stability. This cohort is now fueling demand in the country’s fashion sector. According to last year’s Bain & Co. Global Luxury Report, the new generations will deliver 130 percent of market growth, with Gen Z showing “original traits.”
The fair reflected this transformation in consumer tastes, with sections dedicated to younger consumers, including Chic Young Blood, which also gave a platform to young Chinese designers.
“For the fashion industry, the major influence actually comes from the transformation of consumption and also the market. We are now in a phase of consumer upgrading. For example, we can see now that people have more diversified personal consumption and fashion needs,” said Chen Dapeng, president of the China National Garment Association.
Chen noted that the rapid development of technology, prevalence of native mobile payment systems and popularity of e-commerce are also transforming the fashion industry. “[Another] transformation is especially focused on the young generation, because the young generation is very different from previous generations, especially in terms of their ideas of fashion and their demands and needs from the fashion industry. It is totally different. For us as enterprises, and also as the industry, the most important thing that we need to upgrade is our designs and our products, because the consumers who are consuming our products are changing,” Chen said.
Zhong Sun, general manager of Ling Jue Garment, a Chinese manufacturer that is collaborating with young Chinese designers to produce apparel for domestic consumers, agreed that the market is transforming. “The consumer group has changed a lot and the younger consumers have a strong demand for stylish designs. Those born after the Nineties are not like the previous group. They prefer to spend their money and not save it anymore, like previous generations. They can also borrow money from Alipay loans to buy new clothing. This generation has strong demand,” he said.
Zhong also believes that the demands of the new, younger Chinese consumers are pushing local designers to upgrade and develop their designs in order to appeal to the new demographic. “I think that young people used to prefer the Western, Japanese or Korean styles, but now the standard of Chinese designers is rising,” he said. Although his company only manufactures and trades apparel domestically, Zhong is looking to export his Made in China designs within the next three years.
Closer to home, the increasing influence of Chinese designers and varied options also attracts domestic, nationalistic retail buyers, who may once have perceived foreign designs to be superior, but now favor homegrown talent. Tiffy Lin, a buyer for Vous, a Chinese women’s wear fashion studio in Xiamen, agreed. “I look for Chinese designers because I love China. The size and fit is also more suitable for my Chinese customers. We now also have the option to choose some environmentally friendly clothes, but for now it is only an idea,” she said.
The concept of sustainability is starting to seep into buyers’ and consumers’ psyches in China. Visitors to the fair confided that the importance of supporting sustainable manufacturers had only reached the psyche, not the buying plan for now. As Chinese consumers upgrade to a healthier lifestyle, and with local media reports detailing the shutdown of polluting textile manufacturers, there is more discussion around environmentally friendly practices and products. Although many are still reluctant to pay a premium for these products, there is a growing eco-friendly movement in the country, and this was represented at the fair.
The domestic textile industry has been at the forefront of a push toward sustainability, with many manufacturers joining together to share knowledge and promote environmentally friendly practices. Amy Yang represented the China Textile Planning Institute of Construction, a Chinese textile and garment industry think tank, at the fair. “Now there are many companies that say they are green, but we think actually a few of them are not truly. We want to keep our standard, so we created this organization for the whole process from the dyeing to the garment. It is an industry organization including state-owned companies. We are in the middle of the government and the industry. Now we are setting the standard,” she said.
Another way the apparel industry is transforming and upgrading in China is through the implementation and use of new technology to boost demand and ultimately sales. One company showing at the fair was big data firm Zhiyi Tech, which was founded only six months ago. This company has created a system to lift sales data from small online stores, which is publicly available on Chinese e-commerce sites, to offer insights into consumer buying habits and current fashion trends. This big data is then sold back to larger online store owners.
“We do big data, like Taobao and Tmall data, also Jingdong and Pinduoduo, but mainly Alibaba. We collect their data so that big online store owners can know what is selling best now in China. Many online store owners want to know what is best selling in other online stores, and what their selling data looks like, and actually Alibaba doesn’t provide that data, so we provide it to the store owners,” said Miaomiao Wen, chief technology officer of Zhiyi Tech.
Skeptics might say that this is just copycat China 2.0, but this business model is helping fuel the rise of e-commerce fast fashion in the country, and is therefore boosting economic growth.
“The data is open, if you look on Taobao you can see the selling data, but we collect it and process it. Bigger online stores can then copy the smaller online stores’ styles. They can follow thousands of smaller stores and pick the best styles from them and then sell them in their bigger stores. This is the fashion industry, everyone will learn from others. It means you can react very quickly. In a week, you can get exactly the same style,” Wen said. She also disclosed that her company already has more than 100 paid subscribers, mainly large Taobao store owners, including Zhang Dayi, one of the country’s most successful Internet celebrities.
In the context of falling global growth rates, the fair organizer was at pains to point out that China remains the world’s largest retail market with economic growth of more than 6 percent. The Chic Shanghai fair was held over three days at the National Exhibition and Convention Center, running concurrently with the Intertextile Shanghai Apparel Fabrics fair, both of which were held at the NECC. In total, 103,722 visitors attended the fair, which was slightly down from the 112,666 visitors who attending during the same period last year. The fair organizer attributed this drop to the slower market. Exhibitor numbers were up on last year, however, totaling 1,365 domestic and international exhibitors, with 1,453 brands, up from the 1,210 exhibitors that showed last year.
View article on the Women’s Wear Daily website here.