SHANGHAI: Apparel sales are due to rise rapidly in China, with quality, value and ecommerce among the key areas manufacturers should focus on, McKinsey has argued.
The consultancy reported the Chinese apparel market is the second largest worldwide, worth an estimated $110bn (€79.7bn; £67.8bn) in 2009, equivalent to approximately $100 per consumer.
It also predicted the sector could reach $200bn in 2014.
Casual wear, comprising 60% of all purchases, will expand by 19% per year, fuelled by greater enthusiasm for "occasion-based dressing."
Elsewhere, demand for children's clothing will rise 15% per annum, and casual and sports footwear may witness equally favourable shifts, generating $7bn by 2013.
Affluent shoppers, boasting household income of at least 8,000 yuan a month, could drive these processes, boosting their outlay by 30% every 12 months.
Younger demographics also now "set the trends", and 60% of this audience research products and prices on the web, supplemented by blogs, chat rooms and traditional word of mouth.
Ecommerce takes just 1% of apparel revenues, but over a third of people reading information online buy goods using this route, with accessories, clothing and similar items securing 36% of the "digital wallet."
Around 70% of sector sales relate to branded offerings - a total which is still rising - and prior analysis by McKinsey found 45% of customers believe they provide superior quality.
"The Chinese focus on value for money means that there is little loyalty to a specific brand; consumers are constantly looking for the best deal," the consultancy added.
"Even so, stores that feature a single brand are expected to enjoy the fastest growth in the future because they are the most important retail format."
But the apparel segment is deeply fragmented, as the top ten players are responsible for between 5% and 6% of revenues.
"It is also important to remember that China remains a heterogeneous market," the study added.
"Consumer preferences differ from region to region - especially because of vast differences in weather conditions - and even within a region."
Department stores are an essential channel, yielding 30% of volume sales, a figure which climbs for high-end goods, and are generally perceived as offering a "premium shopping experience."
The intense competition to lease concessions means under-performing products can be withdrawn after three or six months.
Nike entered China in the 1980s, initially prioritising Tier 1 cities such as Shanghai and Beijing, and then extended its reach into 6,000 stores nationwide.
Uniqlo, the Japanese fast-fashion chain, moved into China in 2002, soon swapping a low-cost positioning for an up-market, if value-driven, stance.
It now runs 55 branches in large cities and plans to open 1,000 more in the coming decade, having also formed an ecommerce tie-up with internet service Taobao Mall.
Local enterprise Meters/bonwe, which began trading in 1995, operates nearly 80% of its 3,000 outlets through a franchise model, centralising quality-control and training.
As a result, it has overtaken previous frontrunners Baleno and Giordan.
"Given the lack of brand loyalty among Chinese consumers, a brand can easily lose its market positioning," McKinsey warned.
Data sourced from McKinsey; additional content by Warc staff