What they are missing is that mass-market fashion in China has not followed the traditional Western-consumer model, according to The Business of Fashion.
Instead of cheap clothes being sourced by shoppers from big-box stores like Walmart and Target, or specialist low-cost outlets, such as Primark, nearly all the value-end of the market in China is now found online.
Plus, young Chinese consumers are far less brand conscious than generally assumed. They are accustomed to choosing on looks alone, traditionally from small sellers selling nameless, brand-less clothes at wholesale clothing markets – surplus product from huge textile manufacturing hubs in Zhejiang, Fujian and around Guangdong in the Pearl River Delta.
These wholesale markets simply migrated online around a decade ago with the rise of Taobao, Alibaba’s huge C2C e-commerce platform. Now they form “Taobao villages” – groups of sellers that site themselves around manufacturing areas and deal direct with consumers.
International mass-market brands have lost out partly due to the first-mover advantage of their domestic rivals, some believe. Local brands not only produce cut-price fashion at ultra-fast speeds, but equally importantly, China’s post-90s generation wants affordable clothes they like, not necessarily fashionable brands.
Quite different, then, from the luxury end of the market, where there is a huge premium on a “Made in Europe” label.
Zak Dychtwald, founder of Young China Group and author of “Young China”, says many international companies coming into the Chinese market have mistakenly regarded big eastern-seaboard cities like Shanghai as being representative of the rest of the country – which is very far from being the case.
Shanghai represents a snapshot of a China that is rich and sees Westernisation as the norm. But China as a whole does not, he said. In addition, younger people are more confident in their purchasing and style decision-making.
“I don’t think this young generation [of Chinese] likes foreign stuff for foreign stuff’s sake, and I think the older generation undoubtedly did,” Dychtwald explained.
“With the older generation, the semiotics of a purchase [and] what it would mean to people around you and your social standing [were] more important than the actual functionality of a product. You don’t see that nearly as much with Chinese millennials.”
Sourced from The Business of Fashion; additional content by WARC staff