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Domestic market shows vast scope for Chinese apparel firms
Aug '13
Apparel sales continued to increase in the Chinese domestic market, but at a slower pace during the first seven months of the current year.
According to data from the National Bureau of Statistics, large-scale garment enterprises posted retail sales of 617.4 billion yuan during January to July, showing an increase of 11.9 percent year-on-year.
However, the growth rate showed slowing down as the same enterprises registered a year-on-year growth of 17 percent during the corresponding period of last year.
A recent report of the China National Garment Association shows that the domestic apparel sales grew steadily during the first half of this year, but the growth rate slowed down due to the overall economic situation.
The report noted that compared to a relatively slow growth in second-tier markets, growth rate accelerated in third and fourth tier markets, which shows strong vitality and a larger room for growth of domestic apparel firms.
At a time when the Chinese domestic clothing enterprises are under a great pressure due to shrinking demand in the international market, the acceleration of urbanization has provided a new market space for these firms to expand in the domestic market.
In fact, it becomes easier for companies to open retail stores in three and four tier cities, compared to Metropolitan cities, where there is intense brand competition and there is problem of rising rentals.
Market analysts, however, say that in addition to seeking a broader-tier market, the Chinese domestic apparel enterprises are also accelerating their penetration in three and four tier towns due to unavoidable reason of foreign brands entering these towns.
Moreover, Chinese apparel enterprises are also benefiting from the growth in online marketing. A recent survey shows that last year there was over 80 percent increase in domestic online shopping even in villages.
Data from the well-known shopping site Taobao shows that in the first five months of 2013, sales of clothing, including innerwear and sportswear, rose by over 58 percent year-on-year, while those of clothing accessories increased by more than 150 percent year-on-year.
Thus, there is still a great potential for Chinese apparel enterprises in the domestic market.

Fibre2fashion News Desk - India

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