CHINA APPAREL MARKET UPDATE 2019 - PART 1: MARKET OVERVIEW AND COMPETITIVE LANDSCAPE ANALYSIS - Fung Business Intelligence
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CHINA APPAREL MARKET UPDATE 2019 PART 1: MARKET OVERVIEW AND COMPETITIVE LANDSCAPE ANALYSIS Asia Distribution and Retail Jun 2019
TABLE OF CONTENTS Key Takeaways……………………………………….p1 Market Overview…………………………………p2 Movement of Local Apparel Brands………..p13 Movement of Foreign Apparel Brands….p27
KEY TAKEAWAYS
China’s apparel market faces headwinds Specialist retailers, department stores take hold in China Market share of
• The apparel market continued its uptrend in 2018, apparel distribution top 5 apparel
posting the highest yoy growth since 2014 brands, 2018
• Apparel sales at department stores have been falling
over the years amid stiffer market competition and 1. Adidas, 1.9%
• However, mounting economic uncertainty is posing
significant challenges for the apparel market challenges from e-commerce players 2. Nike, 1.9%
• Internet retailing has kept delivering strong growth in 3. HLA, 1.1%
• Sales growth of the market is estimated to decelerate to
3.5% and 3.2% in 2019 and 2020 respectively recent years, making it the fastest-growing retailing 4. Uniqlo, 1.0%
channel in China’s apparel market 5. Anta, 1.0%
Womenswear remains the largest sub-sector ;
childrenswear and sportswear show vast growth Local apparel brands accelerate Foreign apparel brands seek
potential expansion at home and abroad opportunities in China; yet, some
• Both womenswear and menswear sectors have shown • Diversifying product lines to struggle to make headway
some improvements in sales after several years of increase market size to invigorate • Foreign players continue to crack
decline led by growing saturation brand values the lucrative China market
• Childrenswear has delivered strong growth momentum • Launching flagship stores and • A number of players have
following the full implementation of two-child policy concept stores to boost brand expanded local store networks
starting January 2016 image and launched their first/ largest
• Sportswear posts the highest sales growth among all • Entering new markets and global flagship store in the
other key apparel sectors expanding store networks country
• But due to overall macro uncertainty, sales growth of all overseas to ramp up • Yet, some failed to make a profit
apparel sub-sectors is expected to decline in 2019. international presence and finally exited the market
1
Market Overview
2
MARKET OVERVIEW
- CHINA’S APPAREL MARKET FACES HEADWINDS
Sales of apparel in China, 2014-2020
China’s apparel sales reached 2,077.4 billion yuan
in 2018, increasing at a rate of 7.8% yoy, the
2,500 9% highest yoy growth since 2014.
7.8%
8%
2,000
6.5% 7% Driven in part by the consumption upgrading
6.2%
5.6% 5.6%
trend and stable demand among local consumers
6%
1,500 with improved living standard and higher income
5% growth, the apparel market regained its growth
3.5% 4% momentum in 2017 and continued the uptrend in
1,000 3.2%
2018.
3%
2%
500
However, mounting economic uncertainty is
1%
posing significant challenges for the apparel
1,622.8 1,714.1 1,810.0 1,927.9 2,077.4 2,149.9 2,217.8
0 0% market. Sales growth of China’s apparel market is
2014 2015 2016 2017 2018 2019e 2020e estimated to decelerate to 3.5% and 3.2% in 2019
billion yuan yoy growth and 2020 respectively
Source: Euromonitor International; compiled by Fung Business Intelligence
3
SALES OF KEY SUB-SECTORS
Sales of key sub-sectors of China’s apparel market, 2014-2020
1200 25%
By category, womenswear remained
1025.7 1048.8
999.1 the largest sub-sector of China’s
1000 928.5
873.8
20% apparel market in terms of sales in
783.8
828.9 2018.
800
billion yuan
15%
600 537.7
572.6 583.5 592.8 Both sportswear and childrenswear
512.0
470.3 491.7 saw double-digit yoy sales growth in
10%
400
2018, outperforming that of
264.8 286.7 310.4 womenswear and menswear. But
261.0
221.5 234.7
166.9 190.4 209.1 5% due to overall macro uncertainty,
200 148.3 180.0
127.1 140.0 157.1 sales growth of all apparel sub-
sectors is expected to drop
0 0%
2014 2015 2016 2017 2018 2019e 2020e significantly in 2019.
Sales of womenswear Sales of menswear Sales of childrenswear
Sales of sportswear yoy growth of womenswear yoy growth of menswear
yoy growth of childrenswear yoy growth of sportswear
Source: Euromonitor International; compiled by Fung Business Intelligence
4
SALES OF KEY SUB-SECTORS
- WOMENSWEAR: YOY GROWTH PICKS UP IN 2018
Sales of womenswear in China’s apparel market, 2014-2019
Market share of womenswear in China’s apparel market, 2018
1,200 20%
999.1 1025.7
1,000 928.5
873.8
828.9 15%
783.8
800
billion yuan
600
7.4%
10%
48.1%
400
6.3% 7.6% 5%
5.8% 5.4% 2.7%
200
0 0%
2014 2015 2016 2017 2018 2019e
Sales of womenswear yoy growth of womenswear
Source: Euromonitor International; compiled by Fung Business Intelligence Source: Euromonitor International; compiled by Fung Business Intelligence
After several years of decline as a result of growing saturation, the womenswear sector picked up pace in 2017 and 2018 with sales growth rising to
6.3% yoy and 7.6% in 2017 and 2018 respectively.
That said, due to the overall market uncertainty, sales growth of womenswear is estimated to drop significantly to 2.7% in 2019.
5
SALES OF KEY SUB-SECTORS
- MENSWEAR: SHOWS SOME SIGNS OF IMPROVEMENTS IN 2018
Sales of menswear in China’s apparel market, 2014-2019 Market share of menswear in China’s apparel market, 2018
1000 20%
800
15%
600
572.6 583.5
billion yuan
537.7
491.7 512.0
470.3
400
10%
27.6%
200
3.8%
5.0%
6.5% 5%
4.6%
2.8%
1.9%
0 0%
2014 2015 2016 2017 2018 2019e
Sales of menswear yoy growth of menswear
Source: Euromonitor International; compiled by Fung Business Intelligence Source: Euromonitor International; compiled by Fung Business Intelligence
Menswear has the second largest market share in China’s apparel market, just behind womenswear. In 2018, sales of menswear represented 27.6% of
the total apparel sales in China.
Similar to the womenswear sector, the menswear sector has also become increasingly saturated. It showed some improvements in sales in 2017 and
2018. However, as with the womenswear sector, sales growth is expected to drop significantly this year due to the uncertain market economic
environment.
6
SALES OF KEY SUB-SECTORS
- CHILDRENSWEAR: TWO-CHILD POLICY SHORES UP GROWTH MOMENTUM
Sales of childrenswear in China’s apparel market, 2014-2019 Market share of childrenswear in China’s apparel market, 2018
1000 20%
16.2%
800 14.6%
15%
12.2%
600
billion yuan
9.2% 10%
400
7.9%
6.0%
10.1%
140.0 180.0
209.1 234.7
5%
200 157.1
127.1
0 0%
2014 2015 2016 2017 2018 2019e
Sales of childrenswear yoy growth of childrenswear
Source: Euromonitor International; compiled by Fung Business Intelligence Source: Euromonitor International; compiled by Fung Business Intelligence
Although childrenswear took up only 10.1% share in China’s apparel market, the sector has delivered strong growth momentum following the full
implementation of two-child policy starting January 2016.
The National Health and Family Planning Commission predicted that the number of newborns to reach 17.5 – 21.0 million annually during the 13th FYP
period (2016 – 2020), up from the annual births at around 16 million between 2003 and 2013. Baby and toddler wear is expected to be the main
powerhouse for the childrenswear sector.
7
SALES OF KEY SUB-SECTORS
- SPORTSWEAR: STRONGEST SALES GROWTH AMONG OTHER KEY SUB-SECTORS IN 2018
Sales of sportswear in China’s apparel market, 2014-2019 Market share of sportswear in China’s apparel market, 2018
1000 20%
19.5%
800
16.3% 15%
14.1%
600
billion yuan
10.1% 12.5%
400
8.3%
10%
12.7%
264.8 286.7
221.5 5%
166.9 190.4
200 148.3
0 0%
2014 2015 2016 2017 2018 2019e
Sales of sportswear yoy growth of sportswear
Source: Euromonitor International; compiled by Fung Business Intelligence Source: Euromonitor International; compiled by Fung Business Intelligence
Sportswear registered sales growth of 19.5% yoy in 2018, well above the total apparel sales growth of 7.8% yoy. Sportswear also
posted the highest sales growth among all other key apparel sectors, indicating its vast growth potential.
8SALES OF KEY SUB-SECTORS
- SPORTSWEAR: STRONGEST SALES GROWTH AMONG OTHER KEY SUB-SECTORS
Sportswear (apparel and footwear) sales by category, 2018 By category, sports-inspired footwear and sports-
inspired apparel are the two largest segments in
Sports-
Performance China’s sportswear market. The combined sales of the
apparel , 14.8% two segments totaled 144.5 billion yuan in 2018, or
inspired
footwear, around 54.5 % of the total sportswear sales in China.
33.0% Outdoor
apparel , The propelling growth in the sportswear sector is
7.5% mainly driven by the following factors:
264.8 billion yuan, • Rising levels of health and well-being awareness
up 19.5% yoy and increased sports participation.
Outdoor • Government policies to promote national health
footwear , and sports participation serve as a boost to the
3.8% sports industry. Recent policies include the “2016-
Performance 2020 National Fitness Plan” released in June 2016;
Sports-inspired
footwear , apparel , 21.5%
the “13th Five Year Plan for the Development of
19.3% Sports Industry” released in July 2016; and the
“Guiding Opinions of the State Council on
Source: Euromonitor International; compiled by Fung Business Intelligence Speeding up the Development of the Competitive
Sports Industry” released in December 2018.
9DISTRIBUTION CHANNELS
- SPECIALIST RETAILERS, DEPARTMENT STORES TAKE HOLD IN CHINA APPAREL DISTRIBUTION
Market share (retail sales) by distribution channel for apparel and footwear in China, 2014-2018
(in %) 2014 2015 2016 2017 2018
Apparel sales at department stores have
Store-based retailing 87.5 81.5 76.2 71.4 68.1 been falling over the years amid
I. Grocery retailers 4.8 4.0 3.3 2.6 2.1 intensifying market competition and
II. Non-grocery retailers 44.1 42.2 41.1 39.8 39.6 challenges from e-commerce players.
• Clothing and footwear specialist retailers 20.8 20.7 20.5 20.2 20.0
• Leisure and personal goods specialist retailers 11.8 11.5 11.8 12.1 12.6
• Other non-grocery retailers 11.5 10.1 8.7 7.5 7.1 Internet retailing has kept delivering
III. Mixed retailers 38.6 35.3 31.9 29.0 26.4 strong growth over the past few years,
• Department stores 38.6 35.3 31.9 29.0 26.4 making it the fastest-growing retailing
Non-store retailing 12.5 18.5 23.8 28.6 31.9 channel in China’s apparel market. The
IV. Home shopping 0.1 0.1 0.1 0.1 0.1 channel is predicted to keep growing at a
V. Internet retailing 12.4 18.4 23.7 28.5 31.8
faster rate in the coming years.
Total 100 100 100 100 100
Source: Euromonitor International; compiled by Fung Business Intelligence
10COMPETITIVE LANDSCAPE
- TOP 10 APPAREL BRANDS IN CHINA
Market share of Top 10 apparel brands in China, 2018
Market share
Market share Major category
(yoy change, ppt)
1. Adidas 1.9% ↑ 0.3 Sportswear
2. Nike 1.9% ↑ 0.3 Sportswear
3. HLA 1.1% ↑ 0.1 Menswear
4. Uniqlo 1.0% ↑ 0.1 Womenswear, menswear,
childrenswear
5. Anta 1.0% ↑ 0.2 Sportswear
6. Li Ning 0.6% -- Sportswear
7. Skechers 0.6% ↑ 0.2 Sportswear
8. Balabala 0.5% ↑ 0.1 Childrenswear
9. Jack & Jones 0.5% -- Menswear
10. Xtep 0.5% ↑ 0.1 Sportswear
Source: Euromonitor International; modified by Fung Business Intelligence 11COMPETITIVE LANDSCAPE
- TOP 10 APPAREL BRANDS IN CHINA
Top 10 listed apparel companies in China (by market cap), 2018
Average market cap in
Operating income in 2018
2018 Major category
(billion yuan)
(billion yuan)
1. Anta 90.43 23.41 Sportswear
2. HLA 47.81 19.09 Menswear
Menswear, womenswear,
3. Semir 27.72 15.75
childrenswear
4. Li Ning 15.40 10.51 Sportswear
5. Dazzle Fashion 12.68 2.10 Womenswear
6. Hongdou Group 12.63 2.48 Menswear
7. Peacebird 12.44 7.71 Menswear, womenswear
8. Bosideng 9.16 11.99 Down wear
9. Xtep 8.87 6.20 Sportswear
10. Lilanz 8.46 3.60 Menswear
Source: iiMedia; modified by Fung Business Intelligence
12Movement of local apparel brands
13LOCAL BRANDS ACCELELATING EXPANSION IN CHINA
Diversifying product lines to increase market size to invigorate brand values
– selected cases
14Diversifying product lines to increase market size to invigorate brand values
COMPETITIVE LANDSCAPE
– JNBY unveils new fashion brands starting from April 2018 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In June 2018, JNBY announced In February 2019, JNBY rolled
In April 2018, JNBY launched the launch of a new out a new menswear designer
SAMO, a designer fashion sustainable fashion brand brand “A Personal Note 73” .
brand targeting professional “REVERB” in China. Targeting The brand targets young and
male customers in China. The young and fashionable aspirational consumers with
philosophy of the new millennials, the brand puts knowledge about fashion and
menswear brand is “simplified, strong focus on social design.
but better”. SAMO’s design responsibility and sustainability.
focuses on elegance, simplicity, Italian fashion designer Andrea
charming and versatility. REVERB embraces “circular Pompilio, will design two
fashion” as its brand collections a year for the new
philosophy, focusing on the brand, with the first collection
design concepts of “Athleisure, available in fall 2019. JNBY
Genderless and Sustainability”. plans to open 10 stores in 2019,
All apparel items from REVERB with one-third of them in tier-1
uses natural materials with cities.
organic certification and high-
tech materials certified by
SAMO’s promotional material
Swiss Bluesign Standard.
Source: News, Companies’ websites; compiled by Fung Business Intelligence
15Diversifying product lines to increase market size to invigorate brand values
COMPETITIVE LANDSCAPE
– JNBY to launch multi-brand store “LA SU MIN SO LA” in December 2018 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In December 2018, JNBY announced to launch a
multi-brand store “LA SU MIN SO LA” for designer
brands in China, a move to align with the company’s
multi-brand strategy and expand its businesses
though horizontal diversification.
LA SU MIN SO LA will serve as a platform for
designer brands to showcase their products.
Adopting the concept “Better Design, Better Life”,
the store will operate as an incubator for designer
brands and help international designer brands adapt
to local operation.
LA SU MIN SO LA’s product lines cover various
categories, including clothing, footwear, handbag,
accessories and lifestyle products.
LA SU MIN SO LA’s marketing material
Source: News, Companies’ websites; compiled by Fung Business Intelligence
16Diversifying product lines to increase market size to invigorate brand values
COMPETITIVE LANDSCAPE
– HLA's womenswear brand OVV and menswear brand AEX open first physical store - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In January 2018, OVV and AEX, womenswear brand
and menswear brand under HLA opened its first
physical store, which signifies further landing of the
Group's multi-brand strategy.
Currently, OVV and AEX’s target markets are mainly
the tier-2 and tier-3 cities. Since 2017, HLA has
accelerated its multi-brand, multi-category and
multi-channel investment to build up its youthful
image, hoping to widen the customer base of the
Group.
OVV x AEX’s flagship store in Huaihai Road Middle, Shanghai
Source: News, Companies’ websites; compiled by Fung Business Intelligence
17LOCAL BRANDS ACCELELATING EXPANSION IN CHINA
Launching flagship stores – selected cases
18Launching flagship stores
COMPETITIVE LANDSCAPE
– Semir launches first fresh image, stylish concept store in Shanghai - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In October 2018, Semir opened its first fresh image,
stylish concept store at Shanghai Jiading CITIC Pacific
Wanda Plaza.
The store is an experiential concept store that aims
to meet the needs of the young consumer group. Its
design philosophy is to create a “scenario +
interactive” shopping experience for customers.
Semir has created a special “KOL leisure zone”,
where shoppers can take photos and interact with
each other while shopping at the store
Semir’s first flagship store at Shanghai Jiading CITIC Pacific Wanda Plaza
Source: News, Companies’ websites; compiled by Fung Business Intelligence
19Launching flagship stores
COMPETITIVE LANDSCAPE
– FILA opens two flagship stores in Shanghai in May 2018 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In May 2018, sportswear brand FILA which is owned
by ANTA Sports opened two flagship stores in
Nanjing Road East and Huaihai Zhong Road in
Shanghai. The two stores offer a full range of FILA’s
products including childrenswear.
According to the annual report of ANTA Sports, by
the end of December 2018, there were 1,652 FILA
stores (including the independent stores of FILA KIDS
and FILA FUSION stores) in the Greater China region.
Opening ceremony of the flagship store in Nanjing Road East, Shanghai
Source: News, Companies’ websites; compiled by Fung Business Intelligence
20LOCAL BRANDS ACCELELATING EXPANSION OVERSEAS
21Expanding footprints overseas
COMPETITIVE LANDSCAPE
– HLA opens stores in Singapore in May 2018 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In May 2018, HLA opened its first store in Singapore
in Suntec City Mall. With an area of 350 sqm, the
store has entirely different design compared to HLA’s
other stores – the storefront only shows the HLA
brand logo in white, instead of showing the usual
brand logo with both Chinese and English characters.
As of to date, HLA has opened a total of three stores
in Singapore.
Indeed, HLA opened its first overseas store in Kuala
Lumpur, Malaysia in July 2017; and it has more than
20 stores in the nation.
According to HLA, the brand will further expand in
Singapore, Malaysia and Thailand in the next three
years.
HLA’s store in Singapore, Jurong Point Shopping Center
Source: News, Companies’ websites; compiled by Fung Business Intelligence
22Expanding footprints overseas
COMPETITIVE LANDSCAPE
– Bosideng re-launches flagship store in London in September 2018 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In July 2018, Bosideng announced to re-launch its
flagship store in London in September 2018. At the
same time, the Group will rejuvenate its main brand
“Bosideng” by focusing on down jackets business,
and spinning off other non-down jacket businesses
including menswear, home wear and childrenswear.
It will also close around 70% to 80% of Bosideng’s
nonprofitable stores over the next three years.
Bosideng’s flagship store in London
Source: News, Companies’ websites; compiled by Fung Business Intelligence
23Expanding footprints overseas
COMPETITIVE LANDSCAPE
– Lily opens first store in Europe in Barcelona, Spain in January 2019 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In January 2019, Chinese apparel brand Lily
announced that it has opened a flagship store in
Barcelona, Spain, which is also its first store in
Europe. The flagship store in Barcelona will
showcase the new collections for each season at the
same time as their stores in China.
Following Barcelona, Lily also plans to open new
stores in other major business areas such as Madrid,
as well as enter 20 department stores in Spain in the
next three years.
Lily’s promotional materials online
Source: News, Companies’ websites; compiled by Fung Business Intelligence
24Expanding footprints overseas
COMPETITIVE LANDSCAPE
– HLA taps into the Thailand market in April 2019 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
HLA introduced its fast fashion brand HLA JEANS
and mid- to high-end womenswear brand OVV to
the Thailand market in April 2019. As the first two
Chinese brands entering a tier-1 commercial hub in Storefront of HLAJEANS at Central World, Bangkok
the Southeast Asian region, HLA JEANS and OVV are
launched in Central World shopping mall, which is
located in Thailand’s core commercial district and
also one of the largest shopping malls in the region.
Heilan Home has also adjusted their product lines in
Thailand to better fit with local tastes and weather,
with a focus on developing T-shirt and light jacket
products.
HLA enters the Thailand market by introducing OVV and HLA Jeans
Prior to its launch in Thailand, the company also
opened its first local store in Singapore and Malaysia
in May 2018 and July 2017 respectively.
Marketing material of HLA Jeans
Source: News, Companies’ websites; compiled by Fung Business Intelligence
25Expanding footprints overseas
COMPETITIVE LANDSCAPE
– Balabala opens two stores in Hong Kong in June 2018 - MOVEMENT OF LOCAL APPAREL BRANDS (EXPANSION)
In June 2018, Semir's kidswear brand Balabala
officially entered the Hong Kong market by opening
its first two stores in Olympian City III and Hollywood
Plaza.
Balabala revealed that the brand plans to open
approximately 20-30 stores in Hong Kong over the
next three years. It hopes to use Hong Kong as a
stepping stone to execute the company’s global
expansion plan in terms of acquisition, joint venture
and overseas franchising.
Balabala’s store at Olympian City III
Source: News, Companies’ websites; compiled by Fung Business Intelligence
26Movement of foreign apparel brands
27FOREIGN BRANDS ENTERING THE CHINA MARKET
– Selected cases
28Foreign apparel brands entering China market
COMPETITIVE LANDSCAPE
– German luxury skiwear brand Bogner enters the China market - MOVEMENT OF FOREIGN APPAREL BRANDS (ENTRY)
In November 2018, German luxury skiwear brand
Bogner opened its first store in China. With a floor
space of 164 sqm, the store is designed based on the
concept of “Modern Natural” and will operate seven
days a week. The store is located at Thaiwoo Ski
Town at Chongli County, Zhangjiakou City, Hebei
Province – Chongli County is said to be the best
skiing destination in China and Thaiwoo Ski Town will
be the main stadium for skiing in the Winter Olympic
Games in 2022.
Currently, Bogner has 19 self-operated stores, 33
partner stores and more than 6,500 sales outlets in
more than 50 countries, and it has more than 100
partners in the Asia-Pacific region (China, Japan,
South Korea, Taiwan, Mongolia and Australia).
Bogner’s store at Thaiwoo Ski Town
Source: News, Companies’ websites; compiled by Fung Business Intelligence
29Foreign apparel brands entering China market
COMPETITIVE LANDSCAPE
– Japanese men’s shirt brand Kamakura shirts enters China via Tmall - MOVEMENT OF FOREIGN APPAREL BRANDS (ENTRY)
In January 2019, Kamakura shirts officially launched
its flagship store on Tmall, offering more than 600
SKUs, which include the brand’s signature products
200 count extra fine yarn shirts and 300 count extra
fine yarn shirts.
Founded in 1993, Kamakura shirts, together with
luxury brands Gucci, Balenciaga and Chanel, were
among the most popular search terms on Tmall in
2018. Furthermore, Kamakura shirts is also one of
the brands with the highest growth rate when it
comes to the keyword ranking within Tmall’s search
engine.
Source: News, Companies’ websites; compiled by Fung Business Intelligence Kamakura shirts’ online flagship store on Tmall 30Foreign apparel brands entering China market
COMPETITIVE LANDSCAPE
– American footwear brand Allbirds debuts in China - MOVEMENT OF FOREIGN APPAREL BRANDS (ENTRY)
American footwear brand Allbirds has entered the
China market by launching its first local store at HKRI
Taikoo Hui, Shanghai in April 2019 and its second
store at Taikoo Li in Beijing in May 2019.
Meanwhile, Allbirds has also launched its official
website (https://www.allbirds.cn/) and its online
Allbirds’ store at Taikoo LI, Beijing
flagship store on Tmall. Moving forward, the brand
plans to open specialty stores in Beijing and
Chengdu.
Founded in 2014, Allbirds is well-known for its two
signature products – machine-washable wool
sneakers Runner and Lounger, with each pair priced
at US$95.
Allbirds’ signature products – Wool Runner and Wool Lounger
“Peking Opera” – Limited
edition of Wool Runner to
Source: News, Companies’ websites; compiled by Fung Business Intelligence celebrate the opening 33
of its
Beijing store 31FOREIGN BRANDS ACCELELATING EXPANSION IN CHINA
Store openings – selected cases
32Store opening
COMPETITIVE LANDSCAPE
– Champion accelerates expansion in China in December 2018 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXPANSION)
American trendy fashion brand Champion is
accelerating its store expansion in China. The brand
added eight new stores in China in December 2018,
taking its total store count in the country to 41,
according to the brand’s official WeChat account.
The massive expansion was mainly driven by the
shrinking domestic demand in the U.S. and the huge
consumption potential in China.
Celebrity Yang Mi wearing Champion’s hoodie
Source: News, Companies’ websites; compiled by Fung Business Intelligence
33Store opening
COMPETITIVE LANDSCAPE
– Zadig & Voltaire accelerates pace of store openings in Greater China in March 2019 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXPANSION)
French apparel brand Zadig & Voltaire has expanded
its presence in Asia, especially Greater China. The
brand partnered with local retailer IT Group, the
brand’s distribution partner to open two new stores
in Beijing and Shanghai in March 2019.
Currently, Zadig & Voltaire has 378 stores worldwide,
118 of which are located in France. The Asia market,
mainly Japan and South Korea, now accounts for 5% Zadig & Voltaire’s first fashion show in China in 2017
of Zadig & Voltaire's total sales; the brand reportedly
operates three stores in Beijing, one in Shanghai and
another in Shenzhen. The brand targets to open 45
stores in the region, and generate between 10% and
15% of global revenue in the next five years.
Zadig & Voltaire’s “Chinese New Year Capsule Collection”
Source: News, Companies’ websites; compiled by Fung Business Intelligence
34FOREIGN BRANDS ACCELELATING EXPANSION IN CHINA
Launching flagship stores – selected cases
35Launching flagship store
COMPETITIVE LANDSCAPE
– Nike opens its first concept flagship store in Shanghai in October 2018 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXPANSION)
In October 2018, Nike unveiled its first House of
Innovation concept store “Shanghai 001”. Located at
the shopping district of Nanjing East Road in
Shanghai, this cross-category flagship store has four
levels and an area of 3,822 sqm.
Nike Shanghai 001 brings Nike products and services
to consumers through the integration of digital and
offline services as well as its experiential shop design. The digitall-enabled “Center Court” for workshops and trailing sessions
Other than being the first Nike store in China to fully
adopt mobile payments, the store has a number of
unique features to enhance customers’ experiences
such as “Center Court” for digitally-led trialing
sessions; while for its NikePlus members, “Nike By
You” sneaker customization and “Nike Expert Studio”
personalized product selection in private sessions
are available.
“Nike By You” sneaker customization
Source: News, Companies’ websites; compiled by Fung Business Intelligence
36Launching flagship store
COMPETITIVE LANDSCAPE
– COS opens first global menswear store in Beijing in December 2018 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXPANSION)
H&M’s sister brand COS launched its first global
menswear store in Beijing’s Sanlitun in December
2018. With a store size of 174 sqm, the store
features customized furniture for shoppers to relax
and provides various books on arts, photography, as
well as building and design.
Recently, COS has accelerated its expansion in the
China market by opening more physical stores and
launched its online flagship store on Tmall.
According to COS, it will further open physical stores
in Beijing, Xiamen and Guangzhou. COS entered the
China market in 2012 for the first time and has
around 30 stores nationwide.
COS’s website in Chinese
Source: News, Companies’ websites; compiled by Fung Business Intelligence
37Launching flagship store
COMPETITIVE LANDSCAPE
– Skechers opens the brand’s largest store in Shenyang in January 2019 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXPANSION)
In January 2019, Skechers opened its 3,000th store in
the world at Star Mall Shenyang Plaza, China, which
is also the brand’s largest store. In the 2,982- sqm
mega store, products are categorized and showcased
in different zones, including D’Lites, Lifestyle,
Performance, Kids, etc.
Founded in 1992, Skechers is reportedly available in
170 countries. Currently, Skechers has the largest
number of stores in China (941), followed by the U.S.
(472), and India (222).
Storefront of Skechers’ mega store in Shenyang
Source: News, Companies’ websites; compiled by Fung Business Intelligence
38Launching online flagship store
COMPETITIVE LANDSCAPE
– Mango launches online flagship store in China in June 2019 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXPANSION)
In June 2019, Spanish fast fashion brand Mango
signed a cooperation agreement with Hangzhou
Jingzhe Clothing Co., Ltd. to accelerate its
development in Asia, especially in the China market.
Under this cooperation agreement, the brand will
further develop both online and offline channels – it
plans to open 16 physical stores in China by the end
of 2019, and launch online stores via major e-
commerce platforms at the same time
Mango’s China website
Source: News, Companies’ websites; compiled by Fung Business Intelligence
39FOREIGN BRANDS EXITING CHINA MARKET
- Selected cases
40Exiting the market
COMPETITIVE LANDSCAPE
– Nine West withdraws from the China market in September 2018 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXIT)
In September 2018, U.S. footwear brand Nine West
closed its last Beijing store at Hanguang Department
Store after shutting down its online flagship store on
Tmall and dissolving its Dongguan headquarters
earlier. Indeed, the company enjoyed tremendous
Storefront of a NINE WEST store in China
growth ever since its entry in the China market in
1994; however, it was reportedly struggling from
increasing competition and continual declines in
revenue and profits in recent years.
Before exiting the China market, the company
withdrew from Taiwan and Hong Kong after filing for
bankruptcy in April 2018. After completing its
financial and operational restructuring, the footwear
brand exited from bankruptcy in March 2019, by
renaming itself as Premier Brands Group.
“Goodbye” message from NINE WEST
Source: News, Companies’ websites; compiled by Fung Business Intelligence
41Exiting the market
COMPETITIVE LANDSCAPE
– New Look exits the China market by end of 2018 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXIT)
In October 2018, British fast fashion brand New Look
decided to withdraw from the China market and
close all of its 120 stores in China by end-2018 to
focus on restructuring its business in its home
country. Industry experts revealed that lack of local
knowledge, increased competition from Chinese
brands and the sheer size of investment required are
the key reasons for New Look’s withdrawal.
New Look entered the market in 2014 and has
closed 20 stores in China since the beginning of 2018.
“Goodbye” message from NEW LOOK
Source: News, Companies’ websites; compiled by Fung Business Intelligence
42Exiting the market COMPETITIVE LANDSCAPE
– Forever 21 closes online store in China; confirms to exit the market in April 2019 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXIT)
In April 2019, U.S. fast fashion brand Forever 21
closed its online flagship stores on Tmall and JD.com.
Earlier in the same month, the fast fashion apparel
brand confirmed that it has decided to exit the China
market entirely in the near future although it has yet
to issue a formal statement.
Indeed, Forever 21 closed the stores in Tianjin,
Hangzhou, Beijing and Chongqing, etc. since the end
of 2018. Currently, Forever 21 has four remaining
stores in the nation.
Forever 21 entered the China market by opening the
first store in Changshu in 2008.
The announcement of closing its online flagship store on Tmall
Source: News, Companies’ websites; compiled by Fung Business Intelligence
43Exiting the market
COMPETITIVE LANDSCAPE
– 10 Corso Como closes Shanghai branch in June 2019 - MOVEMENT OF FOREIGN APPAREL BRANDS (EXIT)
Italian fashion concept store 10 Corso Como shut
down its Shanghai branch in June 2019, due to the
expiration of its lease and the end of its partnership
with its Chinese partner Trendy Group.
Following its entry into China in 2013, 10 Corso
Como opened two local stores respectively in
Shanghai and Beijing’s SKP shopping mall; yet, the
store in Beijing was closed in February 2017.
Founded in 1999, Trendy Group is a fashion
conglomerate which operates more than 3,000 retail
locations in nearly 300 cities worldwide, and holds
brands such as Ochirly, Five Plus, Coven Garden,
Trendiano and Miss Sixty.
10 Corso Como store in Shanghai
Source: News, Companies’ websites; compiled by Fung Business Intelligence
44Coming soon… UPCOMING ISSUES
Coming soon…
Please stay tuned for our upcoming issues featuring
the latest trends, e-commerce developments of
China's apparel market, apparel supply chain, and
more.
45Contacts
Asia Distribution & Retail Fung Business Intelligence
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888 Cheung Sha Wan Road,
Teresa Lam Kowloon, Hong Kong
Vice President Tel: (852) 2300 2470
Fax: (852) 2635 1598
Email: teresalam@fung1937.com
Email: fbicgroup@fung1937.com
http://www.fbicgroup.com/
Tracy Chan
Research Manager
Email: tracychansy@fung1937.com
Renne Chan
Research Manager © Copyright 2019 Fung Business Intelligence . All rights reserved.
Though the Fung Business Intelligence endeavours to have information presented in this document as accurate
Email: rennechan@fung1937.com and updated as possible, it accepts no responsibility for any error, omission or misrepresentation. Fung Business
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