From 2015 to 2017, the three world regions with the largest apparel markets were the European Union, the United States, and China, in that order.
However, China has now overtaken the European Union and the United States as the world’s largest fashion retail market.
China accounted for 38% of the global fashion industry growth across all segments. Also, China has been responsible for an impressive 70 percent of the expansion in the luxury market since 2012 and there are no signs of this fashion freight train slowing down.
With China experiencing rapid growth rates—rates that are overtaking long-standing global fashion leaders—it begs the following questions.
What is China doing right, and what can U.S. retailers learn from China?
This article will present an overview of some of China’s most exciting fashion market innovations and will offer ideas on how U.S retailers can appeal to an ever-changing consumer market.
Work With Retailers to Be in Physical Spaces
It’s no secret that the eCommerce business is booming. In 2018 alone, 1.8 billion people purchased goods online.
However, just because consumers enjoy the convenience of online shopping doesn’t mean they don’t like the experience of shopping in physical stores. This is especially true of the fashion industry, and China’s thousands of shopping outlets are indicative of the power of owning a brick-and-mortar store.
Recent market research provides some fascinating insight that paints a complete picture of consumer demands:
- 85 percent of shoppers engage with both online and offline touchpoints, compared with 80 percent in 2017.
- Only a third of consumers think shopping online is more convenient than going to a physical store.
- 85 percent of consumers cited convenience as the main reason to shop locally, according to an international study by Facebook.
- In the fashion category, more than 70 percent of purchases are still made offline, and online channels account for just 13 percent of luxury brand sales.
- 88 percent of the online apparel consumers surveyed had shopped in physical stores in the past three months, according to McKinsey & Company.
When it comes to succeeding in the world of fashion—especially luxury fashion—brands must exist online and offline.
Keep Up With Young Consumers’ Desire for Cultural Experiences
If there is one thing China is doing right, it’s that they are continually innovating how they present their physical stores.
In other words, in China, shopping isn’t just about shopping anymore but about engaging in a full experience of artistic and cultural experience.
China has recently revolutionized several shopping malls into experiential art spaces (“art malls”). For example, a soon-to-open SKP South Hall (SKP-S) mall will include a four-flour section that shows off fresh installations from contemporary artists, according to an article by Business of Fashion.
These malls bring shoppers into a comfortable, hip, fun retail space where they can learn, discover new things, and purchase products. And consumers love them.
Stats show that these physical spaces for art and consumerism are capturing the attention of consumers. Back in 2014, online retail sales in China were growing so fast they started to eat into the sales of traditional physical stores. This caused several brands to close their stores.
However, this recent shift in creating cultural destinations with digital features is driving consumers back to physical stores.
It will be interesting to see what the future holds for China and its innovative new shopping malls.
As of now, Adrian Cheng’s K11 art malls are open in a few famous Chinese cities (Hong Kong, Shanghai, Wuhan, Shenyang, and Guangzhou) with a total of 29 new projects set to be completed by 2024.
It will also be interesting to see whether or not U.S. brands follow suit and bring shopping experiences back into physical spaces.