The Chinese clothing market is estimated to have hit a market value of approximately CNY 857.2 billion by the end of 2012, and is anticipated to increase at a compound annual growth rate (CAGR) of 7% through to 2016.
China's clothing industry is set to become the world's second fashion market by 2020, and will account for approximately 30% of the global fashion market's growth over the next five years.
Growth within the industry is being driven by a number of key factors, including an increase in competition from foreign companies, and the expansion of key Chinese clothing players.
China's clothing market is going through a very exciting phase, offering immense opportunities for players involved in the business. The market, which on one hand, is struggling due to increasing labour costs and declining overseas demand is growing at an astoundingly high growth rate on the back of increasing domestic market.
On the whole, the high-end Chinese clothing market is dominated by brands of European origin and other imported products, such as Giorgio Armani, Cerruti 1881, Hugo Boss, Dunhill, Chanel, Dior, Ermenegildo Zegna and Salvatore Ferragamo.
The middle and low end of the market has a product mix of foreign and domestic brands, with most of the goods being manufactured in China.
To be specific, brands such as Nike, Adidas, Tommy Hilfiger, Zara and H&M are sourced from developing countries and LDCs. For example, in Zara's stores in Shanghai, over 90% of stock-keeping units (SKUs) are imported.
However, there is a caution for retailers contemplating entering the burgeoning market -- average spending by urban Chinese consumers aged 14 to 45 years old at this point is less than a quarter of the same group in the US and UK, mostly due to overall lower incomes in China.
For more information on the Chinese clothing market, see the latest research: Chinese Clothing Market
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