China'S Luxury Market Has Suffered Setbacks. Luxury Underwear Is A Big Business.

China

Market growth is frustrated, but luxury high-end.

The market is an exception, but international.

Competition with local competitors in the high-end underwear market is also increasingly fierce.

The secret of American underwear brand Vitoria will open its first underwear flagship store in China, including Italy brand LaPerla and Germany Triumph Ttiumph, which are also increasing the number of stores and expanding the market share in major cities of China. According to the data of Mintel group, the value of underwear market in China's first tier cities will double in the next five years to 18 billion US dollars.

The Chinese government's persistent opposition to extravagant behavior seems to shift people's interest in luxury bags and accessories to sportswear and more underwear categories. LaPerla mainly sells sling corsets at a price of more than 2000 dollars. At the end of last year, men's clothing lines were sold, mainly selling 200 dollars of silk underwear and 3000 dollars of silk clothing. LaPerla Asia CEOChiaraScaglia said: "luxury goods are not bought to show off, but are used to enhance consumers' good personal feelings."

However, according to the Wall Street journal in early 2015, because of China's anti-corruption and high-end underwear market benefits, hundreds of dollars of expensive underwear in lingerie stores across China are selling well.

According to Euromonitor, the retail value of Chinese women's underwear market is expected to reach US $25 billion next year, two times that of the US market and will grow to 33 billion US dollars in 2020.

According to data released by RTGConsulting co-founder AngelitoTan, luxury underwear last year accounted for 1/3 of the total underwear business's $20 billion turnover in the Chinese market.

British high-end underwear brand AgentProvocateur Beijing business turnover increased by 30%, while LaPerla Asian region turnover increased by 40%, to a large extent, is the contribution of Chinese consumers.

Domestic underwear brands such as Beijing love, Manifen and Ordifen also take this market potential into consideration, constantly improving their product quality and targeting high-end customers.

"This means that overseas brands have to compete with local brands, not only in terms of quality but also in innovation," said MatthewCrabbe, director of Mintel.

AgentProvocateur said that it is very popular for Chinese women to wear a coats outside their sexy underwear. Chinese consumers prefer elegant and Lace Sexy products. In the next few years, brand stores will break through 20.

At present, the domestic high-end underwear market is more dispersed, and no brand occupies the dominant position in the market.

Under the gloomy global market outlook, the overseas underwear brand believes that the Chinese market is the key to enhancing the overall turnover.

AgentProvocateur has at least 7 stores in mainland China, and LaPerla has 15 stores in China. It opened a Menswear store in Beijing at the end of last year, and plans to open more stores in Chengdu and Chongqing this year.

ChiaraScaglia told Reuters: "at the beginning, many people questioned why they spent thousands of dollars on underwear that no one could see, but now the lingerie industry has changed."

This year, the secret of the American underwear brand Vitoria will set up the first underwear flagship store in Shanghai, which is located in the golden section of the downtown area and used to be the store of Louis Weedon, a luxury brand.

LBrands, a secret parent company in Vitoria, said that the brand will announce its arrival in the Chinese market in a very special way. This is the beginning of Vitoria's secret business.

There are people in the industry who say that the secret of Vitoria has never sold underwear products in Chinese stores. But the amount of purchase that Chinese consumers buy annually through sea purchase may be amazing. After all, the purchasing power of the huge audience produced by Vitoria's secret show every year can not be underestimated either.

In May of this year, LBrands announced the recall of the secret of Vitoria's operation in China, and RBCCapitalMarkets analyst BrianTunick expressed optimism about the expansion of Vitoria's secret business in China.

Triumph, which has 1000 stores in China, plans to open stores in five new cities this year, and will open 11 stores next year.

The urban beauty, a public company who focuses on the mass market, sells its underwear from 50 yuan RMB last year, and acquired Ordifen brand last year to expand its position in the high-end market.

PeterLam, assistant to chief financial officer of urban beauty, stressed: "urban beauty should enter the high-end market step by step."

Western style high-end underwear has begun to approach Chinese consumers in recent years. Matthew Clubb, director of Asia Pacific Research, said that the Chinese view of beauty, lifestyle and even sex is changing. This has increased the sales of high-end underwear. Some women are thinking more about wearing sexy clothes, including their underwear.

Gao Qiannan, a 22 year old Shandong student, revealed that she would spend more than 1500 yuan on underwear every year, but she did not think there was a big difference between Chinese and foreign brands.

"I can accept the purchase of a domestic brand, but if I particularly like the style of an overseas brand, I may choose to buy overseas brands," she said.

Although LaPerla noted that certain colors such as red and pink sold far better in Asia than Europe or the United States, the brand revealed that it would not provide special products for the Chinese market. However, in order to expand the local market vigorously, LaPerla chose China's supermodel Liu Wen in its advertising blockbuster.

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What's more, Japanese and Korean brands are becoming more and more popular in China.

Yin Huijuan, 23, spends 800 yuan ($120) on underwear every three months. She reveals that she likes to buy Japanese brands such as Wacoal and Narue.

"The style of Japanese brands pays more attention to detail and diversity. These are all domestic brands' weaknesses," she said.

Although the underwear market has a bright future, it is not smooth sailing.

City beauty has 8600 stores in China, including 550 stores in Ordifen. Last year, the performance of the brand mass market grew strongly, but by the first half of June 30, 2016, its revenue was 2 billion 211 million yuan, up by only 0.2% over the same period last year. Net profit was 174 million yuan, down 35.63% compared to the same period last year, which was mainly affected by the slowdown of China's economy and the more cautious influence of consumers. At the same time, online sales competition was fierce.

The Hongkong based group is the holder of an underwear brand. The company said that retail sales fell by nearly 20% between April and June, mainly due to fierce competition and economic slowdown.

Hongkong analyst EugeneMak revealed that despite the existence of these problems, the underwear industry is still very attractive. He predicted that the market will be stable for some time, but he pointed out: "this is a young market, and competition is fierce in the short term".

Earlier, IreneLu, an underwear designer, was quoted as saying that China has introduced sexy underwear since the 20s of last century, and Western style bra spreads in China.

Now China has become the largest base of underwear manufacturing in the world, but until recently, luxury underwear has begun to attract Chinese consumers.

Compared with the growth of China's luxury market, the growth momentum of the luxury underwear market has just begun.