Chinese Garment Enterprises Need To Seize Market Opportunities Through Creative Branding.

Recently, people's Daily Overseas Edition disclosed a group of data on clothing consumption, and raised the question of "consumers do not like to buy clothes," which has attracted wide attention.

Clothing consumption data shows a little known phenomenon. Generally speaking, on the macro level, the market is concerned about the total sales volume, for example, in 2018, the per capita clothing consumption expenditure of the whole country was 1289 yuan, an increase of 4.1% over the same period, and the growth rate was 1.2 percentage points faster than that of the same period last year.

However, another group of data shows that sales volume of clothing and cloth has dropped to varying degrees from the fourth quarter of 2017. Clothing sales in 2018 were 54 billion 60 million, down 24.8% from 71 billion 910 million in 2017.

That is to say, the sales of Chinese clothing decreased by 17 billion 850 million in 2018. This is a huge number, which is equivalent to an average of less than 10 clothes per person. It looks like "wrong statistics". However, another set of data was also confirmed: in 2018, the volume of retail sales of clothing in major national retail enterprises decreased by 4.2%, and the growth rate slowed down by 8.4 percentage points compared with 2017. In addition to the increase in the number of sportswear retail sales, the retail sales of other categories of clothing were less than that of the same period last year.

This means that the rise in clothing prices has supported the growth of total consumption, but in fact people are drastically reducing clothing consumption. The data of the National Bureau of statistics also confirmed this point. In 2018, the proportion of the per capita clothing expenditure of the whole country in consumption expenditure was 6.5%, down 0.3 percentage points from the previous year.

What causes such a phenomenon? One of the reasons may be that the rise of clothing prices and the reduction of people's consumption ability double the factors, so that people can reduce clothing consumption expenditure. The only explanation for the sharp reduction in consumption and the total growth in consumption is the sharp rise in prices. Data show that in 2018, the national unit price of major large retail enterprises rose by 5.3%, up 4.1 percentage points from 2017. The reason for the price increase is that the clothing industry is a labor-intensive industry, which is very sensitive to the cost of labor. If the cost of labor and raw materials continues to rise, the whole industry will be forced to raise prices.

On the other hand, the growth of people's consumption capacity is also slowing down, because the debt of the residential sector has increased rapidly in the past few years. According to UBS estimates, by the end of 2018, the proportion of residential sector debt to GDP rose to 53%, and the proportion of residents' disposable income rose to about 95%.

The clothing industry has price elasticity of demand, unlike other commodities that are rigid in demand, and prices must be bought. Demand for clothing is elastic, and price cuts will lead to a substantial increase in sales, and vice versa. This is also the reason why the clothing industry often offers anti season sales, and even the business mode of the outlets. Therefore, the rise in clothing prices will reduce consumption and add to the slowdown in the growth of consumption capacity.

Another reason may be the diversity of consumer demand and insufficient supply capacity. Now the clothing consumption has shifted from the vogue to the fashion, culture, brand, personalization and other consumer trends. Chinese clothing enterprises have insufficient innovative supply capability. If we concentrate on the "small and sophisticated" production mode, the cost will be very high. Foreign enterprises will be sold in the global market, and there will be economies of scale besides fashion. The lack of brand in Chinese enterprises also lacks the advantages of mass production and can not realize the scale of fashion. Therefore, consumers may reduce the number of ordinary clothes to buy, and increase the price of a high price brand to make it satisfactory.

The number of clothing consumption in China may be stimulated to irrational growth because of the promotion of electricity providers in previous years, because online shopping is cheap and easy to make decisions, many people buy too many clothes. According to market research, the scale of China's clothing e-commerce market in 2018 amounted to about 820 billion 500 million yuan. The proportion of apparel online retail sales to total retail sales rose from 7.3% in 2013 to 31.8% in 2018. Perhaps because of the slowdown in income growth, the rising household debt rate and the uncertainty brought by the downward pressure on the economy, the "chopped hands" of online consumption are starting to consume rationally, which may be one of the reasons.

According to the data of clothing consumption, the clothing industry with demand price elasticity is the main reason for the decrease in consumption because of the rise in prices. It should be said that labor, land rent and raw material costs have a rigid growth phenomenon, which is also the reason why more and more fast fashion international brands are being manufactured by foreign countries. The globalization of clothing production has brought challenges to Chinese enterprises.

China's high-end clothing market is almost occupied by clothing brands from France, Germany, Italy, Japan, the United States, Britain, Korea and other countries. The brands of China Hongkong and Taiwan are mainly concentrated in the middle end market, and domestic brands are mainly concentrated in the low and middle end market. If cheap and fast fashion brands from abroad are imported from lower cost countries, they will further suppress local brands.

Chinese enterprises should build brands to reduce costs and occupy the market through scale, chain and globalization. Data show that China's per capita total clothing consumption is respectively 1/4.3 in the US and 1/2.5 in Japan. The clothing industry has the space for increasing the overall cake and concentrating degree of the industry, but it needs Chinese enterprises to seize the opportunity through creative branding. Only in this way can they win the home court advantage in the clothing processing power and consuming power of the 1 billion 400 million population.