Report On The Development Of China'S Clothing Consumption Market From 2020 To 2021

In 2020, China's clothing consumption market will be greatly impacted by the new crown pneumonia epidemic, and the retail sales of clothing goods above the quota will be less than that of the same period of last year, and the consumer price of clothing will be decreased. However, at the same time, the epidemic has accelerated the pace of business embracing the digital era, and emerging formats such as live e-commerce and contactless commerce have promoted the positive growth of online "wear" retail sales. With the normalization of China's epidemic prevention and control mechanism and the effective promotion of consumption policies, the consumption of residents has gradually returned to the development track of consumption upgrading, and the clothing market has shown a steady recovery and positive development trend.

First, the scale of the clothing market has declined due to the epidemic situation

The retail sales of clothing goods of the above quota units were lower than that of the same period of last year, and the clothing consumer prices fell. From January to October, the retail sales of clothing goods of units above the quota reached 664.21 billion yuan, down 11.2% compared with the same period of last year, with a decrease rate of 8 percentage points higher than the average retail sales of above quota units. At the same time, due to the increase of home time and the decrease of social occasions, the public correspondingly reduced the requirements of clothing grade, and the clothing consumer price decreased accordingly.

Chart 1: growth rate of retail sales of clothing commodities above the quota in the first 10 months of 2010-2020

Source: National Bureau of statistics

2. Clothing retail sales of key large-scale retail enterprises with general merchandise as the main business decreased significantly

The decline of sales in department stores was significantly higher than that in other retail formats. In the first three quarters of 2020, the retail sales of department stores among the retail units above the quota decreased by 16.6% year-on-year, 7.4% and 9.8% higher than that of professional stores and exclusive stores, respectively. It is the retail format most affected by the epidemic. From January to October, the retail sales of national key large-scale retail enterprises dominated by general merchandise decreased by 18.4%, which failed to continue the steady and good development momentum in 2019.

Chart 2: growth rate of retail formats above Designated Size in China in the first 10 months of 2017-2020

Source: National Bureau of statistics

Just need to promote the clothing prices of large retail enterprises. Due to the failure of shopping malls to carry out the Spring Festival promotion activities normally in 2020, clothing brands often adopt the way of online discount to deal with inventory goods. Therefore, during the period before and after the epidemic, most of the consumers who can still buy clothes in physical stores are due to the rigid consumption demand for new clothes. As a result, the average price of clothing consumption of large retail enterprises increased significantly compared with the previous year. In the first 10 months of 2020, the unit price of clothing transaction of national key large retail enterprises has increased by 17.5%, but the total retail volume of clothing has decreased by 37.3%.

Data source: China National Business Information Center

Clothing consumption to the head of the brand concentration. On the one hand, in recent years, in order to increase service formats, large-scale retail enterprises with department stores as the mainstay will appropriately simplify clothing brand stores. On the other hand, in the environment of greater uncertainty, the mainstream customers tend to be cautious and rational, more inclined to buy head clothing brands. Therefore, in the first 10 months of 2020, the market concentration of the top ten clothing brands has been generally improved.

3. The retail sales of online "wear" goods have achieved positive growth, but the sales growth rate has slowed down

In the first 10 months of 2020, with the cumulative decline of 5.9% in total retail sales of consumer goods, the retail sales of physical goods on the Internet will reach 7561.9 billion yuan, up 16% year on year, realizing a rapid growth against the trend. The high growth rate has greatly promoted the proportion of online consumption. The proportion of online physical goods retail sales in the consumer goods market has reached 24.2%, 3.5 percentage points higher than that in 2019. In the first 10 months of 2020, the online retail sales of "wear" goods increased by 5.6%, 9.8 percentage points slower than that in 2019.

Chart 4: growth of online retail sales of physical goods in the first 10 months of 2015-2020

Source: National Bureau of statistics

Fourth, compensatory consumption promotes the rapid recovery of the clothing market

Clothing retail sales of units above the quota have continuously achieved positive growth since August, and the growth rate has continued to accelerate. Clothing sales of large retail enterprises resumed positive growth in October.

Chart 5: growth rate of retail sales of clothing commodities above the quota from January 2019 to October 2020

Source: National Bureau of statistics

1. Online clothing consumption has entered a new development stage of scenario

China's e-commerce has entered a new development stage of "from plane to three-dimensional, from image to scene, from commodity sales to value creation"“ The rise of "housing economy" has promoted Taobao, shuoyin, Kuaishou and other live platforms to become hot channels in the new stage of e-commerce development.

2. The new tax-free policy promotes the rapid growth of luxury market

In 2020, a series of new tax-free policies in China have injected vigor and vitality into some silent markets. Benefiting from the return of overseas consumption and the new tax-free policy, China's luxury market is unique. Both the performance of luxury brands in mainland China, the sales of duty-free shops on the island, and the operation of high-end shopping malls in Beijing, Shanghai, Guangzhou and Hangzhou will achieve considerable growth in 2020.

3. The epidemic has spawned more demands for home sports and leisure

The new pneumonia epidemic in 2020 has changed the way of life of residents in the past. People began to think about how to make home life more rich, beautiful, healthy and comfortable. This change in consumer psychology has given birth to new market opportunities for sports casual wear, home wear and underwear.

Chart 6: retail sales growth of some clothing categories of Taobao + tmall in the first 10 months of 2019 and the first 10 months of 2020

Data source: magic mirror Market Intelligence

4. The market heat of sustainable fashion continues to rise

The epidemic has enhanced people's awareness of environmental protection, green has become a popular color in the world. Sustainable fashion is not only a business, but also a balance between consumerism and environmentalism. Clothing consumption presents the diversified development characteristics from possession to rent, from trend to retro, from pursuit of process design to return to nature and sustainability.

5. Brand clothing consumption gathered in central cities

In 2020, the consumption of brand clothing shows the characteristics of gathering to the central cities, and the gap between the growth rate of clothing consumption of key large retail enterprises in first tier cities and that in second tier and third tier cities will be significantly increased.

Chart 7: growth rate of clothing retail sales in sub line cities during the National Day golden week from 2017 to 2020

Data source: China National Business Information Center

1. The growth rate of clothing consumption will be significantly improved

Although the epidemic situation has not yet ended, China has formed a scientific and effective prevention and control mechanism, medical means have also made some progress, and the production and life of residents have basically returned to normal. People's expectations of future income growth are beginning to improve, and there will be more policies to promote consumption under the new dual cycle development pattern. These factors are conducive to the recovery of the clothing market to the level before the epidemic, and more likely to promote the sustained and rapid growth of sports clothing, home clothing and other clothing categories.

2. More new consumption patterns will emerge in the clothing market

The epidemic did not change the trend of market development, but further accelerated the pace of business reform. Consumers' acceptance of online retail channels has increased significantly compared with that before the epidemic. The digital transformation of physical retailers is in the ascendant, and new consumption innovations such as live delivery, online experience and sharing economy are in full swing. Driven by the innovation needs of the country, enterprises and consumers, more new consumption patterns will emerge in the clothing market.

3. Clothing market will pay more attention to aesthetic equality

The epidemic situation makes consumers pay more attention to inner beauty and inner peace, and people's demand for clothing shows a balance in many aspects. New fabric, new design and new technology make the equality of clothing aesthetic realized. More and more general size, versatile, natural and neutral clothing brands will emerge in the market, and gradually become a new fashion.

4. Clothing brand will show clearly defined values

Whether it is luxury brands, fast fashion brands or fashion brands, the clothing brands that can ride through the epidemic situation smoothly or even have the growth against the trend have a clear value orientation. In the highly uncertain market environment, clothing brands should show consumers brand values with clear positioning.

5. Clothing brand will highlight the symbolic meaning of lifestyle

The relationship between clothing brands and consumers will no longer be "looking down" or "looking up", but looking for the balance point of their own value from each other, so as to realize the symbiosis and co prosperity of business and individuals. This balance is lifestyle. There will be more clothing brands, through the exploration of scarce lifestyle, linked with specific consumer groups, and this symbolic meaning will be transmitted and branded in the minds of the public groups.

Author: China National Business Information Center ? ? Yin Xia