Fashion-Hungry Chinese Market Expected to Triple by 2020

This may come as a surprise: Chinese consumers are often more willing to drop a huge chunk of money on fashion—especially Western brands—than consumers in the US and Europe. When H&M's much-anticipated store opened in Beijing in 2009, it attracted more than 600 fans who lined up outside the store in rain. The limited edition Matthew Williamson’s collection sold out within 10 minutes. With their wallets swelling over the past decade, China's fashion market is growing and it will continue to grow at a fast speed in the coming years, providing a good opportunity to foreign fashion companies entering this market, according the findings of a Boston Consulting Group report released last week. China's fashion industry is set to become the world’s second fashion market by 2020, and will account for about 30 percent of the global fashion market’s growth over the next five years, the report said. In the case of Swedish clothing retailer H&M, China ranked seventh out of 15 countries where it operates in per-store sales—ahead of the UK, US and some other European countries. H&M has 50 stores in China and it expects the country to be one of its largest expansion markets this year. The retailer entered China in 2009, but its brand was already well-recognized by Chinese fashionistas long before that. They learned about foreign fashion brands on international trips or from movies and television shows such as "Sex And The City" and "Gossip Girl" and fashion icons such as Victoria Beckham and Kate Moss. “About 40 million international trips are made by Chinese now and that number expected to reach 100 million by 2020,” said Lui. “Combined with Internet exposure, Chinese fashion consumers have pretty high awareness of brands.” In fact, many Chinese consumers prefer Western brands, which are usually known for their quality and designs, and are willing to pay a premium for the same product than the brands' homemarket price. As a result, when H&M's much-anticipated store opened in Beijing in 2009, it attracted more than 600 fans who lined up outside the store in rain. The limited edition Matthew Williamson’s collection sold out within 10 minutes. Like H&M, many other brands are more familiar to Chinese shoppers than the companies would previously assume, especially among consumers in high-tier cities such as Beijing and Shanghai and among the younger generation. That may be one reason why Chinese shoppers buy so much apparel online. Fashionistas are often willing to pay an extra fee to a broker who buys Western brands overseas and mails them to them because the brands they are seeking do not sell in China.