Fashion

GLOBAL INVESTOR 1.16 — 34
FASHION IN CHINA
EVOLVING
INDUSTRY–
A WORK IN
PROGRESS
While China’s manufacturing sector has flourished, finding the same degree
of success in the retail sector has proven elusive – particularly in the domestic
fashion industry. Consumers prefer foreign brands, supply and distribution
can be problematic, the market is fragmented and competition, as always, is fierce.
As the development of China’s retail market started quite
late compared to its upstream manufacturing sector,
the products from the manufacturing sector have been
more sophisticated than their retail counterparts. The
country’s garment manufacturing sector has not only been supplying
China, but also the rest of the world since the seventies – products
are not only tailored to the mass-end, but also to the high-end markets,
in the form of both OEM (original equipment manufacturer), ODM
(original design manufacturer) and branded products. For the example
of jeans, see p. 12 With more than 10,000 suppliers in China manufacturing
for Wal-Mart, the majority of Wal-Mart’s merchandise has
been made in China, including garments. Other mass-end brands like
Gap, Levi’s, H&M or Uniqlo have all had their share of fashion made
in China. High-end brands like Armani, Bally, Dolce & Gabbana, Marc
Jacobs and Prada have also had their fair share of fashion made in
China in recent years. Branded fashion like Ports 1961, which is
designed and made in China, has even made its way to the fashion
weeks in New York City, Paris and Milan. Despite the recognized
craftsmanship and manufacturing skills, there still seems to be a lack
of nationwide domestic fashion brands at the retail end in China,
especially for the high-end market, where mostly foreign brands are
dominating.
Branded fashion chain retailing in China in the nineties competed
mostly on basic ready-to-wear items, when pricing and product materials
were emphasized more than style and colors. Riding on the
developed manufacturing base and in order to compete on price,
brands like Giordano and Bossini introduced just-in-time product
delivery to points of sale where inventory was kept to a minimal level