The Fashion Industry in China

The textile sector in China

China's huge population, along with its growing consumption of textiles and clothing, offers a lucrative business opportunity for the global market. Chinese customers place more and more emphasis on the quality and design of fashion garments; therefore, the market has experienced rapid growth during the last decades and it is expected to continue its growth in the coming years as well.

The provinces of Guangdong, Shanghai, Jiangsu, Zhejiang, and Shandong are the areas where most of the textile companies are located, these being the areas of the industrial cluster in China. The Asia-Pacific region, which accounts for about 45% of the global market, remains the strongest consumer of textiles. Furthermore, within the region, China is the largest textile manufacturer.

Specifically, while China is mainly known for its local fashion manufacturing, it only has a few large companies of its own that produce fashion garments. In total, China has about 44,000 companies in the manufacture of textiles, clothing, accessories, leather goods, and footwear. Among these, 21,000 companies focus on textile manufacturing, 15,000 companies focus on clothing and accessories, and 8,000 companies manufacture leather goods and footwear.

If you are interested in how a clothing factory works, have a look at the following video:

The number of fashion wholesale companies is 11,250, of which 2,700 are specialized in clothing. Another 5,000 companies are engaged in fashion retail, and just over half of these retailers are specialized in the sale of clothing.

In this context, local companies cannot cover the entire market, and buyers need foreign companies to sell their products in China as well.

China surpassed the United States as the world's largest fashion market in 2019, and the fashion industry in China has been flourishing and evolving for the past decade. In fact, revenue in the fashion segment is projected to reach $330,633 million in 2021. Furthermore, according to the National Bureau of Statistics of China, total retail sales of clothing, shoes, hats, and textiles rose nominally by 24.2% year on year to reach 795.5 billion yuan, almost 123 billion dollars. The following table summarizes the data for the country.

With a population of 1.4 billion people and an active population of more than 800 million, the textile market continues to expand at an exponential rate.

With more than 260 billion US dollars in exports, China is the undisputed champion of the world's textile and apparel exports. According to the China Chamber of Commerce for Import and Export of Textiles and Clothing, 44.8% of production goes to Asian countries, followed by Europe with 23.3% and North America with 16, 8%.

With more than 10 million people employed in the fashion industry, in 2012, China for the first time exceeded 40 billion garments produced in one year; and in June 2021, approximately 3.6 billion meters of clothing fabric were produced in China, with the monthly textile production volume consistently above three billion meters since 2019.

According to the China National Garment Association (CNGA), China's garment and manufacturing industry has gained an advantage in making garments of all kinds of categories quickly and efficiently, ensuring its first position in the world market in terms of capacity and quality. Admittedly, up until now, manufacturers' attention has been more focused on copying designs, but this is slowly changing with producers and national brands investing in original creations to cope with urbanization and growth. the purchasing power of the population, and the consequent rapid growth of high- and low-end clothing markets.

Due to the improvement of the living conditions of the middle class in China, Chinese consumers have become very conscious of the role of brands. In 2010, China's fashion market was a $17.7 billion market, with Louis Vuitton, Chanel, and Gucci being the most desired luxury brands.

However, in recent years, traditional fashion and luxury brands are losing popularity among Chinese consumers. Instead, so-called fast fashion brands have started to gain popularity. In 2014, luxury consumption in the mainland market by Chinese consumers fell 11% year on year to $ 25 billion. Furthermore, the government's anti-corruption campaign has created a more economic and rational climate among the people.

However, the fashion purchases made by Chinese consumers in the global market are still powerful. The Chinese bought 76% of luxury goods outside the country in places like duty-free stores. Aside from luxury goods, fast fashion companies such as Zara and Uniqlo have maintained good momentum and remain popular with China's young population.

In fact, of the top 20 global fashion companies, 18 have a presence in China, which includes all fast fashion and luxury brands, which indicates that foreign brands are well received and are highly appreciated by Chinese consumers.