Intensified Chinese brand building in clothing

Intensified Chinese brand building in clothing

According to a recently published survey by HKTDC Hong Kong Trade Development Corp. on the drive behind the Chinese mainland clothing industry, many companies have already started or even completed their transformation efforts by strengthening their technology and quality management, higher product value and enhanced branding

The survey with the title “China’s industry upgrade and opportunities for Hong Kong expertise” was conducted in November 2011 and proves that these clothing manufacturers are moving to value added goods through R&D, design, marketing, upgrading technology and product quality. Following was also a telephone round among some 2000 brand owners garment manufacturers during December 2011 up to March 2012.

Some companies created a new distribution system, others entered the retail market, building up cross-provincial or even nationwide retail networks and by developing their own brands. This means that they are following the directives of the Chinese government in order to compensate for the lesser exports and expected demand due to the still ongoing debt financial and debt crisis.

A vast majority (89 %) is developing a national brand and mostly in the medium-end (90%) because the upper price levels are dominated by foreign branded imports. 85 % of the respondents develop their markets through own operated stores or specialty counters and only 37 % rely on distributors. Already 56 % are selling their products online and 64 % of the enterprises are operating a franchise business.

Table 1 shows more details

1340245154143_eChart1_369412 Results of Survey conducted by HKTDC among Chinese garment manufadturers 2012

Garment companies in China grow also in scale and 34 % of the surveyed firms have annual sales in the order of USD 10 million.

In order to support the brand development, garment producers devote more time and labour into R&D, design and marketing to achieve higher added value with their products. Gradually they are outsourcing also their production to other manufacturers, the quota of the surveyed companies is at 38 % and further nine percent are considering this option.

As we all know, within five years up to 2010 the average growth rate for Chinese garment exports was 12.9 % but production of garments, shoes and hats grew at an annual rate of 21.4 % proving that they were at the same time selling their own brands on the domestic market.

Table 2 presents the details to the outsourcing position of Chinese garment producers

1340245267479_eChart2_369412

Especially among young Chinese brand awareness is high, especially in the areas of garments, jewellery and watches. Branding means also an appropriate positioning of the product, distinctive product design and to create a brand image, but also packaging, store ambiance and advertising are decisive and have to be in line with the preferences of the targeted consumer groups.

The Chinese garment industry’s service outsourcing degrees can be had from Table 3

1340245365449_eChart3_369412

www.hktdc.com


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