More growth for clothing stores in China

The clothing store industry in China will see more growth, predicts IBISWorld.

IBISWorld predicts the industry will generate a revenue of $20.84 billion in 2013. Over the past five years, revenue has been growing at an annualised rate of 13.4 per cent.

Industry growth was strong in the past decade due to the opening of the market in accordance with China’s World Trade Organisation commitments. After 2001, foreign capital streamed in, bringing with it experienced management and systems. And as the Chinese economy developed, living standards improved and demand for fashion products grew.

Competition is increasing in the industry, due to the entry of more foreign players and a large increase in the number of domestic firms. As a result, industry concentration within the clothing store industry in 2013 is low, with the top four firms accounting for an estimated 16.2 per cent of industry revenue, says IBISWorld.

The industry’s major players like Metersbonwe, Bestseller, Esprit, and Jeanswest are focusing on branded franchising, which will quickly expand sales coverage and market share.

IBISWorld anticipates that smaller retailers will lose customers or join franchised chains to stay in the clothing store industry.

External competition will also come from online clothing retailers, such as VANCL, which have lower intermediate costs are able to offer lower final prices.

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