According to a report by McKinsey & Company and media outlet The Business of Fashion, the United States will no longer be the largest fashion market in 2019. China is expected to overtake the US with its 1.4 billion population who has been steadily increasing its control on the fashion industry.
This can prove to be a signal in the rebalancing of economic power in the world as industries are shifting alongside it.
The Chinese have created new consumer groups with buying power to spend on all things fashion, sports and entertainment included.
News website Quartz recently released an article stating that many luxury brands around the globe are already heavily dependent on Chinese customers who have a preference for luxury goods and with the capacity to purchase them. This applies to shopping sprees made abroad and in their home country.
With the steadily increasing number of young shoppers and government policies encouraging shopping within China, the consumer trends and activities are now moving back to the country’s borders.
This occurrence will play a crucial role in redirecting the path of the fashion industry.
For example, Italian brand Ermenegildo Zegna has switched its test market from the US to China in order to decide which products are fit to be sold internationally.
Aside from luxury brands and the market who can meet their supplies, there is still a big percentage who cannot afford the steep price tags. Therefore, brands such as Adidas and Nike are focusing on their businesses based in China to meet the growing demand of the middle class who has the time and money that can keep the fast fashion industry alive.
Lastly, there is the booming market for inexpensive clothes (paywall). The demand from this market is not catered by Western brands but by local ones such as Peacebird and La Chapelle. Chinese students who study fashion abroad do not remain in New York or London but come back to their country to start their own lines. From there, they will expand internationally.
McKinsey’s fashion representative, Achim Berg said in a conference held in the UK, “We also see that there are local brands now coming up and becoming relevant. I think this desire to only buy international brands in the mid-market is also waning a bit.”
This change in preference from international to homegrown origins is reshaping the fashion industry as a whole.
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