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China’s Garment Shoppers: Branding and the Hong Kong Advantage

According to the latest study commissioned by HKTDC Research, Garment Shoppers in Chinese Cities: The 2015 Survey [1], mainland consumers generally find Hong Kong clothing brands trendsetting, fashionable in style and tasteful. They are willing to pay an average premium of 36% to buy Hong Kong branded garments over mainland brands which offer similar product quality. However, mainland brands are increasingly posing a serious challenge, and the premium that consumers are willing to pay for Hong Kong brands is dropping.

Wide Recognition of Hong Kong Brands

In order to understand the reasons why Hong Kong clothing brands win the hearts of mainland consumers, respondents were asked their overall perception of Hong Kong clothing brands. Results show that close to 50% of the respondents find Hong Kong clothing brands trendsetting / fashionable in style / tasteful, followed by unique in character (38%) and excellent in materials / quality / workmanship (35%). Only less than 30% of the respondents are indifferent to Hong Kong brands, with the highest ratios coming from Nanjing, Shenyang and Beijing.

Chart: Perception of Hong Kong clothing brands
Chart: Perception of Hong Kong clothing brands

download excel

 

Table: Perception of Hong Kong clothing brands (by city)
Table: Perception of Hong Kong clothing brands (by city)

 

Half of the respondents indicated that their tendency for buying clothes of Hong Kong brands would remain unchanged, while 30% of the respondents said that they were not sure if they would buy Hong Kong branded clothing in future. The views of respondents in all regions are similar, except for Shanghai where a particularly high ratio of 40% of the respondents said they would likely buy more Hong Kong branded clothing. On average, only 2% of the respondents said that they would buy less clothes of Hong Kong brands.

Table: Likelihood of buying Hong Kong branded clothing in future
Table: Likelihood of buying Hong Kong branded clothing in future

 

Comparison of Mainland, Hong Kong and International Brands

Mainland respondents in general favour mainland brands. In the 12 months prior to the survey, more than 70% of the respondents have purchased clothing items of mainland brands, while only 15% have bought items of international brands, and less than 10% have bought Hong Kong brands, representing a drop of 3% as compared with the findings of 2012. In Hangzhou, the proportion of respondents buying mainland branded clothing is the highest (90%), whereas in Guangzhou, the proportion of respondents going for Hong Kong brands is the highest (17%). The highest proportion of respondents buying products of international brands also comes from Guangzhou (29%).

Table: Average shares of mainland, Hong Kong and international brands in clothing expenditure
Table: Average shares of mainland, Hong Kong and international brands in clothing expenditure

download excel

 

Table: Shares of mainland, Hong Kong and international brands in clothing expenditure
Table: Shares of mainland, Hong Kong and international brands in clothing expenditure

 

Hong Kong Brands Have the Edge in Mid-range Market

Respondents were asked to indicate their choices of brands in buying clothing of different grades, with 3 indicating the first choice, 2 indicating the second choice and 1 indicating the third choice. Results show that when buying low-end and mid-range clothes, respondents mostly regard mainland brands as their first choice. When buying high-end clothes, international brands are their first choice. As compared with the findings of 2012, the scores of Hong Kong brands have slid somewhat across all grades.

Chart: Brand preference (by grade)
Chart: Brand preference (by grade)

download excel

Hong Kong Brands Command 36% Price Premium

Survey findings also show that mainland consumers are willing to pay a premium for clothing of both Hong Kong and international brands. For example, if a clothing item of a high-end mainland brand is priced at Rmb1,000, mainland consumers are willing to pay up to Rmb1,360 for a like item that carries a Hong Kong brand. The price for a similar item bearing an international brand can fetch an even higher price of up to Rmb1,881. In other words, the price premiums of Hong Kong and international brands over mainland brands are 36% and 88.1% respectively. The price premium of Hong Kong brands over mainland brands is highest in Nanjing (52%), and lowest in Guangzhou (15%).

Table: Price premiums of Hong Kong and international brands
Table: Price premiums of Hong Kong and international brands

Mainland brands are increasingly posing a serious challenge, and the price that mainland consumers are willing to pay for Hong Kong brands has decreased from Rmb1,581 in 2012 to Rmb1,360 in 2015. Hong Kong companies clearly need to raise their competitiveness, define their precise market positioning and target customers in order to build their brands and raise their profile. Further, Hong Kong companies should strive to enhance market receptiveness and establish their reputation through good quality.


[1] Following the 2012 study, HKTDC Research again conducted a survey on garment shoppers in 13 mainland cities in 2015. The cities covered in the latest survey are Nanjing, Shanghai, Hangzhou, Harbin, Shenyang, Beijing, Tianjin, Dalian, Wuhan, Chengdu, Chongqing, Guangzhou and Xi’an. The survey was carried out in the second quarter of 2015. The sample size was 3,383, or 260 consumers in each city. Five groups of respondents were interviewed in each city: females aged 18-35, females aged 36-60, males aged 18-35, males aged 36-60 and students. In other words, there were 50 respondents in each category.

Content provided by Picture: Louis Chan
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