24 Sept 2015
Garment Shoppers in Chinese Cities: The 2015 Survey (Executive Summary)
Despite the uneven economic recoveries in progress and a gradual easing of belt-tightening in the US, the EU and Japan, many consumers in mature markets continue to shy away from non-essential spending. Yet, quite the opposite is happening in the emerging markets. Thanks to brisk economic growth and steady improvements in the people’s standard of living, consumers in emerging markets are increasingly demanding when it comes to the quality and style of clothes they buy. And their lifestyle is clearly reflected in the way they dress. This trend is particularly apparent in the Chinese mainland where the garment market is ever growing in size and consumer demand becoming more mature, offering attractive growth potential.
Quite a number of far-sighted Hong Kong garment companies first entered the mainland market many years ago. Through their efforts over the years, they have already taken a foothold, built up trustworthy brands and established sound reputation in the mainland. Today many of them are widely recognised and accepted by mainland consumers.
HKTDC Research conducted surveys on garment consumption in the Chinese mainland in 2001, 2002, 2008 and 2012 respectively. In a bid to understand the latest consumption pattern for garments and the advantages of Hong Kong brands on the mainland, a new round of survey was carried out in 13 mainland cities in 2015. The findings and recommendations of the survey report should be useful to Hong Kong companies interested in expanding into the mainland garment market.
The 13 cities covered in the survey conducted in the second quarter of 2015 are Nanjing, Shanghai, Hangzhou, Harbin, Shenyang, Beijing, Tianjin, Dalian, Wuhan, Chengdu, Chongqing, Guangzhou and Xi’an. A total of 3,383 consumers including the mature, the young and the students who had lived in the surveyed cities for at least two years and had purchased clothing items in the 12 months prior to the survey were interviewed.
Data Collection, Targets, Sample Size and Distribution
Face-to-face interviews by means of “central location interview” were employed, with popular shopping malls selected from each city for conducting the interviews. (See Appendix for interview locations.) All respondents must have resided in the surveyed cities for at least two years and have purchased garment items of any type in the 12 months prior to the survey.
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 specified in each city: females aged 18-35 (young females), females aged 36-60 (mature females), males aged 18-35 (young males), males aged 36-60 (mature males), and students. In other words, there were 50 respondents in each category.
In this survey, apart from the 4P (i.e. Product, Price, Place and Promotion) model, Branding was included as the fifth element on which respondents’ views were gauged. The findings can serve as useful reference for Hong Kong companies wishing to tap into the mainland garment market.
- The main reasons given by the respondents for buying clothes are practical needs and change of seasons. But there are also more than half who make purchases because of sales promotions involving discounts. The key factors affecting consumer purchase decisions are, first of all, quality, followed by reasonable price and trendy styles.
- Mainland respondents in general are most influenced by mainland fashion trends while the impact of fashion trends of other regions is not great. Among all the cities surveyed, Shanghai consumers are more influenced by the fashion trends of other regions.
- In the 12 months prior to the survey, the respondents spent an average of Rmb4,000 on garments. With the exception of Guangzhou, the spending in all cities is basically proportionate to the per capita income level of that city. The budget for buying clothes in the next 12 months is Rmb4,517. Consumers in all cities except Shenyang expect to spend more on garment in the future. In Shanghai in particular, the expected increase in spending is more than 35%.
- Mainland consumers have the habit of visiting clothing stores and almost 80% of them visit a clothing store at least once a month. The time of shopping is mainly during weekends and public holidays. Department store is the most popular shopping spot because it carries a large number of brands and wide variety of trendy, stylist items. Consumers are generally satisfied with the customer service of garment sales channels and clothing stores, giving them a rating of almost 4 out of a maximum of 5.
- Other than physical stores, more than 30% of the respondents prefer buying clothes online. Most respondents with experience in shopping for clothing online cite convenience / no need to leave home and cheaper prices than ordinary shops as the main reasons for shopping online. Of all respondents who have experience in buying clothes online, 35% say they browse the Internet at least once a week to shop for clothes. As for online shopping time, 65% of the respondents say they would do it on weekday evenings, followed by weekends and public holidays. Most of the respondents say that, in buying clothes, they would pay and buy directly after making online enquires. This way of shopping for clothes is most popular in Guangzhou and Shanghai.
- Sales promotions involving discounts and TV/radio commercials are the most effective publicity or promotion channels. Exception for Shenyang, Tianjin and Chengdu, sales promotions involving discounts are the most effective publicity or promotion channel for attracting garment consumers in the surveyed cities.
- Overall, mainland respondents find Hong Kong brands trend-setting / fashionable in style, tasteful, unique in character and excellent in materials / quality / workmanship. Less than 30% of the respondents say they are indifferent to Hong Kong brands. Almost 20% of the respondents are willing to buy more Hong Kong branded garments in future. They are willing to pay a premium of between 15% and 52% for Hong Kong brands over mainland brands which offer similar product quality. Among the cities surveyed, respondents in Nanjing are willing to pay the highest premium while those in Guangzhou the lowest.
- Most respondents are receptive to new brands and are willing to pay a premium for garments of Hong Kong brands. However, mainland brands are increasingly posing a serious challenge, and the premium that consumers are willing to pay for Hong Kong brands is dropping. Hong Kong companies clearly need to raise their competitiveness, define their precise market positioning and target customers. By so doing, they should be able 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.
- Product-wise, Hong Kong garment brands should target the mid-range market and foster a new consumer culture by offering Hong Kong styles, Hong Kong brands, Hong Kong designs and Hong Kong management that suit mainland fashion trends and consumer preferences.
- Where sales channel is concerned, department store is the most popular shopping spot thanks to the large number of brands it carries and the pleasant shopping environment. In exploring new sales channels, Hong Kong companies can consider setting up points of sale in department stores. The overall benefit may exceed that gained from establishing chain stores or independent shops on streets. In view of the sharp uptake of online shopping, Hong Kong companies should adopt channel-specific strategies such as stepping up promotion / marketing activities targeting online shoppers during the evening peak hours and providing more detailed product descriptions and more product photos for consumers to browse and buy.
- As far as promotion strategy is concerned, Hong Kong companies can attract customers and raise awareness by participating in sales promotions involving discounts organised by shopping malls. This, coupled with TV/radio commercials, will help boost brand penetration and maximise the promotional effect.
- As consumers are attaching more and more importance to quality and service, Hong Kong companies should strengthen, or ask their mainland retail outlets to strengthen, the sale and after-sale service for their garment products in addition to maintaining competitively high price-performance ratios. The current survey finds that improving sales attendant attitude and offering free alteration service should help towards raising customer satisfaction on garment sales channels and on customer service.
Consumer habits vary from city to city and among different consumer groups. Hong Kong companies should tailor their products and develop their marketing strategies based on different consumer needs.
Appendix: Interview Locations
Eastern Chinese cities
Northern Chinese cities Harbin Shenyang Beijing Tianjin Dalian Central, western and southern Chinese cities Wuhan Chengdu Chongqing Guangzhou