By Suwatchai Songwanich
CEO Bangkok Bank (China)
China is already the world’s fastest-growing consumer market, in part thanks to its expanding 1.4 billion population, and it accounts for more than 18 per cent of all fashion goods consumed globally. China also has set its sights on more ambitious goals than being the “factory to the world” and is moving into higher-value production by continuously upgrading its apparel manufacturing capabilities.
At the same time, Chinese consumers have changed significantly. Their tastes are more sophisticated. They want fewer cheap, mass-produced goods and are increasingly drawn to handcrafted products that display quality and individuality.
Furthermore, leading luxury brands have become increasingly dependent on Chinese customers. For instance, Ermenegildo Zegna, a famous Italian brand, now looks to China, not the US, as the place where it tests new products before deciding whether to roll them out globally.
Despite China becoming an important testing ground for luxury fashion brands, most Chinese people cannot afford such high-priced products. That is why popular sportswear brands such as Adidas and Nike are placing greater emphasis on their businesses based in China to meet the growing demand from fashion-conscious middle-class consumers. Meanwhile, the fast-growing market for inexpensive clothes is being serviced by local brands, such as Peacebird and La Chapelle, rather than those from the West.
People in Thailand are also becoming more sophisticated in their fashion tastes. The growing aspirational middle class has paved the way for an increase in demand for higher quality, more creative and unique apparel. Higher demand is seeing Thailand’s fashion revenue grow by about 10 per cent a year, with the market value forecast to reach $1.5 billion by 2023.
While it is unlikely we will see the likes of Louis Vuitton using Thailand to test their latest designs, the growth of China’s homegrown labels may soon inspire local fashionistas to pay more attention to what is coming out of Shanghai or Beijing than Paris or New York.
For more columns in this series please visit www.bangkokbank.com.