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Gucci’s entry will encounter an increasingly sophisticated Chinese market in children’s wear. Hundreds of Chinese local brands such as Paclantic, Li-Ning, MetersBonwe and Balabala already have a slice of the market. Moreover, international fashion brands Zara, H&M and Gap have opened stores in many major Chinese cities, and dozens of other US and European retailers are planning to move in.
There are more than 1,000 brands in the Chinese children’s clothes market, according to a recent report on the industry conducted by China Research and Intelligence Co Ltd.
“The children’s wear market in China is still facing a brand vacuum and lacks dominant brands,” said Tian Tao, vice-president of CTR Market Research Co Ltd. “But at the same time, the crowded market is full of opportunities.”
At present, the Chinese market has two lines of children’s apparel: sports wear and casual. Sports apparel brands include adidas Kids, ANTA Kids and Li-Ning Kids. Casual brands are Paclantic, Les Enphants and Disney.
Statistics showed that a new Chinese baby boom has been taking place since 2005 and will last for 10 to 15 years. Meanwhile, since 2000, Chinese baby-related industries have maintained an annual growth as high as 30 percent. Experts predict that the Chinese children’s clothes sector will experience robust growth in the next decade.
“In recent years, the sales volume of various kinds of children’s clothes in Chinese urban and rural areas has shown an increase with at least an annual growth of 10 percent,” said the research report.
Chen Dapeng, executive vice-president of the China National Garment Association, said earlier that annual sales revenue from clothes for youngsters in China may have totaled 100 billion yuan ($15.54 billion) in recent years.
According to China Garment Website, the market value of Chinese children’s products, including apparel and toys, exceeded 200 billion yuan in 2010. It estimates the Chinese children’s clothes industry will exceed 150 billion yuan in value by 2015.
“The international brands want to expand their lines of children’s wear because they see an increasing demand in the baby industry,” said Nie Xiaomei, a researcher at Tsinghua University. “They also want to see their brands become more competitive because one-stop consumer spending will inevitably become the main trend in the future.”
Nie said that more and more labels want to not only expand their production but also to enter the fields of customer service and sales. Meanwhile, an increasing number of consumers want to buy everything in one store to save time and energy. As a result, many brands fear losing customers or even losing the whole market if they do not add more choice in their lines.
In recent years, with the gradual increase of Chinese per capita income and consequent increase in purchasing power, not only has there been a boom in demand in the domestic clothing market, but there has also been a rise in demand for comfortable, better quality and fashionable children’s clothes.
“The children’s clothing industry is in a state of war, with both domestic brands and international brands fighting in order to have a bigger slice of the pie in the high-margin industry,” said Zhong Xiaoqiu, board chairman of the domestic Uyoung Media.
Tian added: “Currently, consumer brand awareness is generally low in the children’s clothing business, and children’s clothing brand-building is still in its infancy. So, although the battle is fierce, maybe it’s the best time to compete and build the brand.”
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