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How to Find a Niche Market for Your Fashion Brand in China?

Last modified: September 17, 2020

China will become the first world fashion market in 2019, surpassing the US, despite a lower growth in the sector, which will fall from the current 4.5 to 3.5%. the “The State of Fashion” report by McKinsey and The Business of Fashion, which indicate, among the causes, the risks due to trade policies, such as the US-China trade war, the slowdown in global economic growth, which also affects the main Asian markets, and the uncertainty linked to events such as Brexit.

Overall, the sector produces global profits of $ 25.8 billion, of which 97% is the prerogative of 20 giants, including Nike, LVMH, and Inditex, which in 2010 stood at 70% of total added value. In 2019 the lowest segment (value) of the sector grew between 5 and 6%, while for luxury the expected growth is between 4.5% and 5.5%.

What do Chinese fashion consumers want?

Chinese consumers buy more than two-thirds of their luxury goods abroad, with negative repercussions for companies operating in the domestic market.

What strategies should, therefore, be adopted by fashion brands to keep up with the new trends and not lose competitiveness in the Chinese market? Undoubtedly it is necessary to focus more on women’s fashion, expand the spaces dedicated to women’s collections, and the range of products of the collections themselves, evaluating their relative profitability.

KOL China

Some brands have adopted a product diversification strategy to keep consumers’ interest in the brand alive. In fact, in addition to the increase in demand for women’s ready-to-wear, the products that recorded the greatest growth last year are perfumes and cosmetics.

Today, Chinese consumers are looking for more innovation, product customization, high product value. Preferences are shifting from products with over-exposure of the logo to products of the highest quality. From this point of view, luxury and fashion brands will have to be able to transmit their value proposition to consumers in the local market.

What do fashion companies need to do?

Companies will have to operate with “greater transparency”, relying on the authenticity and originality of products beyond the attachment to traditional brands, in a context in which the small emerging brands are more and more.

Finally, the advancement of digital and e-commerce will make it necessary to proceed with acquisitions, investments, and research and development activities to diversify the sources of profit, aiming at the same time as an ‘agile’ production model and without stocks (‘just in time’). This will also entail a strong growth in investments in other countries between now and 2025.

Identify your own fashion niche market

The market, in itself, can be very large or very small: in both cases, it must generate a business that allows you to support your business. Currently, especially on the web, the market is not only big: it is an infinite expanse of offers of services or products. For this reason, it is necessary to find the niche market to which to turn and in whose heart to breach.

Louis Vuitton staff arrange the store’s window display in the International Finance Center shopping mall, Luziajui, Pudong business district, Shanghai, China, on August 19, 2010. Photo by Lucas Schifres/Pictobank

By niche, we mean a small market space but made up of people with specific needs. It might, at first, seem uneconomical but, on the contrary, being able to meet the needs of a market segment is very convenient: needs to be met but few competitors = low competition and high earning potential.

Focus on an niche idea and on a fashion target

Start with an online search and check if there is a question for your offer. You can check on search engine number one on China or Baidu controls the volume of research and that of competitiveness. If someone is looking for a product or an online solution it means that he has a need to satisfy.

Ask yourself: “What’s missing?”

SSENSE

One of the most effective tricks and to ask oneself “What is missing?”. Many times we rely on a manifest need, in a market that already has a thousand offers to satisfy it. The best successful products, often patented, were born instead by analyzing small market niches to capture potential unmet needs and position themselves with their product. In the case of the fashion world, ask and evaluate what is missing from Chinese fashion addicted, A brand more minimal? A clothing line made of lotus flowers? Search research search.

Find your niche market with social media

Explore Groups on social networks and forums, such as WeChat, Weibo, and Little Red Book related to your business idea and participate in the conversation. You could identify exactly the type of person that is right for you and ask for advice on the idea of ​​launching a product: would you like your audience? How much would they be willing to spend? What characteristics should the article in question have? Remember that Chinese consumers, especially millennials, like to be involved.

Next step for niche fashion market? Become digital

After doing all your research, find your niche in the world of fashion, created the brand is the time to find customers. One of the best ways to take is to jump into the Chinese digital market, because in fact in China now 82% of people make purchases online. Below is a list of the platforms and apps in the fashion industry that you need to know if you want to open your business in the middle ground.

Digital & luxe

Little Red Book

The retail app was born as a platform for reviewing and discussing products purchased abroad. The platform is a social network for fashion and beauty products, with 30 million active users per month. Created from an internet-based life platform, the Little Red Book targets more youthful buyers and spotlights on themes, for example, style, travel, way of life, plan, city aides, and sports.

It works as a blend of Instagram, Weibo, and Dianping, enabling clients to share and discuss about their encounters just as to make buys. Niche brands such as Monica Vinader and Lush have utilized the Xiaohongshu’ to pick up the presentation and make deals, and various extravagance brands have begun to create techniques. Vivienne Westwood has created a great collaboration with the Little Red Book, empowering her to dispatch crosswise over Asia.

Kaola.com

The Kaola.com web-based shopping platform, which name is the sound in Chinese of the words koala, has turned out to be one of the quickest developing sites where Chinese purchasers can buy products from abroad. With a more relaxed mind of the Chinese government for casual cross-border, this platforms is becoming more and more popular through Chinese consumer in age between 20-40.

Also, while other players mainly sell through marketplaces, our strategy focuses on selling featured products directly to shoppers. This business model enables consumers to purchase products at better prices and to save time in making their selection. Kaola.com claims the biggest stockroom zones in China, which enables the website to offer huge scale direct obtaining at marked down costs, however, marks are allowed to utilize outsider activity groups, warehousing and coordinations.

Kidiliz, a French fashion kids company joined Kaoloa to bring its tasks into China and is quickening its extension subsequently. From the USA instead the brand John Bosses Organics is sold on this platform too, but through sourcing cooperation, which is viewed as a standout because it’s the most productive way especially for niche’s brands to enter the market

The BEAST

On the site, you will discover numerous crafted items that go from fashion apparel to botanical items. They are watchful about which items they pick to show on the website, so teaming up with them is a long way from simple. Brands that succeed gain notoriety among the nation’s tip top.

They constantly seek out new ways to promote the brand, focusing on co-branding. One prominent example is the New Balance x BEAST collaboration. The iconic American footwear brand launched 3 new colorways of their 520 model. This was exclusive to the Chinese market.

Have you already found your niche? Do you think your brand is ready for the Chinese fashion market? Contact GMA, we will create an infallible strategy for you.

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