An Analysis of the Development Situation of Garment Brand Enterprises in 2010 (II)

Not just local brands

In fact, we have turned our eyes to not only domestic brands in China's second-tier and third-tier markets, but have also been making progress here with international brands and even luxury brands that are highly valued.

Luo Yingyi, executive director of Singapore Belle Retail Group, said that the group's first division of Yingwu Department Store will be located in the Wuxi Zhongshan Road shopping district and will bring dozens of luxury brands. After this, Yingwu Department Store will open 20 stores in 10 second and third-tier cities such as Shenyang, Wuhan and Kunming.

“At present, the core properties of commercial real estate in China's first-tier cities are always the places of competition for Chinese and foreign brands. The cost of such entry is high. The emerging commercial districts in the second and third-tier cities are emerging, and the surrounding customers There is a great potential for consumption, but the consumer market will take some time to guide. This seems to us to be an opportunity,” said Li Yufang, an investor and executive director of Dalian Times Square. “This is also the time of Dalian Times Square that can attract nearly 30 The main reason for the arrival of international luxury brands."

Among them, PRADA, VERSACE, FENDI and so on are stationed in Dalian for the first time. GIORGIOARMANI, DIORHOMME, LANVIN, D&G, ANNASUI and OtherS are even entering the three provinces for the first time.

The arrival of the financial crisis, for those international brands, has also accelerated the process of their earlier entry into second and third-tier cities.

In their eyes, Chinese domestic demand has already begun to be driven. The major consumer market for luxury goods is no longer made up of the three cities of Beijing, Shanghai and Guangdong, and developed capital cities. Because after the financial turmoil, the performance of first-tier cities was poor, but the performance of second-tier cities remained strong.

Prior to entering Dalian last year, DIORHOMME had only one store in Beijing and Shanghai. "Even after the financial turmoil, DIORHOMME entered Dalian Times Square with a brand-new attitude," said Li Dakan, President of CHRISTIANDIOR China.

The development of consumption capacity of second and third-tier cities in China will not be underestimated in the next three to five years. Especially after the financial turmoil. Compared with cities such as Beijing and Shanghai that are very sensitive to international economic events, second- and third-tier cities are more resistant to financial turmoil.

In contrast, first-tier cities will centrally reflect the nation’s residents’ general spending power. This index will be affected by the changes in the spending power of a large number of foreigners in China and consumers in export-oriented economic cities in the south. The productivity of second- and third-tier cities is dominated by localized enterprises, and residents' spending power is more stable. They have concentrated on the actual consumption level of Chinese local residents.

In Li Dakang's view, the layoffs or tightening of multinational companies in first-tier cities has made consumers very cautious about spending on international brands. On the contrary, consumers in the second and third tier cities have performed more positively.

A background that cannot be ignored is that the per capita income of some second and third-tier cities is growing faster than that of the first-tier cities. People are more prosperous, and more money is available to them in the hands. They are more willing to spend money. For the high-income residents of second and third-tier cities, they not only have good income, but also have great enthusiasm for moving closer to the living standards of big cities and consuming luxury goods. Relatively speaking, people in these cities are more eager to consume and have greater market potential.

It seems that increasingly fierce competition will make the first-line clothing market, which has already become saturated, become even more narrow. The domestic market of second and third tier cities is still maturing, and its value is rising.