China's Textile and Apparel Market Shows New Vitality


Consumption has continued to be a strong driving force for China's economic growth. From 2011 to 2019, the contribution rate of final consumption expenditure to GDP growth exceeded 50.0% for 9 consecutive years, stabilizing at 60.0% on average, and as high as 69.0% in 2015. In the aftermath of pandemic, its contribution rate dropped to -22.0% in 2020. With the remarkable results of the control and prevention of the pandemic, the contribution rate of final consumption expenditure to GDP growth in the first half of 2021 reached 61.7%, and the role of consumption in the new development pattern has become more prominent.

Apparel is an important part of residents' basic necessities. From January to August 2021, the retail sales of clothing, foot & head wear and knitted goods totaled CNY856.5 billion, accounting for 3.0% of the retail sales of consumer goods. Driven by new models and new formats, China's textile and apparel consumer market has shown an active trend.

I. China chic leads new consumption hotspots

In 2020, China's GDP reached CNY 101.6 trillion, which was more than 9-fold than that of 2001. The per capita GDP has increased from CNY 8,717 in 2001 to CNY 72,000 in 2020. And the per capita disposable income of residents has increased from CNY 18,000 yuan in 2013 to CNY 32,000 in 2020. China's comprehensive national strength has been greatly improved. And the cultural self-confidence, social identity and sense of belonging have become prominent.

China Chic is the new trend for Chinese brands to include traditional Chinese concepts in everyday fashion items. As an important category of China chic products, apparel and accessories have shown good growth momentum both online and offline. According to the 2021 Baidu Search Big Data of China Chic, among the top-ten trending hashtags about China chic in 2021, China chic apparel ranked the second most popular topic. The attention of China-chic apparel surged by 56.0% compared with that of 2016, indicating the increase in cultural identity. According to iiMedia Consulting's survey results, among the reasons why consumers buy Hanfu, 40.5% belongs to the consumers' affection of Hanfu culture, 36.9% of consumers are based on the beauty of Hanfu, and 33.6% of consumers believe that Hanfu can fully express their individuality.

As China's economy and cultural self-confidence grow continually, China chic will become a long-term consumption trend rather than a short-term consumption hotspot. China chic apparel, supported by the complete and flexible supply chain of China's textile industry, will improve its competitiveness continually, helping enterprises to enhance product competitiveness and cultivate global brands.

II. Sportswear drives new growth

People's well-being has been continuously improved. And the government has strengthened the overall planning and guidance of national fitness through policies. The enthusiasm for national fitness continued to grow. After the Covid-19 pandemic, people's awareness of health has increased significantly, and the willingness to enhance immunity through exercise is obvious. According to CBNData & Keep survey data, 76.0% of people said that they will pay more attention to health and exercise after the epidemic.

The upsurge of national fitness directly drives the demand for sportswear. According to data released by Euromonitor International, the size of China's sportswear market surged from CNY 166.9 billion in 2015 to CNY 315 billion in 2020. However, there is still a gap between China and developed countries in the per capita consumption of sports shoes and apparel. In 2019, China's per capita consumption of sports shoes and clothing reached US$ 32.93. While the per capita consumption of sports shoes and clothing in the United States, the United Kingdom, and Germany were respectively 11.7 times, 4.8 times, and 4.5 times higher than that of China. There is huge potential in the domestic sportswear market. In addition, the State Council, China's Cabinet, approved a five-year National Fitness Program in the 2021-2025 period, which gives guidelines for deepening sports reform, increasing participation in sports, advocating national fitness, and promoting a healthy China. It put forward a development goal, that is, the proportion of people who regularly participate in physical exercise will reach 38.5% by 2025, driving the total scale of the national sports industry to CNY 5 trillion. Driven by the nationwide fitness enthusiasm, huge potential consumer market, and the support of a complete textile industry chain, China's sportswear market is expected to swell to CNY 546.6 billion in 2024.

III. Live streaming e-commerce stimulates the potential consumer market

The online retail market has become an important channel due to the pandemic. According to data released by eMarketer, the global online retail market reached US$ 42.8 trillion in 2020, up by 27.6% year-on-year, which was much higher than expected. And it is expected to maintain a growth of 14.3% this year. High popularity rate of the Internet and the large scale of Internet users in China have laid a solid foundation for the development of e-commerce. After the implementation of social distancing policy in 2020, e-commerce became ever more popular in secondary cities. The innovative e-commerce models have promoted the potential consumer market. According to the 48th Statistical Report on Internet Development in China, as of June 2021, the number of Internet users in China reached over 1.01 billion, of which online shopping users reached 812 million, accounting for 80.3% of the total Internet users.

Live streaming e-commerce has brought significant growth in consumption through innovative models. In 2020, the scale of live e-commerce transactions exceeded CNY 1 trillion, ballooned by 142.0% year-on-year. In comparison, e-commerce platforms focus on the large-scale shelf-like commodity supply. Through channel operations and commodity marketing, consumers will search for goods with clear consumption purposes. While live e-commerce centers on visualized product content, focusing on product content operation and interest content recommendation, which can fully trigger potential consumer demand. Judging from the turnover of Tiktok's "818 Goods Festival" in 2021, apparel remains the top consumer category in live e-commerce. Its turnover accounts for 34.2% of the total turnover, followed by beauty care (15.1%), jewelry (14.0%) and snack (6.2%). Live e-commerce is becoming become an important engine for the growth of the domestic consumer market.

Overall, in the domestic consumer market, new models and new formats are gradually developing. Their new characteristics and growth points are presented continually. With the continuous improvement of domestic consumption policies and the consumption environment, China's market will release more consumption potential, laying a foundation for a "dual circulation" development pattern.