When it comes to lingerie, experts say there is most definitely a lack of innovation in China’s domestic market, which has now resulted in a huge glut of average products aimed at the mass market.
According to data from research firm Frost & Sullivan, that problem is compounded by the fact that the market remains too fragmented with around 3,000 lingerie manufactures operating across the country, none of whom claim to have more than a three per cent share.
The five biggest firms account for about six per cent measured by sales revenue. And with new firms still entering the fray, analysts are now warning we could be about to see a wave of failures, as many struggle to bring in the income they need, simply to survive.
The most recent figures, from the country’s two largest players, illustrate well how tough a market it is at present.
Cosmo Lady sells bras from 50 yuan and is focused on the mass Chinese market. But it has just announced a 35.6 per cent plunge in interim profit to 174.02 million yuan, which the firm’s chairman Zheng Yaonan blamed on fierce competition and the sluggish economic development.
Cosmo’s main rival, Hong Kong-listed lingerie maker Embry Holding, meanwhile, also saw an 18 per cent fall in sales during the second quarter, and again blamed its slump on tougher competition.
Chinese firms including Beijing Aimer, Maniform and Ordifen (bought by Cosmo Lady last year) are already chasing the higher-end of the market, by raising their quality.