Last year, China’s luxury market dipped 2 percent to CNY113 billion (about $17.2 billion). The chief culprits? Declining sales of menswear, watches and leather goods, according to Bain & Company.
For luxury menswear purveyors like Zegna, Dunhill and Hugo Boss, all of which moved into China in the ‘90s and rely on the region for a significant part of their businesses, this is bad news. Last year, Zegna’s sales in China — the company’s largest market — fell 5 percent, while Hugo Boss’s China sales fell 2 percent in local currency, dragged down by poor menswear sales, which declined by a double-digit rate for the second consecutive year.
However, there are a few bright spots in China’s menswear market, which was worth CNY492 billion ($74.9. billion) in 2015 and is predicted to reach CNY585 billion ($89 billion) by 2020, according to Euromonitor. Last year, the market for casual menswear outperformed formal menswear in China, opening up opportunities for value brands and luxury labels alike.
“Rare occasions require formalwear as a must in China,” explains Lui Wan, who leads Euromonitor International’s research team in Shanghai. “Even in the workplace, only a few companies have strict rules about wearing formal to work.” In the last few years, casual brands have taken market share from formal brands, she notes, as more men are shopping for plain, relaxed items that are work-friendly and easy to mix and match.
Beneficiaries of these changing tastes include Uniqlo, Nike and Adidas, which have the highest market value share for menswear in China out of international brands, and Zara’s parent company Inditex and H&M, which have been steadily increasing their share since 2011. (Over the same period, Armani and Hugo Boss both lost market share and now have a lower market share than Inditex and Uniqlo.) Last year, Uniqlo recorded the highest value growth of a brand for menswear in China — a fact Wan puts down to its reputation as “affordable with good quality” and the company’s “massive expansion of new stores.”
(Source: Business Of Fashion )