Retail in Asia

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Chinese are growing weary of domestic brands

In a recent research report Barclays Capital says that after continued double-digit wage hikes, many more mainland Chinese aren’t just getting wealthier, but also more discerning on how they spend. Increasingly, they are looking at premium products and often, foreign ones. This, they say, applies to both staples and discretionary consumers brands.

Chinese companies who haven’t invested in building strong brands, research and development, and product development stand to lose the most during these times of shifting consumer taste, says Barclays. However, multi-nationals that have been investing in their mainland Chinese businesses are most likely to reap the benefits of new preferences.

Both Nike and adidas have expanded into second- and third-tier cities, taking market share from local sportswear names like Anta, Li Ning, and China Dongxiang. It is likely that foreign companies will continue to gain headway in Chinese retail, considering that sector has become considerably deregulated since entering the World Trade Organisation 10 years ago.

(Source: red luxury)