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Survey advises hong kong apparel brands to target china

Survey advises hong kong apparel brands to target china Source:
Date: 28-02-2013
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Prospects in the global clothing market are looking ragged but not unsalvageable. A key player will be the Chinese mainland, as developed economies in Europe, the United States and Japan struggle to recover.
Weak job markets and government tax policies have placed huge constraints on consumers in this traditionally powerful sector. But emerging markets are riding to the rescue. Higher standards of living are empowering shoppers to demand more in regards to quality and style.
The mainland is set to be a key market for the industry. Many far-sighted Hong Kong garment companies entered the mainland market years ago and have since consolidated and built sound reputations there.
With many Hong Kong brands widely recognised and accepted by mainland consumers, they can build on rising demand. The Hong Kong Trade Development Council conducted surveys on mainland garment consumption in 2001, 2002 and 2008. A survey of 13 mainland cities was also carried out last year to understand the latest consumer patterns for clothing, and advantages for Hong Kong brands.
The 13 cities covered in the survey during the first quarter of the year were Nanjing, Shanghai, Hangzhou, Harbin, Shenyang, Beijing, Tianjin, Dalian, Wuhan, Chengdu, Chongqing, Guangzhou and Xian. Some 3,250 consumers were interviewed, including employees, housewives and students who had lived in the surveyed cities for at least two years and purchased garments in the 12 months prior to the survey.
The main reasons given by respondents for buying clothes were for practical necessity and seasonal changes, but there were also more subtle motivations. Many made purchases because of discount offers or to keep up with fashion trends.
Many Hong Kong brands are widely recognised and accepted by mainland consumers. The selection criteria for buying clothes were, first and foremost, quality, followed by reasonable prices and trendy styles. In some cities, consumers were particularly concerned that a clothing brand’s image had to be appropriate or tasteful.
Overall, mainland respondents were particularly influenced by domestic fashion trends, while the impact of fashion elsewhere was not considered of great importance. Among the cities surveyed, Shanghai, Shenyang and Xian were more influenced by external fashion trends than others. In the 12 months prior to the survey, the average annual spending on garments was Rmb2, 635 per person.
Spending in each city was generally proportionate to per capita income. The clothing budget over the 12-month period was Rmb3, 616 per person. In fact, consumers in all cities except Guangzhou expected to increase their clothes spending.  In Tianjin, Chongqing, Hangzhou and Xian, in particular, the expected increase in spending was more than 60 per cent.
As to their clothes-buying habits, mainland consumers tend to visit stores, with almost 70 per cent heading there at least once a month. Shopping times are mainly during weekends and public holidays. Department stores are the most popular places to shop; the main reasons are the expected wide variety of brands, a pleasant shopping environment and personal recommendations.
Consumers are generally satisfied with the customer service of garment sales channels and clothing stores, giving them a rating of almost four out of a maximum of five. Promotions involving discounts, stands at shopping malls and TV or radio commercials are the most effective promotion channels.
In Shanghai, Beijing, Wuhan, Chengdu and Guangzhou, however, respondents said that garment exhibitions were more effective than promotional shopping mall stands or broadcast commercials to induce them to buy clothes.
Overall, mainland respondents find Hong Kong brands fashionable in style, unique in character and excellent in material or quality. Almost 20 per cent of respondents were willing to buy more Hong Kong branded garments in the future.
They were also willing to pay a premium, ranging from 14 per cent to 133 per cent, for Hong Kong brands over mainland brands that offered similar product quality. Among the cities surveyed, respondents in Hangzhou were willing to pay the highest premium while those in Beijing the lowest.
Route to Better Sales
Most survey respondents were receptive to new brands, particularly from Hong Kong. Hong Kong companies could therefore capitalise on this advantage and clearly define their market positioning and target customers. By so doing, they should be able to build their brands and raise their reputations as well as enhance market receptiveness and establish a reputation for quality.
Hong Kong garment brands should ideally target the mid-range market and foster a new consumer culture by offering Hong Kong styles, brand names, designs and management that suit mainland fashion trends and consumer preferences. Hong Kong companies can consider setting up points-of-sale in department stores, the main focus of clothing sales.
The overall benefit could well exceed that from establishing chain stores or independent shops. Regarding promotion strategies, Hong Kong companies can attract customers and raise awareness by participating in discount promotions or by setting up promotional stands in shopping malls. This, coupled with popular TV or radio commercials, would boost brand penetration.
As consumers attach increasing importance to quality and service, Hong Kong companies should strengthen, or ask their mainland retail outlets to strengthen, sales and after-sales services, in addition to maintaining good and competitive price performance ratios.
The latest survey showed that offering free alteration services and increasing product ranges and styles can help raise customer satisfaction. Consumer habits vary from city to city and among different consumer groups, so Hong Kong companies should formulate corresponding marketing strategies, offering the right products for the right needs
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