Garments Industry Must Shed Pretense
[2009-06-25]
Some time ago I visited Isetan, an upscale department store in Shanghai, and saw small boards near the doors of many garment shops. The black-and-white boards gave the brand names and places where the garments were made. Basic though the information may seem, it could go a long way in helping China's consumers and its fashion industry both.
It's an open secret among industry insiders that less than 20 percent of the foreign-sounding brands sold in many department stores are really foreign. Broadly speaking, stores in China have four types of "foreign" brand garments: authentic foreign brands, foreign brands licensed to Chinese firms, brands registered by Chinese firms abroad but operating solely in China, and thoroughbred Chinese brands that sound foreign.
Though this applies to all segments of garments, men's wear is the best example of the rules of the retail market game. That's because men's wear is more about quality, and less about design (which varies little), and it's difficult to sell them at a higher price without giving them Western names, Italian- and French-sounding ones being the most popular.
The garments industry's value chain has extended. Zhejiang and Jiangsu provinces, for example, have seen the mushrooming of agencies and consultancies specializing in so-called brand operation. This specialization is nothing but getting overseas registration for Chinese firms that design, make and sell their products exclusively in China. And since there is no systematic flow of information, consumers literally pay a much higher price for what they buy - especially because they take them to be high-end products.
The problem is not plaguing the garments industry alone. The bedding and furniture sectors, just to name two others, also suffer from it because of customers' brand fetish. Chinese are attracted to foreign-sounding brands because generally, they think foreign-branded clothes and other products are more stylish, of higher quality and, more importantly, represent higher status.
Many studies show consumers in fast developing economies will be drawn to foreign products in the initial stages of development. Since China is slowly entering its next stage of development, we have begun seeing some domestic fashion brands proudly assert their Chinese roots. Such products cater to more culture-conscious consumers. Foreign goods and brands, however, are still mesmerizing for most Chinese.
That is not to say businessmen and traders have the right to disrespect the sanctity of a brand. It would violate consumers' rights, especially their right to know about and choose from the available products, and hurt the relationship between sellers and buyers.
Many established Western fashion brands have outsourced production in China, demonstrating the high quality of Chinese manufacturers. China's designing industry may still be behind the West, but it has improved by leaps and bounds in recent years. Quite a few Chinese fashion designers, in fact, have won international acclaim, with some even sharing a slice of the market.
Ironically, the fact that domestic brands with foreign-sounding names sell more could mean designing is a much smaller problem for Chinese clothes' brands. Instead, what has been lacking is brand power and confidence. The paradox is that the more the Chinese brands promote themselves as foreign ones, the more they would be pushing the country's fashion industry backward.
Consumers are maturing, and in all likelihood domestic brands pretending to be foreign have to reposition themselves and overhaul their marketing strategy. That would make the investments already done on these heads a waste. Even their "brand power" will suffer.
The malpractices in the garment industry could be a mirror of the outdated business view: Sell in whatever way you can because that's what counts the most. Such a strategy will usually lead companies to a dead end. The country's legal environment has improved greatly and will continue to get better. The Internet will empower consumers further, shedding light on darker corners. New generations of consumers will be more literate, worldly and fashion savvy.
So in order not to be left behind by the shifting sands of the garments and fashion industry, pretentious brands should start correcting their ways by acknowledging the origin of their products, and creating a solid and sustainable stage for operations.
It's an open secret among industry insiders that less than 20 percent of the foreign-sounding brands sold in many department stores are really foreign. Broadly speaking, stores in China have four types of "foreign" brand garments: authentic foreign brands, foreign brands licensed to Chinese firms, brands registered by Chinese firms abroad but operating solely in China, and thoroughbred Chinese brands that sound foreign.
Though this applies to all segments of garments, men's wear is the best example of the rules of the retail market game. That's because men's wear is more about quality, and less about design (which varies little), and it's difficult to sell them at a higher price without giving them Western names, Italian- and French-sounding ones being the most popular.
The garments industry's value chain has extended. Zhejiang and Jiangsu provinces, for example, have seen the mushrooming of agencies and consultancies specializing in so-called brand operation. This specialization is nothing but getting overseas registration for Chinese firms that design, make and sell their products exclusively in China. And since there is no systematic flow of information, consumers literally pay a much higher price for what they buy - especially because they take them to be high-end products.
The problem is not plaguing the garments industry alone. The bedding and furniture sectors, just to name two others, also suffer from it because of customers' brand fetish. Chinese are attracted to foreign-sounding brands because generally, they think foreign-branded clothes and other products are more stylish, of higher quality and, more importantly, represent higher status.
Many studies show consumers in fast developing economies will be drawn to foreign products in the initial stages of development. Since China is slowly entering its next stage of development, we have begun seeing some domestic fashion brands proudly assert their Chinese roots. Such products cater to more culture-conscious consumers. Foreign goods and brands, however, are still mesmerizing for most Chinese.
That is not to say businessmen and traders have the right to disrespect the sanctity of a brand. It would violate consumers' rights, especially their right to know about and choose from the available products, and hurt the relationship between sellers and buyers.
Many established Western fashion brands have outsourced production in China, demonstrating the high quality of Chinese manufacturers. China's designing industry may still be behind the West, but it has improved by leaps and bounds in recent years. Quite a few Chinese fashion designers, in fact, have won international acclaim, with some even sharing a slice of the market.
Ironically, the fact that domestic brands with foreign-sounding names sell more could mean designing is a much smaller problem for Chinese clothes' brands. Instead, what has been lacking is brand power and confidence. The paradox is that the more the Chinese brands promote themselves as foreign ones, the more they would be pushing the country's fashion industry backward.
Consumers are maturing, and in all likelihood domestic brands pretending to be foreign have to reposition themselves and overhaul their marketing strategy. That would make the investments already done on these heads a waste. Even their "brand power" will suffer.
The malpractices in the garment industry could be a mirror of the outdated business view: Sell in whatever way you can because that's what counts the most. Such a strategy will usually lead companies to a dead end. The country's legal environment has improved greatly and will continue to get better. The Internet will empower consumers further, shedding light on darker corners. New generations of consumers will be more literate, worldly and fashion savvy.
So in order not to be left behind by the shifting sands of the garments and fashion industry, pretentious brands should start correcting their ways by acknowledging the origin of their products, and creating a solid and sustainable stage for operations.
Source: China Daily
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