China – A Market With Promise

Spurred on by an economic boom that has no match anywhere else in the world, China has become a dynamo for growth and cultural change. Many people forget that dramatic advances in manufacturing, production and services have created a significant new consumer group.

"When you walk along the streets of Beijing or other major cities you notice how modern it's become. You see people on the streets who are into fashion and into brands," says Atessa Leroy, director of marketing at Givenchy. The fashion house has around 45 outlets in China - mostly men's wear and accessories - and was a pioneer in developing a retail network. Givenchy will be showing seven garments - three haute couture and four ready-to-wear - at The Fur Show Beijing 2002.

"Fur has always been an integral part of fashion; this is especially true in China which has a fur tradition that goes back thousands of years. "The Fur Show Beijing 2002" not only honours a great tradition. It also demonstrates fur's importance to contemporary top designers. The world-class designers involved are coming together in an unique event to celebrate fur," says Andreas Lenhart, Chairman of the International Fur Trade Federation.

China is the global leader when it comes to absorbing foreign investment. Along with the inflow of western capital have come new lifestyle ideas, and the Chinese are spending money on these new ideas as the money that flowed in circulates domestically. "We believe China has great potential," Ms. Leroy says. "There's a real interest in fashion. Perhaps only a small percentage of the population can currently afford to buy luxury items, but in such a huge country that percentage is quite a lot of people."

Boom times continue
China has had a remarkable track record in the past 25 years; In the years 1978-2001, gross domestic product (GDP) grew by more than 9% annually. The country has the fastest-growing economy in the world, and despite the global slump, GDP is forecast to grow by around 7% this year.

The next stages of this economic rocket will be realized when the effects of China's introduction into the World Trade Organisation (WTO) truly begin to be felt. On top of this, the general trend of China looking outward will be enhanced as the country gears up to host the 2008 Olympic Games. By mid-century, China is expected to surpass Japan and become the world's next-largest economy.

Fashion reflects the new affluence which has been spurred on by boom times. Around 30% of professionals wear mostly designer clothes. The trend is on the rise while the number of persons climbing into this socio-economic segment continues to grow dramatically. "The Chinese are very brand conscious, they will look for brand names," notes Nora Tse, area manager at Saga Furs' Hong Kong office. The fact that advertising revenues have risen by an average of 15% in each of the past few years is also a measure of the impact newer products have had on consumer habits.

Consumers finding direction
Consumerism in China is still a nebulous mass that is just beginning to gel. As Tom Steifel-Kristensen, Director of Communications at SAGA Furs of Scandinavia puts it: "That's why they looked to Europe and the US, for inspiration about what to drive, what to wear and so on. The Chinese have lifestyle wish lists like the West and that's why western brands are so successful. These would be the brands that have built a name over time."

Another factor influencing development in the country is tourism. China was the world's fifth-largest tourist destination in 2001. Not only do visitors bring hard cash, they also bring new ideas, which might simply be the clothes on their backs.

Surveys indicate that the higher income brackets are the most likely to try new and different products, while a relatively high percentage of them do so. "In the past five or six years there have been an increasing number of people using fur, mink and fox," says Nora Tse. "Fox was big a few years ago, but now mink is the thing. The latest trend is reversible garments, fabric on one side and fur on the other so either side can be worn. Trim is also big - for instance, fur on cashmere."

New generation, new trends
Younger professionals (under 45) tend to earn more money than the older demographic group, but fashion clothing has a high priority on the shopping lists of both segments, a trend that is rising especially rapidly among younger individuals. "Growth will be most dramatic among the younger generation," states Nora Tse.

The younger generation has been exposed to MTV, western cinema and perhaps most importantly, the Internet. The free flow of ideas is moulding today's and tomorrow's consumer. "Young people's eyes are opened to windows of the West," says Tom Steifel-Kristensen. "They're developing new tastes for themselves," he adds.