Originally published in Apparel Magazine December, 2006
If there is one thing that Western apparel companies should know about China, it is this: Brand sells.
Understanding the role brands play in China is important for anyone doing business there, and it is especially crucial for companies trying to satisfy the enormous appetite there for Western apparel.
To mainland Chinese consumers, brands are about much more than mere commercial communication. They are a political and economic phenomenon symbolizing China’s rising prosperity. For the average Chinese consumer, owning a Western brand means owning a piece of their country’s growing affluence.
Brands, particularly those from the West, are closely linked to national pride. The Chinese see the country’s economic boom as allowing their country to take its rightful place of power and prestige in the world. Nothing is more emblematic of that pride and success than brands.
The free market system is still very new in China. Even young consumers can remember a time when there were no brands or imports and shelves were mostly empty. Clothing choices were limited to Mao suits, the unisex blue tunics of the proletariat, or shapeless and dreary garments from the state department store.
Today, the growing middle class can access a dizzying array of choices and a level of quality once only dreamed of. Even the very poor can at least see these goods and aspire to own them.
Western brands once were known only through furtive looks at smuggled magazines or glimpses of the elite few who had traveled to the West. They still have tremendous cachet. They symbolize the wealth that formerly was out of reach, and they represent the rewards that now can be attained. To wear a Western brand today is to tell everyone you are prosperous and worthy of respect. You have arrived.
But the political and economic aspects of brands are only part of their power. Brands play into a powerful and longstanding cultural dynamic in China, where reputation is everything. The good things in life traditionally come from connections.
Business is built through knowing people and being recommended by them. Presentations to prospective clients include a long list of companies you’ve worked for or are associated with. An earnest young man gets a good job through the introduction by his uncle’s friend. Your reputation and the recommendation of a trusted source is what opens doors.
In the Chinese marketplace, brand plays that role. Brand is a symbol and proxy of reputation. It is the stamp of approval that opens the door. It is often the most important influence on apparel-buying decisions.
Of course, in Western markets, too, people consider brand when making apparel-buying decisions. But at the same time, they consider need, fit, styling and other specifications. They won’t buy a Polo shirt if they don’t need one – particularly if they don’t need an orange one. In China, it doesn’t matter. They’ll buy the shirt, irrespective of color, if it has the “right” brand.
A friend recently took me clothes shopping in China. Through her knowledge of the market, she kept abreast of a constantly changing array of temporary shops (actually stalls) selling brand-name merchandise. During our visit, I found an assortment of shops with no theme, just racks and racks of random merchandise. There was clothing for all seasons, all styles – men’s mixed with women’s and children’s. Evening gowns were next to parkas and running shorts. About the only constant was that they all featured prominent Western brands: Ferragamo here, Nautica there, with a little Gymboree thrown in. There was no sense of color or style – just ‘brand, brand, brand,’ the more prominent the better.
Even faux brands sell. One Chinese businessman cited the practice of registering Western-sounding names in European countries and sewing those names into apparel under the pretense that it was “from Paris.” You can see such “brands” on the tables of street vendors – clothing with names like Bellvilles and Jack & Jones. The Western identity gives them cachet.
For apparel companies, China’s love of Western brands is a huge leg up. But it won’t always be so. As the Chinese become more sophisticated, so too will their estimation of brands. Cultural dynamics will always make brand important, but it will eventually have to stand for real and relevant values.
Savvy marketers will begin telling their story in China now, while the market is paying attention. Start differentiating now to be in a position to retain market share and margin in the future.