Profit
Profit is one of the four pillars of the fashion industry, and it is also a very important one, because profit refers to the operating results of a fashion enterprise during a certain accounting period. The profit of a fashion brand can change the future development of the brand, that is, A concrete representation of the end result of this fashion brand.
Fashion Industry in China: Analysis of the world’s largest fashion market. In China, fashion is everywhere, on the streets, in commercial centers, on e-commerce platforms, on TV and, of course, on social media. There are multiple ways for brands to market in this culturally diverse country and launch their products among consumers who desire attractive designs at reasonable prices. According to McKinsey, China overtook the United States to become the world’s largest fashion market in 2019. Over the past decade, China’s fashion industry has been booming and developing. Currently, it continues to expand at an exponential rate. With rapid urbanization and the increasing ability of the population to spend, both high-rise and low-rise apparel markets are growing rapidly. From 2020 to 2021, duty-free shops have maintained a high profile in China. In January 2021, Hainan opened five new duty-free shops on the remote island and currently operates nine stores. During the Spring Festival holiday from February 11 to 17, sales of duty-free shops on the remote island of Hainan exceeded 1.5 billion yuan, double the amount during the Spring Festival holiday in 2019. During this period, there were more than 200,000 shoppers. Even in the face of the current global Covid-19 epidemic, China still maintains the highest level of luxury consumption in the world, and is an important source of profit for many fashion brands under the influence of the epidemic in recent years. According to news reports, the Guangzhou Hermès store, which was not long after Covid-19 started, quickly reaped more than 2 million yuan in revenue. (VOGUE BUSINESS IN CHINA 2020)
In order to better attract Chinese consumers to buy, many fashion brands will launch a series of products with Chinese New Year elements every year during the Chinese New Year to attract consumers to buy, such as the Chinese zodiac, phoenix, auspicious cloud embroidery, red, etc. in China regarded as auspicious elements. Many fashion brands have also entered Chinese e-commerce platforms, such as Alibaba and JD.com, to boost sales profits. With the rise of short videos in large numbers, fashion brands’ sales through short video apps are also on the rise. Chinese TikTok, the world-renowned short video platform, is taking a hard line in order to break the near-monopoly of the fashion industry by large e-commerce platforms such as Alibaba and JD.com. As of September 6, 2020, brands must partner with KOLs on the platform through Douyin, and they can no longer promote products on third-party e-commerce sites through Douyin’s livestreaming service. In October, Douyin completely banned links to third-party websites from appearing on its live channel. This prevents merchants from redirecting traffic to popular e-commerce sites such as Alibaba Taobao, Tmall or JD.com. Instead, they had to trade within the Douyin platform. Douyin is not the only platform actively entering e-commerce. Its rival Kuaishou announced that it facilitated more than 500 million e-commerce orders in August 2020, claiming this made it the fourth largest e-commerce service provider in China after Taobao, Tmall, JD.com and Pinduoduo business.
The success of a fashion brand in terms of profit depends on whether the brand can capture the attention of consumers and retain consumers. For example, in many traditional festivals in China, such as the Mid-Autumn Festival and the Dragon Boat Festival, some brands such as Louis Vuitton, Dior, Balenciaga, Hermès, Gucci, etc. will send their consumers exclusive holiday gifts to express their blessings. This is also the reason for the success of a fashion brand. They will know what their biggest consumer group wants, and having better service can also better enhance brand profits.
Bibliography
Business.css-1cd9gw4{margin-left:.3em;} Exclusive reports, industry analysis and data insights focusing on the fashion industry.css-uodor8{border-radius:50%;}.css-1y9jkzv{box-sizing:border-box;margin:0;min-width:0;max-width:100%;height:auto;background-color:#FFFFFF;width:38px;height:38px;border-radius:50%;}Vogue (no date) Why is it that the more “collapsed” people are, the more they like to buy, buy, buy?, Zhihu. Available at: https://zhuanlan.zhihu.com/p/162956950 (Accessed: October 23, 2022).
Consulting, D. (2022) Analysis of the fashion industry in China, Daxue Consulting – Market Research China. Available at: https://daxueconsulting.com/fashion-industry-in-china/ (Accessed: October 23, 2022).
says:, P. (2021) Fashion in China: Top marketing strategies for brands, Marketing China. Available at: https://marketingtochina.com/fashion-in-china-top-marketing-strategies-for-brands/ (Accessed: October 23, 2022).