HO CHI MINH CITY UNIVERSITY OF EDUCATION

English Department


Topic: Can Chinese Domestic Retailers

dominate their Fast-Fashion Market?

Group 6: GOAL DIGGERS

Subject: Business Research 1
Lecturer: Ms. Đoàn Thanh Phương
Members:
Nguyễn Thanh Hà 4501751050
Nguyễn Thị Thúy Nhi 4501751176
Hoàng Thị Thảo Trinh 4501751291
INTRODUCTION

The fashion industry is increasingly attracting attention and asserting its position in revenue growth.
Shopping for clothes seems to be a luxury for some people, they can't afford to buy clothes that won't
be duplicated for a week, a month, or even a year. However, this started to change in the late 1990s,
people started to spend discretionary on clothes as a way to relax, and de-stress. Along with that is
the dizzying change of fashion trends, leading to the formation of trendy designs that are mass-
produced at low cost. Since then, the phenomenon of fast fashion was born (Brardwaj & Fairhurst,
2010). Therefore, these items are often cheaply priced, and suitable for the masses while still
promptly responding to the latest fashion trends. Fast Fashion's target audience is a group of young
customers who always have a fashion sense that follows the "trend". Of course, for a country with
billions of people like China, it will not be easy to ignore this lucrative industry. Chinese startups are
entering the global fast-fashion market with abundant product lines at unprecedentedly low prices,
and fierce competition with established brands like Zara and H&M - two giants of the fast fashion
industry (Daxueconsulting, 2019)

The pressures on the international market with China have also raised concerns for the growth of
the giant country's apparel startups. The strong growth of international retail brands in the Chinese
domestic region also creates a challenge for local brands in this country. Emerging local brands must
begin to attract attention from customers who are used to international brands, creating interest in
domestic brands (Wang & Yang, 2018). According to Chinese fashion style, it is currently a country
that is highly appreciated for its extremely good and fastest trend of catching trends in the world.
Fashion items at this place both show special styles and designs and are sold at quite cheap prices
compared to wholesale prices. It has grown extremely well internationally and has a high level of
recognition (Eberhardt et al. 2007). But will they win the trust of their domestic customers? And how
will they rise to compete with long-standing international brands in their country? This research will
make predictions about the current fast fashion phenomenon in China and what opportunities are
there for local brands in China to beat the giant retailers in their domestic region?

LITERATURE REVIEW

Fast fashion is the term used to describe clothing items that catch on to trends quickly; they are
inspired by items from fashion shows and are produced very quickly to be shipped to stores. Fast
fashion allows consumers to buy trendy clothes at affordable prices (Doyle, Moore, & Morgan 2006).
Some of the famous fast fashion brands like Zara, H&M, UNIQLO, GAP, and Forever 21 had seen the
growth potential in the Chinese market, and as a result, they grew rapidly and created a fast-fashion
craze comes with clever marketing strategies (Liu & Zhang, 2019). Fast fashion became popular
because clothes became cheaper, consumers became more and more interested in trendy clothes
and their purchasing power increased. As a result, fast fashion is challenging seasonally launched
product lines by well-known traditional fashion companies.
In China, online shopping, particularly mobile buying, has revolutionized the retail industry. Taobao,
T-mall,… have become increasingly popular for serving the daily needs of young people.

Besides that, many young Chinese people tend to choose expensive fashion brands. According to a
McKinsey & Company study, Chinese customers are getting more sophisticated (Yuval et al. 2012).
When the income of urban Chinese households grows to the upper class, as a result, Chinese
consumers prefer to purchase high-end branded merchandise.

Chinese clients have high brand awareness and brand loyalty. The demand for high-end fashion
products among Chinese consumers has grown in recent years. Chinese consumers have been
demonstrated to have discriminatory biases for foreign brands over Chinese firms. Global businesses
have transferred production factories to China in recent years, while Chinese firms have turned their
attention from exporting to creating brands in the home market. (Yingjiao, Ting & Jin, 2018).

Chinese consumers are looking for more innovation and value in money, and they know they have a
variety of choices. Brands will have to be very clear on what they stand for if they want to reach
success in this competitive market. The fact that China has become a lucrative apparel market due to
its gigantic population and rapid economic growth is undeniable. The dynamism of this country makes
it a remunerative market for those international fashion brands. This leads to intensified competition
between foreign and domestic brands.

China’s status as the world's largest manufacturing nation has given its fashion designers an
underrated profile. This leads to the win of these Western brands over China’s local market. However,
this is expected to change in the future as the country’s role as the largest consumer economy with
brands of domestic origin rapidly strengthens.

Consumers are increasingly interested in their country’s products, and this change in cultural
emphasis has created great opportunities for Chinese fashion designers of collective Chinese origin.
To satisfy their consumer, Chinese designers need to be able to combine the cultural elements into a
characteristic and well-established personal vision (Tiziana & Tim, 2012)

Research on how mainland Chinese fashion designers and brands are growingly positioned in their
local marketplace has been conducted. However, further study of whether or not Chinese retailers
can win over global competition hasn’t been discussed. This research question will help lead to a
better understanding of the Chinese dynamic fashion market.
RESEARCH OBJECTIVES:

We will assess the growth and potential of Chinese brands in the fast fashion market, then through
analyzing the competition between domestic brands and international competition (world brands)
within the country's market we will come to a prediction that whether or not Chinese retailers can
dominate their local market.

METHODOLOGY

Since Chinese customers are aware of the fact that they have a variety of choices. They gradually
demand more, they demand value for what they paid for. To be able to observe customer behavior,
the preferences, and choices of this young generation, we believe that conducting a questionnaire
survey is necessary. By conducting questionnaire surveys with customers, we can gain a broad
understanding of the issue from various angles. We can also simply obtain various responses. From
there, we can get a sense of how customers feel about the Chinese market.

And from what has been researched, we can assess the domestic competition. In this questionnaire,
we will ask customers to share their choice between Chinese domestic brands and international
brands, as well as explain this choice. Analyzing the reasons for customers' choice, we will study the
strengths and weaknesses of the two competitors, which will greatly help in promoting competition.

Creating a survey questionnaire and posting it on social media platforms, where a large number of
young customers gather, will attract those who are interested in learning about the Chinese fast
fashion industry. Since the survey area is in China, it is convenient to create an online survey. Face-
to-face interviews with customers are time-consuming and may not be enough to answer the existing
questions. The survey also brings a sense of personalization when keeping information about the
survey takers private. There will only be questions about gender, range of age, and occupation. We
believe creating a sense of privacy for customers will help them have the urge to freely comment and
give their personal views on the question asked without fear of identity disclosure. This therefore will
lead to better, more reliable, and valid survey results (Boswell et al. 2013).

Chinese consumers have high brand awareness and loyalty to the brands they use. And they also used
to favor global brands over domestic brands. This is why customer surveys are essential to fully
understand the country's dynamic market. However, with many international brands starting to
manufacture in China, and domestic brands shifting from exporting to focusing on branding in their
market. Are their choices and tastes likely to change? Therefore, the questionnaire survey will be very
helpful in providing new industry insights so that brands can thrive and compete vigorously in this
country's rapidly changing business environment (Ye & Lau, 2018).
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