Who is winning in fashion?

After a couple of crazy years at least part of the fashion industry is getting its equilibrium back.  The winners have been premium leisure wear and luxury as the “K” shaped recovery has has sharply exaggerated relative affluence. Chinese fashion has enjoyed the fastest and most sustained recovery and so let’s look there first. We’ll come back to “athleisure” and luxury in other notes.

A cluster of factors have ensured Chinese fashion is thriving. The Chinese economy was the first to start a recovery and travel overseas abandoned. The trend towards “Hanfu” - traditional Han dynasty styling is part of an increasingly inward looking China which is making moves almost every day to de-westernise the influence on its population. Hanfu tags on Weibo have 6bn views to date, and #Hanfu videos on Douyin (TikTok) in China have exceeded 50bn.

Alongside the rend towards more classically designed styling is a growing demand for Guochao - the idea of “national wave”  - highly contemporary design but with notes of nostalgia.

A resurgence of exceptionally gifted Chinese designers and smart business models. For example the rapidly growing Labelhood - a powerful combination of culture and commerce as independent designers and their young consumers collaborate together.  Live-streaming and  “ see now, buy now” shows have all breathed energy and experimentation into these immersive formats.

And of course there’s another reason for the surge in Chinese fashion - the island of Hainan - the paradise island for Chinese duty free shoppers whose sales continue to surge by 250% yoy with continued liberalisation (in a highly controlled way) of both tax free quotas and also the expansion of categories  - for example in 2021 adding electronic goods like laptops. Chinese shoppers denied the delights of Bicester Village are more than fulfilled by the words largest duty free outlet.

As ever, China is nuanced and for example the changes to algorithm service providers to be implemented on 1st of March will have very significant and largely negative impacts on the ability of Douyin, Taobao and many others to predict consumer preferences.

A government trying to remain in control of the huge creative tiger it’s riding will always make China the most fascinating market to monitor - another service we offer to clients.