Winning in China: Top priorities for global apparel and fashion brands

| Report

The apparel, fashion, and luxury (AF&L1) market in China continues to be one of the largest and most dynamic in the world. After a difficult 2022, the industry is likely to resume double-digit growth, fueled in part by a rising middle class. However, for multinational companies, doing business in China is getting harder.

According to the National Bureau of Statistics, the China Consumer Confidence Index fell by 28 percent from October 2021 to October 2022, dampening consumer spending.2 Chinese champions are increasingly outpacing their global peers, and many are adopting a more agile operating model and supply chain to enable greater responsiveness to changing consumer preferences (exhibit). They are also adept operators of the various social-media and -commerce channels in China, engaging local key opinion leaders and consumers (KOLs and KOCs) to connect directly with consumers.

The sales contribution of top local brands has risen steadily over the past ten years.

In this article, we discuss how global AF&L brands can strengthen their long-term competitiveness in the Chinese market. Companies should start by clearly defining and communicating their brand position, ensuring consistency across online and offline channels. They can then reevaluate their strategies for both physical-store networks and digital platforms and can invest in omnichannel and direct-to-consumer (D2C) engagement. Last, enablers ranging from product development and supply chain to technology and digital infrastructure could also help global brands boost their efficiency and relevance for the local market.

Elevate brand positioning and communications

Preferences in China are constantly evolving and often follow a different path than those in other markets. Global brands should be prepared to tailor their brand positioning to appeal to local consumers and develop a true local marketing engine to deliver their value proposition.

Optimize store networks and formats

Consumers are shifting from traditional department stores to shopping malls in premium locations that boast a wider and more interesting array of lifestyle experiences and food and beverage options. Global brands in China could adapt by realigning store network presence in new traffic centers and exploring a variety of store formats.

Adopt an omnichannel D2C approach

Chinese consumers have embraced the omnichannel approach, and commonly jump between online and offline touchpoints before making a purchasing decision. Global brands could take targeted actions to implement an effective omnichannel D2C strategy and capture the value at stake, ranging from upgrading D2C digital touchpoints for a better consumer experience to equipping store staff for better customer engagement or encouraging omnichannel customer acquisition outside of physical stores. Harnessing the power of consumer data through a multitude of use cases could unleash further exponential value.

Seize opportunities in the convergence of e-commerce and social media

Shopping on social platforms has become a natural shift for Chinese consumers. To achieve sustainable growth in e-commerce, brands should develop tailored channel roles along the consumer decision journey and build new capabilities to drive operational excellence, ranging from developing local content to building live stream operations.

Localize product development for greater relevance

The savviest brands start with their global assets and IP as the foundation and then incorporate design elements that reflect local tastes and trends. To keep up with fierce competition from local brands, companies could reconfigure their organizational structure and accelerate time to market by adopting a “test and chase” model to test and review product features.

Adapt supply chain strategy for increased agility

Demand patterns are more dynamic in China compared with those of mature markets. Given the market’s unique needs, companies can tailor their supply chain strategy by embracing data-driven planning and developing a “China for China” supply chain while leveraging their existing infrastructure for all other global markets.

Prioritize tech and digital localization for enhanced resilience

Having the right technology and the right digital infrastructure and team in place is necessary to create seamless, localized experiences for consumers. Global brands could make targeted investments in technology in China, deliver localized digital products, and establish an in-market talent base while ensuring collaboration between global and local functions.


Breaking into the Chinese market is not without its challenges. Yet for every brand that has tried and failed, others have succeeded. Whether a brand or company wins ultimately depends on truly knowing Chinese consumers, market dynamics, and competitors and on harnessing global IP and assets. The levers we have highlighted can help global companies gain an accurate and robust understanding of the Chinese landscape and adapt accordingly, thereby opening the door to one of the world’s most exciting markets.

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