Small, but Significant: The Children’s Wear Market in China

Source: Fashionbi

Famous brands are developing children’s collections to reinforce their brand image and selling power in regions like Asia. Not only fashion trends, but particularly the trend of following western culture can be a crucial indicator of a rapid market growth. Today, children’s fashion is an undeniable must have in the Asian clothing market – parents do pay close attention to what their children wear, and they do spoil them buying luxury fashion items.

Potentially unlimited opportunities and increasing income levels have an enormous impact on the fashion market growth. Clothing brands, mostly of foreign origin, are taking advantage of it, enriching their collections with children’s garment. Big luxury names like Burberry, Fendi, Christian Dior SA, Marc Jacobs, Armani Junior, Gucci or Roberto Cavalli, have developed children’s clothing lines, either opening additional stores, or distributing them through famous department stores. At the same time, reasonably priced mass market American and European retailers, such as H&M or GAP are doing similarly well, relying on Asian consumers to drive business growth. All these incredible brands have an enormous impact on children’s clothing consumption.

Parents are ready to spoil their children with the branded wardrobe. Therefore, they consistently create the ever-growing demand for designer clothing. Luxury brands are so powerful within Asian consumers that they account for more than half of the 80 billion US dollars global luxury industry. That states how huge is their passion for luxury brands. The population of only Chinese kids under 16 years old has already exceeded 300 million. With the projected new baby boom in the years 2011-2021, the number may increase to over 400 million. It is projected that Asia-Pacific, encouraged by swiftly escalating markets in China, Korea, India, Thailand, Taiwan and others may deliver the fastest growth rate of 5.3 percent through 2017.

Parents will always spend money on their children. Kids wear is becoming a leading business venture for many designers. Over 100 million US dollars of Burberry’s 2011-2012 revenue came from the sale of children’s wear. That states a fundamental growth of 19% for the category, driven by the Asia-Pacific region alone.

To find inspiration, Asian parents follow fashion blogs on children’s wear. They also visit online forums in order to find out who’s wearing what and where to get it. Asian consumers prefer to choose brands they know for their children. That’s the reason why they go for luxury brands. In addition to that, Asian incomes are rising, and demand grows rapidly. Noteworthy business phenomenon is that Hong Kong has more Gucci and Hermes stores than New York or Paris. According to Frost & Sullivan, a US-based market consultancy, annual per household spending on children’s products just in urban China is expected to reach 1,256 US dollars by the end of 2013, as previously published on China Daily.

Fashion brands are aware of the high profits coming from children’s items. Although less material is used to produce them, the prices are still relatively high. The market is already huge, and still growing. Accordingly, it is necessary for the manufacturers to extend their business into children’s products.

Children are constantly exposed to fashion media, peers’ influence and brands carrying enticing apparel. Designers treat children as adult customers having their own tastes and demands. Therefore, this niche market cannot be undervalued. Considering China’s luxury market growing quickly enough to become the biggest globally by 2014, Indian consumers having three-month waiting lists for hot items, and 94 per cent Tokyo-based women in their 20s who own a Louis Vuitton bag, luxury brands have to target children consumers, and take advantage of a highly profitable niche out there.

In today’s Asia it is universally believed that you are what you wear – person’s identity and self-confidence are determined by the visible brands individual’s body is dressed with. Eye-catching kids products may be the next valuable growth potential for international luxury brands in Asia. Children could become a more lucrative market than their parents, who already tend to purchase prestigious products for their offspring. At the end, Asia is a highly competitive market with over 100 luxury brand companies. This fact speaks for itself.