The sales of high-end lingerie is outpacing China's generally downbeat luxury market and is heating up competition between international brands and local rivals looking to go up market.

 

Several World Lingerie brands eye Chinese market

While U.S. brand Victoria's Secret is set to open its first store in China, Italy's ultra-luxury La Perla and Germany's Triumph are on the course of adding stores and penetrating mainland China to tap a lingerie market that has more than doubled in five years to $18 billion, according to the Mintel Group.

By next year, it is estimated that China's women's underwear market would have a retail value of $25 billion, double than that of the United States and is expected to grow to $33 billion by 2020, according to Euromonitor.

Local firms also vying for attention

Not just foreign firms, Chinese firms such as Beijing Aimer, Maniform and Ordifen are also trying to make their strong presence in the market by targeting affluent customers by raising their quality. Thus, foreign brands will have to be one up on the local ones not just on quality, but also in innovation, observed Matthew Crabbe, director at Mintel.

Fragmented Market

For now, the market is highly fragmented with none of the leading firms having more than around a 3% share. International brands see China as a priority to help bolster their overall sales amidst a fairly bleak global outlook.

La Perla, which sells bras priced around 2,000 yuan ($300), has eight stores in China and plans additional outlets in Chengdu and Chongqing within the year. It also aims to open a men's store in Beijing. “Luxury is … not about buying to show off, it's about buying items that make you feel good,” said Chiara Scaglia, La Perla's Asia chief.

Taking over a prime downtown location that used to house a Louis Vuitton store, Victoria's Secret will open a 20,000 square foot (1,860 square meter) flagship store in Shanghai this year.

Triumph, which already has 1,000 stores in China plans to open in five new cities this year and up to 11 cities next year.

Cosmo Lady, a Chinese firm that has focused on the mass market, selling bras from 50 yuan ($7.50), last year bought Ordifen to increase its presence in the luxury segment.

International brands have admitted that they don't offer products specifically for the Chinese market, though La Perla said that some colours viz red and baby pink sell far better in Asia than in Europe or the United States. The Italian brand has also used Chinese supermodel Liu Wen in its campaigns.

Not to be left behind, Japanese and South Korean brands such as Wacoal and Narue are also growing in popularity in China. But there are bumps in the lingerie market too.

Cosmo Lady, which has 8,600 outlets including Ordifen's 550 China stores, saw a robust growth in its mass market sales last year but warned about its profits for the first half of this year citing China's slowing economic growth, consumer caution and competing online sales.

Hong Kong-listed Embry Holdings, which owns the Embry Form lingerie brand, said that its group retail sales fell by nearly a fifth in April-June on tougher competition and the economy.