China’s apparel industry faced numerous challenges in 2023. A slowdown in global economy, decreasing demand, trade wars put pressure on the clothing sector. And even in 2024 the challenges remain. 

Statistical overview

As per Global Data, China’s apparel market size is CNY 2.89 trillion projected to grow at a CAGR of over 9 per cent from 2023-27. National Bureau of Statistics reveals apparel production of enterprises above designated size declined by 8.69 per cent year-on-year in 2023. At the same time, Domestic retail sales of apparel above designated size grew by 15.4 per cent year-on-year in.

As per China Customs, apparel exports were $159.14 billion, down 7.8 per cent year-on-year. The National Bureau of Statistics reveal investment in fixed assets decreased by 2.2 per cent compared to 2022. Total profit of apparel enterprises above designated size was CNY 61.38 billion, down 3.39 per cent year-on-year.

Challenges in moving ahead

One major challenge was weakening global demand due to a slowdown in major markets and rising competition from Southeast Asia threatening exports. Geopolitical tension was another hitch as trade protectionism and global instability create uncertainty. Also, high inflation and interest rates in developed economies limited consumer spending.

Domestic market a big opportunity

Economic stabilization and consumption recovery presented a strong domestic market. Government policies too promoted consumption and rising domestic incomes presented good opportunities to explore second-tier cities and emerging consumer groups.

Then the focus shifted to emerging markets which have the potential for faster growth in apparel demand also cross-border ecommerce was another lure. Growth in sportswear, Chinese fashion, and sustainability trends too offered new opportunities. This was also the time to move towards high-end, smart, and sustainable clothing. This was also the right time for digital transformation which involved upgrading manufacturing with intelligent equipment and supply chain optimization.

What 2024 beholds

In the international market there is potential for stable exports due to rising inventory demand in developed countries, growth in emerging markets, and cross-border e-commerce. However, challenges remain with trade protectionism and geopolitical risks; lagged effects of tightening monetary policy in major economies; increased competition from Southeast Asia and South Asia; potential appreciation of the RMB

However, the domestic market is expected to continue recovering due to favourable government policies promoting consumption; stable employment and rising incomes; new urbanization and rural revitalization strategies; rise of new consumer groups and trends.

Moving ahead apparel enterprises need to adapt to the evolving landscape by focusing on innovation, developing high-end, smart, and sustainable products. Building brand and channel strength. Expanding brand marketing and exploring new sales channels like e-commerce. Optimizing supply chains by improving efficiency and agility to meet changing demands. Targeting new markets and capitalizing on opportunities in emerging markets and catering to new consumer trends.