A new era for China’s $15 billion streetwear market

A new era for China’s $15 billion streetwear market

Shanghai-based influencer Yuwei “Yuyu” Zhangzou has built 3.5 million followers to showcase her signature style of T-shirts, oversized jackets, and an impressive collection of over 100 pairs of sneakers.

She is among a group of Chinese sneaker owners and enthusiasts who have helped push street fashion into the mainstream. The category is now a $15 billion market in China, according to investment bank Citic Securities.

But with the growth and development of the streetwear market, so does the expectations of consumers and the competitive landscape. This creates new pressures and opportunities for brands looking to tap into the huge Chinese market.

“Feeding the hype machine is no longer enough, consumers are looking for a purpose in their consumption,” said Adela Tan, Vice President Asia Pacific and Managing Director at Williamson-Dickie. The group’s traditional workwear brand, Dickies, has been adopted by street fashion enthusiasts in the West, but also more recently in China. This is partly due to changes in the way young consumers think about brands and products, Tan said. She added that Generation Z consumers in China are looking for “a style seen as cool, simple, original and friendly.”

Growing Market

Streetwear made its way to China via hip-hop-influenced K-pop, and its path followed a similar path to Western markets. It has moved from subculture to mainstream culture, reinforced by its impact on well-being and a broader shift to more informal and gender-neutral styles.

The shift has led to rapid growth: Between 2015 and 2020, the amount spent by Chinese consumers on streetwear grew four times more than the amount spent on clothing outside this category, according to a study by market researcher Nielsen and Chinese e-commerce platform OF Fashion.

“The market is completely different now,” said Chris Wang, founder and CEO of Chinese streetwear media platform Nouri. As a leading figure in the local street fashion scene over the past decade, Wang has seen the sector grow from a small subculture to a vast church of men and women, high- and low-end cities, streetwear, sportswear, and luxury brands alike.

“A lot of young children are looking for something new… they want to show their friends flair and style,” he added. 

"It’s more about comfort, cool and upscale."

The influence of streetwear on the luxury sector has been particularly influential in attracting more Chinese women to the scene, Zhangzhou says. She is well known for working with several luxury brands, including Louis Vuitton and Dior. In addition to Nike (Zhangzou is a collector of Air Force 1 sneakers), the streetwear pieces she buys often are from luxury brands, including Louis Vuitton, Balenciaga and Celine, she said.

“for women [in particular] I think it’s more about comfort, cool, and the upscale side. The base is very convenient, but you can also be a very cool and fashionable fashion girl,” she said, adding that almost everyone she knows, even those who would never consider themselves part of any ‘scene’ of street fashion in China, are buying more hoodies and more. of sports shoes.

“These are the only products you need in your wardrobe these days,” she added.

In a sign of the growing influence of street fashion in the broader Chinese market, social media platform Xiaohongshu is sponsoring the January issue of the popular street fashion show Innersect. Streetwear-related content jumped on its platform this year; Xiaohongshu data showed that the average number of daily posts related to “streetwear” increased by 689 percent between January and October 2020 compared to the same period in 2020.

Beyond the noise machine

But as streetwear becomes more and more popular, brands have to work even harder to beat the noise.

There was a time, just a few years ago, when the release of limited-edition sneakers at the Innersect streetwear show was leading local runners and speculators to fight over the best products, but “now the hype drive is really starting to cool off,” David Tang, Brand Director of Inc. Innersect.

Instead, the more discerning consumer is looking for brands that really speak to them, and this opens opportunities for new players, Tang added. “Our VIP customers are turning their attention to smaller brands, to emerging brands. Our customers give us confidence to bring something relatively unknown to the market right now.”

"Now the noise engine is really cool."

Innersect, a three-day festival first held in Shanghai in 2017 and co-founded by Edison Chen (the same group that runs Innersect also has its own street fashion brand, Clot, and a network of multi-brand retail stores across China called Juice ), looking to lead her audience into a world of high street fashion.

As part of this effort, the group is looking to develop its offering to reach a wider community. For the upcoming edition of the show, which has been postponed from December to mid-January due to the tightening of Covid-19 restrictions in China, Innersect has appointed Fear of God founder Jerry Lorenzo as artistic director. The idea is to expand the gallery’s reach into art and culture while introducing and building the influence of brands less established in China. Lorenzo will be curating the artworks that will be part of an independent exhibition within the gallery called Neighborhood.

“Innersect is there to give the bigger picture,” Tang said. “We want to stand up for this mix of streetwear and art… [but we also] We want to establish ourselves as a conductor from east to west. This is the bigger vision.”

Wealth Transformation

While Chinese consumers have embraced street fashion laws, they have dispelled some of the big players in this category.

Adidas and Nike were among the brands that sparked controversy this year, after declaring they would not be sourcing cotton from China’s Xinjiang region as a result of allegations of forced labor that led to international sanctions. In China – where the government has denied the use of forced labor – the stance against Xinjiang cotton is seen by many as anti-China, a view raised by Chinese officials and echoed by influential celebrities.

Both Nike and Adidas, among many other international players, Lost celebrity Chinese spokespersons As a result of the controversy, it has limited their ability to direct online conversations and traffic on Chinese platforms, many of which rely heavily on celebrity content.

“These brands have been relatively quiet in China this year, [and] “This was another factor that dampened the power of the noise engine,” Tang said.

This change also helped boost local brands, which rose in local resale sites.

For example, Li Ning’s Way of Wade sneakers, a collaboration between the local sportswear giant and NBA star Dwyane Wade, soared on resale platform Dewu in April, after the first hit of the controversy. At that time shoes were being sold As much as 48,889 yuan ($7,464), a 31-fold increase from the original price of 1,499 yuan. The site, known as Poizon in English and the platform most associated with street fashion in China, removed dozens of pairs until speculation subsided. Tang said that this craziness represented a level of hype that was previously reserved for international brand collaboration.

Smaller players also appeared. Shenzhen-based Roaring Wild began selling on Taobao in 2010, but has now been tapped to display its collections as part of Shanghai Fashion Week; SMFK is stored in Beijing at the prestigious domestic store Lynn Crawford. And over the summer, Equalizer, a Chinese brand with roots in basketball culture, saw its shower slides go viral on Chinese social media.

“There are a lot of options. In the past five years, a lot of new Chinese brands have appeared,” Wang said.

Many brands are now looking to China’s e-commerce and social media platforms to help navigate rapidly changing consumer tastes by leveraging their data on rising trends and products. This year, Dickies developed a new baseball jacket based on market data provided by Tmall. Tan said the item generated more than $1 million in sales during the Singles Day sales period alone.

Innersect plans to use a new partnership with Xiaohongshu to mine data that will help it identify emerging brands for inclusion in its future shows and store it in Juice retail stores.

“The streetwear sector is moving fast and you must adapt quickly to survive,” Tang said. “If we can make it work, it will really change the rules of the game in the industry.”
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