Slowing growth, rising costs impact sales
Apparel brands endured a perfect storm of negative influences including: slower economic growth, increasing international competition, rising costs for labor and raw materials and excess inventory, a lingering symbol of more optimistic times. Results suffered. Many apparel brands, such as Metersbonwe and Semir, invested heavily in marketing campaigns and promotions. However, they failed to effectively differentiate. Foreign fast fashion brands, with more sophisticated product development, gained competitive advantage in higher tier cities. And as foreign fashion brands expanded to lower tier cities, they impacted Chinese brands that have a lower tier emphasis, such as Septwolves and Younger.
Meanwhile, e-commerce continued to grow because it provides consumers with wider and more economical options. Also, a physical distribution network remained vital. Belle, a newcomer to the Brand Z™ Top 100 Most Valuable Chinese Brands, succeeded in part because of its strong distribution network. In a comparison of the same apparel brands ranked in the 2014 BrandZ™ Top 100 and the 2013 BrandZ™ Top 50, the apparel category declines 47 percent in value.