China Insight: The Chinese Apparel Industry’s Second Growth Curve

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The financial results disclosed recently by some leading Chinese firms could provide some hints as to how the apparel sector needs to innovate to grow.

’s results for the October to December period, released in late February, showed that revenue for the third quarter of fiscal year 2022 was 242.58 billion renminbi , up 10 percent, while net profit was 20.43 billion renminbi , a steep 75 percent decrease. The data showed that shoppers on Alibaba inincreased to 979 million as of Dec. 31 and the target of reaching 1 billion annual active domestic customers by the end of this fiscal year is expected to be completed on schedule.

Though the strong momentum of e-commerce companies in China has been globally recognized, the financial results and strategies of these two leading platforms make it clear that any concerted effort by the established firms would result in only small percentage increases in revenues and that a ceiling on growth would eventually be reached. Finding a new breakthrough point becomes the only way to achieve significant multiples of growth while building a sustainable future.

As a leading firm in cashmere apparel, Erdos adheres to the concept of “full life cycle” and the sustainable development of the entire supply chain, realizing “green” production from raw materials to finished products. By reinventing the traditional manufacturing industry with technology and innovation, Erdos has turned “manufacturing” into “Smart Production,” making it a model for China’s cashmere industry as it seeks to grow globally and add more high-end, eco-friendly products.

At the same time, Lilanz has continued to improve product personalization and design, with about 50 percent of the fabrics used in the Less Is More collection exclusive ones it developed.Xtep, a manufacturer and distributor of its own as well as foreign activewear and lifestyle brands, released its full-year 2021 performances this month, showing record revenues of 10.01 billion renminbi , up by 22.5 percent compared to 2020. This included strong revenue growth for the main Xtep brand, up by 24.

 

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