Brands chase China's high-end lingerie market
Updated: 2016-07-26 08:45
HONG KONG - High-end lingerie sales are outpacing China's generally downbeat luxury market, and heating up competition between international brands and local rivals looking to go upmarket.
US brand Victoria's Secret will open its first store, and companies including Italy's ultra-luxury La Perla and Germany's Triumph are adding stores and moving beyond China's mega-cities to tap a lingerie market that has more than doubled in five years to $18 billion, according to Mintel Group.
Chinese consumer tastes are maturing, women are more confident about buying for themselves and President Xi Jinping's drive against conspicuous consumption is likely diverting spending from flashy branded bags and accessories to sports and ath-leisure wear and the more discreet lingerie.
"Luxury is ... not about buying to show off, it's about buying items that make you feel good," says Chiara Scaglia, La Perla's Asia chief.
China's women's underwear market is expected to have a retail value of $25 billion by next year - double that of the United States - and will grow to $33 billion by 2020, according to Euromonitor.
Chinese firms such as Beijing Aimer, Maniform and Ordifen are also chasing that money, targeting higher-end customers and raising their quality.
"That means foreign brands will have to out-compete local brands not just on quality, but also innovation," said Matthew Crabbe, director at Mintel.
For now, the market is highly fragmented, with none of the leading firms having more than around a 3 percent share. International brands see China as a priority to help bolster overall sales given 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.
"The perception of the lingerie sector has changed," Scaglia told Reuters. "At the beginning many people we spoke to were confused as to why anybody should spend over $1,000 on panties for something nobody sees."
Victoria's Secret will open a 20,000 square foot (1,860 square meter) flagship store in Shanghai this year, taking over a prime downtown location that used to house a Louis Vuitton store. "I think it will announce our arrival in China in a very significant way, and should be the beginning of an enormous business for us," said Martin Waters, L Brands International President.
Triumph, which already has 1,000 China stores, plans to open in five new cities this year and up to 11 cities next year.