Online Clothing Market in China on its Way to Becoming Largest in World

The popularity of the online clothing market is continually growing, with more people making a greater number of purchases over the internet, whether for convenience, price, breadth of selection, or other factors. While shopping for apparel over the internet presents some unique challenges compared to other product categories, it too is becoming more popular, and e-tailers are looking for new ways to improve the experience for their customers.


China is one market that is embracing online shopping enthusiastically. While there was some concern that its growth might slow or stop, the market is now expected to more than double in size over the next several years, according to a recent study by Goldman Sachs. China’s online retail market is already the largest in the world, and is expected to grow from $750 billion in 2016 to $1.7 trillion by 2020. The number of online shoppers will also increase by 200 million from 2016’s total of 460 million.


Online textile sales are also thriving. Apparel, footwear, and accessories make up almost a quarter of e-commerce sales in China, and the online apparel category is expected to grow at an annual average rate of 20% through 2020. Goldman estimates that the online apparel market will reach RMB 2 trillion in terms of volume by 2020, with online retailer Alibaba holding 70% of the market.


Cross-border online shopping is one of the trends helping to drive the market in China. It has become increasingly popular over the last few years, growing by over 70% in 2015. Research firm eMarketer expects that a quarter of the population will be making purchases from foreign retailers by 2020, in part because of an improving standard of living in the country and greater exposure to products from other regions.


Millennials in China are also beginning to explore the online second-hand market. While used goods have traditionally been seen as inferior in Chinese culture, this view is beginning to change. Xianyu, an online platform for selling used goods is finding considerable success. Its number of transactions has grown almost 16 times since 2014, with its parent company Alibaba investing millions of dollars in it. Other online sites are springing up as well, and growing quickly.


While brick-and-mortar stores are still the most popular way for consumers in Asia to buy their clothing, a December 2016 study by YouGov found that nearly half of respondents shopped for clothes and accessories online in the past year. In China, that number rose to 75%. Mobile retail is also popular, with 18% of Chinese consumers using an app to purchase apparel. China is already competing with the US for the title of largest online clothing market, and is expected to surpass the country by 2025.


Despite challenges such as the difficulty of finding clothes that fit without trying them on, and the resulting high volume of returns, the online apparel market is clearly going strong in China. And as technology such as augmented reality becomes more accessible and widely used, it will become easier to overcome these issues. With so many people already making purchases online, the market will flourish over the next several years.


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