Today, I received an email from a friend of mine from Beijing, announcing his new online start-up La miu (www.lamiu.com) – a China’s Victoria Secret to be. This is at least the second “China’s Victoria Secret” I have heard among my circles of friends. The other one is Herbella (www.herbella.cn) in Shanghai. Who knows how many more are out there?
The message is clear, though, that the consumer market in China is booming. According to a McKinsey report, currently, China’s overall consumer market ranks about equivalent size to Italy. By 2025, China will become the third-largest consumer economy in the world behind the U.S. and Japan (I haven’t worked on the numbers, but it’s hard to believe that China, with its population ten times of Japan, will still be a smaller consumer market than Japan?).
When I was traveling in China, I was totally overwhelmed by the number of consumer products in department stores. Poor Chinese consumers must have been bombarded by too many choices L.
Yiping Zhu, the founder and CEO of Herbella, told me that Chinese consumers didn’t have role models, therefore, were open to try new products and accept new brands. Although most of them didn’t care about brand, more and more people started to have brand awareness. “The challenge is that the Chinese consumer market is very fragmented,” he said, “top 10 brands in lingerie have less then 10 percent of the market share.”
My guess is that China’s consumer market will always be fragmented, at least in the foreseeable future because it’s such a big country with diverse consumers. It’s a challenge as well as an opportunity – there is room for many players. The real potential is in 2nd and 3rd tiers cities. Think about it: China already has 170 cities with more than one million people. By 2025, there will be 221 cities with one more than million inhabitants.
The good thing is that the middle class Chinese have started to pay attention to diet, fitness, and healthy lifestyle. When women start to buy fancy lingerie, they are not just buying sexy bras and underwear, they are also beginning to have a sense well-being and self-respect.