China Fashion E-commerce Global Growth Report

Compiled by Deloitte jointly with Google

Deloitte China Technology, Media & Telecommunications Industry and Google jointly released the China Fashion E-commerce Global Growth Report. China's e-commerce industry has grown rapidly over the past twenty years. As the industrial chain is increasingly complete, more and more e-commerce enterprises are well positioned to go overseas. DTC (direct to consumer) model is a typical way for e-commerce to go overseas by directing to consumers through self-built internet online sales platforms. As one of the world's largest e-commerce market, the US is the preferred choice for Chinese DTC companies to go overseas. This white paper takes the US market as an example to help China's local DTC companies and e-commerce companies setting to go global have a glimpse of the US DTC market landscape and consumer characteristics. Based on the research on the current situation of China's local DTC companies, the white paper developed in-depth research on a number of leading foreign fashion DTC brands and analysed their best practices around seven dimensions of DTC companies' operations to provide valuable insights. The viewpoints and key findings of this whitepaper include:

1. Expansive global footprint of China's fashion e-commerce business 

  • As there’s a growing trend for China's fashion e-commerce enterprises to go global, more and more Chinese fashion companies are attempting to establish single-site for their brands (i.e. the DTC model) to go global. The United States, as the world's largest economy, has become the most important destination for Chinese fashion e-commerce companies going global due to its strong fashion consumption capacity, large online retail market size, and high Internet penetration rate.

2. The US fashion DTC market landscape and consumer insights

  • Of the products sold by the active online fashion DTC brands, women's clothing accounts for 54%, far higher than the percentage of other categories. In addition to women's clothing, categories including footwear, accessories, underwear, and sports and leisure are also noteworthy.
  • Millennials and Generation Z are becoming the key buying force for the US fashion; Brand values and sustainability concepts influence consumer purchase decisions; Retail is detail; multiple touchpoints impact the occurrence of first purchases and repurchase

3. Decoding Chinese fashion DTC brands' going global

  • Traffic-oriented: new customers attracted by hotsellers and sustainability challenges
  • Product-oriented: brand transformation through investment in the supply chain and independent design
  • Brand-oriented: brand as a catalyst for continued growth

4. Lessons learned: successful experience of overseas fashion DTC enterprises

  • Four core elements of brand building - product, channel, user and supply chain: Products give prolonged life to the brand; Single-site and multi-site modes help expand channels; New customer acquisition and existing user retention facilitate sustainable growth of users, while lean management and ecosystem building of supply chain provide strong support for DTC companies to strengthen growth.
  • Cornerstone of brand building: organizational structure and information systems: With growing personalized demand from users and improving efficiency of information transmission in the Internet age, enterprises could enhance both time and human efficiencies through the control and optimization of organizational structure; Digital information can help improve user experience and operational efficiency of the enterprise.
  • Achieving win-win of corporate and consumer values through brand building: The creation of brands takes root in consumer insights and consumer group positioning, and brand building requires ongoing efforts and penetration into all links of enterprise development. In addition, continuously enrich branding will empower companies to embark on a new journey.

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