China’s apparel sector: Domestic champions rise, global brands adapt
The 2025 IMD China Company Transformation Indicator (CCTI) rankings highlight three key success factors for leading apparel companies: Business Robustness (BR), Early Innovation Results (EI), and R&D Efforts (RD). Top performers demonstrated financial strength, strong commitment to product innovation, and adaptability to changing consumer needs. However, challenges remain – trading conditions are tough and domestic brands still lag behind global peers in ESG practices, which is a concern, as these are becoming increasingly important to Chinese consumers.
Strong momentum in 2023, which saw total retail sales of the entire Chinese garments, footwear, hats, and textiles sector grow 12.9% year-on-year to RMB 1.4 trillion, signaled a growing consumer enthusiasm for apparel. The sportswear and ‘athleisure’ segment led this 2023 growth, propelled by increasing health consciousness and large-scale sporting events. Government initiatives like the Outdoor Sports Industry Development Plan (2022-2025) have played a crucial role in supporting this trend.
However, this momentum virtually ground to a halt during 2024 amid both external and domestic economic challenges. As sluggish global growth, rising geopolitical tensions, and China’s internal restructuring combined with weak consumer demand and slower income growth, the mass market was hit particularly hard, even as premium segments showed relative resilience.
