One of the most important considerations when planning to run retail operations in China is to ensure that your business model is tailored to the China market. Many retailers fail because they try to directly transplant their Western model, which often doesn’t work.
I’ve noticed a recent trend in clothing retailers of downsizing for the China market. My American girlfriend went to H&M
(PINK:HNNMY) last week and her size had gone up from a 2 to a 6, but she had not gained any weight (or gotten any taller). Additionally, while many US retailers are discontinuing their XS and petite sizes due to lack of demand, Gap
(NYSE:GPS) has XXS and even a new XXXS size here in China. According to H&M staff here in Shanghai, the most popular women’s sizes are XS and S.
Overall, Chinese people are smaller than their Western counterparts, so size XXL won’t sell well here. In 2008, Alvanon, an expert global size and fit organization, conducted the most extensive collection of body scan research in China. The research showed that the average Chinese
woman is 5’4” tall and weighs 125 pounds, while the average Chinese man is 5’8” and 145 pounds. These measurements-- as compared to the average American woman who is 5’4” and 155 pounds, and the average American man who 5’9” and 191 pounds-- show a significant difference between Chinese and American buyers. However, height and weight alone do not tell the whole story. Not only are Chinese people smaller on average, but their proportions are also different.
Vanity Sizing Is Nothing New
Vanity sizing is the term for putting smaller size numbers on larger clothes. As Americans (and indeed most Westerners) have gotten larger, retailers have realized that they need to make their clothes a smaller size to attract body-conscious consumers.
The United States had standard sizing in the 1950s, but vanity sizing started playing a role in the '60s and '70s, which lead the US Department of Commerce to end official commercial sizing standards in 1983.
According to research by the Economist
, the average British size 14 pair of women's pants is more than four inches bigger at the waist today than in the 1970s (see chart below), and over three inches wider at the hips. A size 14 today fits like a former size 18, and a size 10 fits like an old size 14. This same vanity sizing is also happening in America where a size 10 is equivalent to a British size 12 or 14, depending on the manufacturer. Take Gap for example. In 2008, a size 14 garment was 37” at the bust, 29” at the waist, and 39” at the hip; today the same size has grown to 37.5”-29.5”-40.”
What It Means for Retailers in China
Retailers must reverse their practice of upsizing in China because of the smaller stature of the population. They can either add additional small sizes like a XXXS, as Gap has done, or they can simply make their size 2 smaller, the way H&M did. Though, if retailers really want to capture the booming China retail market, it would be even better to change the proportions of their clothing as well.
To succeed in China, you’ve got to fit in.
David Hong is foreign legal counsel in Shanghai. He is currently working with CRG, a multi-channel retail services company that assists retailers entering and expanding in China.
No positions in stocks mentioned.