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Li Youcheng, Chairman of Youngor Group Co., Ltd., once stated: “The most crucial elements in the apparel industry are brand and distribution channels. The core of a valuable and sustainable business lies in the channel.†In this context, we focus on the men’s wear industry. Why limit our observation to men's fashion? Because for nearly two decades, the strategy of brand and channel development has been deeply embedded in this sector. Most men’s brands have a history of simple mass manufacturing, operating under initial brand strategies, challenging distribution channels, and facing various temptations along the way.
This transformation from manufacturer brands to channel-driven brands might seem too broad, but when looking at fast-fashion leaders like ZARA and H&M—brands that have revolutionized the industry with their direct-to-consumer models—or the rise of e-commerce as a new sales route, it becomes clear that "digging and playing" is key to their success. When it comes to channels, it's not just about the distribution network itself. It starts with regional industry clusters. For instance, Jinjiang’s vice president observed an interesting phenomenon: during the early days of reform and opening up, overseas Chinese brought back imitation clothing styles, which sparked a wave of local brand creation. This region gave birth to well-known names like Rimula, Qiong Licensing, Seven Wolves, Jiuhe Wang, and Love, among others.
In Jiangsu and Zhejiang provinces, suit-making dominates, forming a casual men’s wear industry. Through continuous product development campaigns, even within the same regional brand cluster, there is a clear product positioning. For example, Seven Wolves focuses on colorful polo shirts, Qipai emphasizes collared shirts endorsed by Jet Li, Jiuhe Wang claims expertise in western pants, and Jinba specializes in jackets.
Despite these differences, the development paths of each brand tend to be quite similar. They start with wholesale, then shift to faster turnover cycles, establish a general agent system, introduce distributors, develop franchisees, increase direct sales, and optimize dealer channels. The logic behind this path is that compared to international high-end brands entering the Chinese market, domestic brands typically target the mass market, leaving little room for price increases. As a result, raising brand positioning without a corresponding price increase makes endogenous growth difficult. Therefore, expanding through channels to achieve rapid growth becomes a logical choice.
It’s no surprise that many domestic clothing brands are enthusiastic about opening retail stores. Top brands have over 2,000 stores or counters. However, after a period of rapid expansion, financial instability has forced many to reassess. Meanwhile, global fast-fashion giants like ZARA and H&M have also challenged domestic entrepreneurs’ thinking.
ZARA, for example, is known for its large store presence, often opening flagship locations next to luxury brands like Louis Vuitton. Their stores are small in size but rich in variety. A high percentage of these stores are directly operated, ensuring control and profitability. Their success is driven by a strong supply chain and IT system that enables rapid response. The IT system ensures seamless communication between different parts of the supply chain. Each ZARA store has its own point-of-sale system, with receipts varying by country. Store managers monitor sales and place orders for the next week, which are then aggregated online and sent to production in Spain.
The key isn’t just the IT system, but the effective integration of technology with business operations. To stay in sync with trends, ZARA maintains a short lead time—only 15 days from design to shelf, while H&M takes around 20 days. In contrast, domestic brands typically take 90 to 120 days. These differences highlight the importance of speed and efficiency in today’s market.
Some brands have started to rethink their channel strategies. Youngor, for instance, reduced its retail outlets from 5,000 to 2,000, aiming to align with its high-end image. Others, like Seven Wolves, have begun to adopt direct management models, shifting away from franchise-based shops. In the face of rapid response demands, they continue with the model of product display and order placement. Rimula believes that an efficient market reaction mechanism can make this approach highly effective.
There are also positive developments, such as Rio Tinto's custom market acquisition, which aims to combine shop and ground store experiences for fashion-forward consumers. While it’s still early to celebrate these changes, the pioneers in the industry are showing great determination and innovation.