profit

To successfully run a company, the core of the business is profitability. A “handsome” cash flow and unique design of the products will be the brightness of the competition’s ability. This blog will introduce the size and the various sectors’ performance of the fashion industry first, then conduct the mainstream competitiveness in the economic cycle, and the connections between the creative and the commercial.

According to the Statista Database, the total revenue of the global market was around 1.52 trillion USD in 2022, which has slightly declined from the last year. The majority of the apparel retail market is in China, the US, the UK, Germany and Japan. The China and the US play a significant role of the global clothing market, that is, China is the largest clothing exporter, and the US is the most substantial importer of the world. The following is the worldwide apparel and footwear market size and yoy growth rate (Mckinsey annual forecast report, 2022)

LVMH Group occupies the largest capitalization of the clothing industry around the world, which is around 367 billion USD. Nike with a market cap of 216 billion USD ranked in second place, and was claimed as the most valuable brand of sportswear for the seventh year in 2021. Besides, the brand value of the leading 10 most valuable luxury brands worldwide in 2022 as follow. The LVHM group leading the top position in both the clothing industry and the luxury.

In recent years, there have been changes in consumer preferences – coupled with brands actively catering to consumer needs – and a new paradigm in the luxury goods industry has gradually emerged. In addition to emphasizing traditional features such as authenticity, reliability, and excellence, new elements such as functionality, integrity, sustainability, and innovation have also been added to the program. Given the emergence of this new paradigm, taking luxury brands as an example, the following points need to be noted:

1) Targeting mega cities and expanding to emerging cities

2) Respect local culture

3) Pursuing a sense of mission (creating products that can leverage social currency functionality)

4) Creating a digital shopping experience

5) Utilize the growth trend of Generation Z

6) Understand the needs of emerging consumer profiles.

For large luxury brands and influential market brands, the main profit margin lies in the brand’s influence, which is the logo. Thus, the creative directors of such brands have less influence on their products than the logo itself. But many luxury brands set limits on high-end products with showcases or private customization and sell them to VIP customers with purchasing qualifications. Classic models are sold to ordinary customers, and luxury brands are different from other brands, with rarity as their main selling point. There are many designer brands now, and these clothing are generally niche, unique, but expensive. Its main selling point lies in the uniqueness of the design.