Samjong KPMG: "K-Fashion Growth Stagnates... Response Needed to Competition with China"

Domestic Apparel Retail Sales Reach KRW 86.16 Trillion

Growth Rate Stagnates at 0.8%

"Need for Differentiation in Competition with China"

With the growth of the domestic fashion industry stagnating, the rise of Chinese fashion companies has been cited as one of the key reasons. Amid this competition with Chinese companies, some experts argue that Korean firms should focus on enhancing design capabilities rather than competing on price.

On April 23, Samjong KPMG stated this in their report titled "What Are the Business Trends in the Korean Fashion and Apparel Industry for a New Leap Forward?"

According to the report, as of last year, domestic fashion and apparel retail sales reached KRW 86.1591 trillion, but the annual growth rate was only 0.8%. The growth rate, which stood at 19.8% in the fourth quarter of 2021, fell to negative growth (-2.8%) in the second quarter of last year, indicating a slowdown in the market. Over the past three years, major fashion companies have also experienced stagnant or declining sales growth.

Samjong KPMG analyzed that the domestic fashion industry has now entered a period of restructuring. Among various trends such as accelerated portfolio restructuring and the expansion of direct entry by overseas brands, the growth of Chinese fashion was also identified as a major trend affecting the Korean fashion industry. A representative from Samjong KPMG commented, "C-commerce-based companies such as Temu have secured price and speed competitiveness through data-driven ultra-fast production systems," adding, "Large companies like Anta Sports are strengthening their premium brand strategies, which highlights the need for domestic companies to differentiate their brands as competition intensifies in the mid- to low-priced market segments."

In the report, Samjong KPMG emphasized that in order to win against Chinese competitors, Korean companies must focus on brand identity and design capabilities rather than price. The report also pointed out that strengthening brand competitiveness is essential in response to the expansion of direct entry by global brands.

Han Sangil, Consumer & Retail Industry Leader (Vice President) at Samjong KPMG, said, "As the Korean fashion industry has reached the limits of its conventional growth formula, there is a need to expand overseas by leveraging the influence of K-content and to broaden consumer touchpoints based on platforms." He added, "Strategic flexibility that balances global expansion and internal structural improvements will determine corporate competitiveness in the future."

This content was produced with the assistance of AI translation services.