In the past, cities like Beijing and Shanghai were seen as the ultimate destinations for aspiring clothing brand entrepreneurs. These first-tier cities offered a vibrant retail landscape where both domestic top-tier brands and global fashion icons could be found. Many entrepreneurs believed that to succeed, they had to establish themselves in these urban hubs, often investing heavily to secure a place in the competitive market.
However, reality has shown that for many domestic companies with limited resources, trying to compete in such saturated markets is not a wise move. The competition is fierce, and the costs are high. It’s not just about having a presence—it’s about sustainability. As a result, many successful brands have shifted their focus to second- and third-tier cities, where opportunities are more abundant and less crowded.
Take Seven Wolves, for example. The brand started by establishing a strong presence in smaller cities long before it expanded nationwide. According to Zhou Shaoxiong, chairman of Fujian Septwolves Industrial Co., Ltd., the company began its growth in the 1990s, and only after 1998 did it start gaining national recognition. This strategy allowed them to build a solid foundation before entering bigger markets.
Similarly, Metersbonwe and other well-known brands have also turned their attention toward second- and third-tier cities. These areas offer a better chance for expansion without the overwhelming competition of the first-tier cities. For instance, during the 2008–2009 period, the number of stores in East China dropped significantly, while the West China region saw an increase in retail outlets. This shift clearly indicates that brands are focusing more on building their presence in mid-sized cities.
According to Huang Gui, vice president of Bosideng, expanding into second-tier cities helps strengthen the sales network and directly boosts performance. Additionally, as workers return to coastal cities, they can help drive demand in rural areas, further supporting brand growth.
Despite a decline in sales revenue, Bosideng managed to maintain its gross profit margin thanks to reduced distribution costs from channel adjustments. After the financial crisis, the company became even more committed to expanding into second- and third-tier cities.
The clothing industry has seen a growing brand vacuum in second- and third-tier cities. This gap has been quickly filled by visionary domestic brands like Seven Wolves, Summa, and others, whose success stories are worth noting.
Today, large department stores are no longer the mainstay of retail. Instead, many domestic brands are opening specialty stores in various cities. For local brands that aren’t yet strong enough to compete in first-tier cities, opening stores in popular districts of second-tier cities offers a more cost-effective and strategic approach.
These stores not only help boost sales and brand awareness but also allow companies to conduct more effective marketing campaigns and highlight their unique brand identity. In brand marketing, local brands have learned from international giants. Companies like Semir have adopted similar strategies—outsourcing production and logistics while focusing on design and marketing.
Over the past few years, the reliance on advertising alone has declined. Instead, companies are shifting their focus to brand positioning and design. Some target young people, while others focus on casual business styles. By avoiding brand overlap, the market has grown larger and more diverse.
Local apparel brands have a distinct advantage: they understand the local market and Chinese culture deeply. A great example is Red Bean, which pioneered the concept of creating a mainstream lifestyle in China. It promoted a “new thrift†philosophy—simple, elegant, and not extravagant. Thrift is rooted in Chinese tradition, and through careful research and positioning, Red Bean defined the mainstream lifestyle in China as one that values harmony, optimism, ambition, and frugality. It successfully balanced simplicity with luxury while embedding rich Chinese cultural elements.
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