ONLINE APPAREL- CHINA

1. ONLINE APPAREL- CHINA E-commerce Shopper Insights October 2013 ISABEL CAVILL Senior Analyst - Apparel

2. Introduction & Key Findings Setting the Scene Inhibitors & Drivers of Online Apparel Shopping Charts & Data Tables Methodology Contents

3. E-commerce and apparel • 1. Introduction & Key Findings • Ten years ago, buying apparel online was in an early stage of growth. The need to touch and feel before buying was seen as a key barrier to this category. A decade later and apparel is now one of the most bought categories online with some pure play apparel retailers producing double digit growth year-on-year. • As part of Planet Retail’s shopper research, we surveyed almost 15,000 shoppers in 10 key e-commerce markets to not only find out about levels of spend on apparel online but to get a clear understanding of what the barriers to buying apparel online are, how these barriers can be overcome and what influences purchasing decisions and encourages spend online. • In China, we surveyed 1,371 purchasers who shopped online over sixmonths in 2012. Out of these, 1,227 had shopped apparel at least once online over the period. How do shoppers buy apparel and where will they shop in the future? What are consumer views on buying apparel online and what are they buying? How are retailers responding to key influencers on apparel shopping behaviour?

4. Encouraging online apparel shopping Top 3 categories bought online* 0.9 71% ¥118.50 56% • Key Findings: Online Apparel Shopping in China • 2. Key Findings • 1. Introduction & Key Findings 67% Comprehensive size guide Use a virtual fitting room Average times per month is purchased online 67% 53% 51% Average monthly spend on apparel online* Quickly and easily filter products Discouraging online apparel shopping  73% 71% 55% Concerned website is not true reflection of the product Concerned that products won’t fit Concerned about the quality of buying online * Base: 990past six-month online purchasers who have purchased apparel online.  Base: 1,371 past six-month online purchasers; percentage of respondents who answered 8, 9, or 10 on a scale of 0-10 where 0 = not at all important and 10 = extremely important to a series of statements about shopping online.   Base: 1,371past six-month online purchasers; percentage of those respondents who answered 1 or 2 on a scale of 1-5 where 1 = agreed strongly and 5 = disagreed strongly to a series of statements about shopping online.

5. Key Findings of China Online apparel Shopping • 2. Key Findings • In China, apparel purchases represent the second largest online category in value terms and the most popular category among consumers who have bought online over six months. • Young women represent the largest market for online apparel in China being both fashion conscious and technologically astute although it is females aged 35-54 that spend the most on the category online. • Concerns about product representation and fit are key barriers to online apparel shopping, particularly among younger women and across the board among male shoppers. Retailers have aimed to offset this through detailed product representation on websites. • Over half of female online purchasers look at apparel instore before they buy highlighting the importance of physical stores to the Chinese consumer. • Value is one of the most important aspects of the online shopping experience among online apparel purchasers and as a result, luxury is a longer term investment. • Over three quarters of online apparel purchasers see reviews as integral to online shopping. Subsequently, nearly half of them have written a review online. • Concerns about postage costs are less of an issue in China because shoppers expect free delivery and returns. However, this may have an impact on retailers in the future as they may increasingly ship to less accessible parts of the country. • 1. Introduction & Key Findings