On December 25, Financial Association reported (by reporter Chen Kang) that "I have returned almost all the clothes I bought online this year, but everything I bought offline is still kept." Consistent with consumer choices, this year apparel brands are refocusing on offline stores.

According to publicly available latest data, brands that have seen an increase in the number of stores this year include Hla Group Corp. (600398.SH) in men's wear, which had a net increase of 252 stores by the end of the third quarter compared to the beginning of the year; Youngor Group (600177.SH) had a net increase of 4 direct stores and an operating area increase of 0.0203 million square meters by the end of the third quarter compared to the beginning of the year; Shenzhen Ellassay Fashion (603808.SH) had a net increase of 6 stores by the end of the third quarter compared to the beginning of the year in women's wear; In the sports brand category, Anta (02020.HK) reported in its interim report an increase of 271 main brand stores and children's stores compared to the same period in 2023, with expectations that, by the end of this year, Anta brand store numbers will rise from 7073 to 7100-7200; LI NING (02331.HK) saw store growth turn from negative to positive compared to last year, with a net increase of 9 stores; Xtep (01368.HK) and 361 DEGREES (01361.HK) had net increases of 7 and 6 stores respectively in the first half of the year.

"There has indeed been a recovery offline this year because online traffic reached a bottleneck in recent years, whether in traditional e-commerce or live stream e-commerce, with offline also being a vital channel to enhance the shopping experience," said Cheng Weixiong, an independent analyst in the fashion industry and founder of Shanghai Liangxi Brand Management Co., Ltd., to Financial Association reporters. "Many brands now pursue mutual traffic between online and offline to achieve an omnichannel experience."

An industry insider also mentioned that through offline channels, brands can build a closer and more stable long-term relationship with consumers, thereby enhancing consumer loyalty to the brand.

Companies originating online have different ambitions for offline stores. In December of this year, Nanji E-Commerce (002127.SZ) opened the first global offline store in Shanghai for its brand Nanji People, intending to shift from the existing private label business to self-operated brands through offline layout.

In contrast, this year's online channels have high return rates for apparel, with the highest return rate reaching 90%. So far this year, dozens of popular online clothing stores have shut down, including the store of Zhang Dayi, who has over 12 million followers. Industry insiders believe that a combination of low stock prices, declining quality, and high return rates has led the online market into brutal competition, and with online gross margins lower than offline, many brands have started to feel disheartened.

However, the overall scale of offline apparel stores has not seen significant growth. GeoQ data shows that in the third quarter of this year, 73 chain apparel brands opened approximately 2653 stores and closed about 2915 stores, with high-tier cities accounting for 57% of the new openings and the new first-tier cities leading with 24%. Among the brands, BOSIDENG (03998.HK) recorded the highest net increase in stores (448), and the total number of hongxingerke stores is about to surpass 10,000.

Overall, the apparel industry has performed modestly this year. According to data from the National Bureau of Statistics, from January to November, retail sales of apparel, shoes, hats, and textiles reached 1.3 trillion yuan, with a year-on-year growth of 0.4%, which is lower than the overall growth rate of retail sales of consumer goods (3.5%).

In a lackluster industry, outdoor and sports brands have performed better than traditional apparel. The outdoor sports sector continues to be viewed as a region of high traffic, just like last year. From a more intuitive perspective, outdoor sports brands have blossomed this year in large shopping malls, with international brands such as Lululemon, Salomon, HOKA, KOLON, DESCENTE, and Mont-bell opening stylish new stores. Even the Swedish outdoor brand Fjällräven, which has not been seen in the public eye for a long time, opened five new stores in the second half of the year.

Meanwhile, domestic brands are also rising to the challenge. The online sales champion, CAMEL, opened eight offline stores within a month in July-August this year, which includes an outdoor sports city over 3,000 square meters, making it the largest physical store for CAMEL to date. Beijing Sanfo Outdoor Products (002780.SZ) has established the first flagship store in East China in Hangzhou; Shanghai Metersbonwe Fashion & Accessories (002269.SZ) has created a brand-new outdoor lifestyle experience hall in its new Shanghai store in December.

Cheng Weixiong believes that the prosperity of outdoor brand store openings is a superficial phenomenon. The outdoor sector has technically entered the second half, and the positioning and layout of brands have already formed, intensifying competition further. "Outdoor was originally a specialized field, and many Chinese brands entering it lack significant technical content. It seems like they are diving into a trendy sector, but the pressure is quite substantial. The current domestic market has extended outdoor into the lifestyle and leisure fields, but I think entering the second half means that the outdoor sector will ultimately return to a professional competitive space."