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VF Corp eyes China as its 'biggest' market

Company CEO: Strong economic growth, rising middle-income group key to biz

By WANG YING in Shanghai | China Daily | Updated: 2024-05-28 09:34

A North Face store in Shenzhen, Guangdong province, July 14, 2022. [Photo/VCG]

US-based apparel, footwear and accessories company VF Corp will develop China into its biggest market, its top executive said, spurred by the country's strong economic growth, rising middle-income group and higher demand for an active and healthy lifestyle from consumers.

"It (China) has always been important and it's getting more important every day … It is our No 2 market in the world (after the United States) and is the fastest growing," said Bracken Darrell, president and CEO of VF Corp, during an exclusive interview with China Daily.

Operating more than 1,500 mono-brand stores under seven brands, including The North Face, Vans and Timberland, in the country, Darrell said China currently contributes about 10 percent of the company's global business, with a faster pace of growth than that of the rest of the world.

"We'll see one day, I think China will pass," the CEO said.

"I wouldn't give a year … but I think over time it's inevitable with the number of people here, this will become our biggest market in the world."

The confidence, according to Darrell, comes from the China market's promising outlook and its ever-growing middle-income group.

"I think the overall GDP of China is predicted to grow 5 percent this year. And that's already one of the strongest in the world … We are very, very optimistic about the China market for almost all of our brands," said Darrell.

Meanwhile, the number of China's growing middle-income group is believed to surpass that of the US and create a gigantic market for the company, Darrell added.

The number of middle-income earners in China has surpassed 400 million and created hyperscale market demand, wrote Huang Hanquan, president and researcher of the Academy of Macroeconomic Research, a research institute affiliated with the National Development and Reform Commission, in an article for the China Economic Times.

Huang said China's retail sales of consumer goods exceeded 47 trillion yuan ($6.49 trillion) in 2023, making it the world's second-largest, as well as the market with the greatest potential.

"All of our brands are benefiting from the rise of the strong middle-income group and even the upper end, who really expect higher quality and better innovation," said Darrell.

In the meantime, its brands are also benefiting from China's national strategies including promoting active and healthy lifestyles.

According to Darrell, the overall strategy of fast adaptation, and continued investment in technology have advanced the standard of living of people throughout China.

"That definitely benefits a company like us that plays in the apparel and footwear market. We're offering and generating premium experiences for premium prices. And the growing strength of the middle-income group is certainly going to feed our long-term growth," he said.

"I think that effort by the Chinese government, the general trends around the world, those two combined should continue to drive very strong growth in China," Darrell said.

China's outdoor sports industry will reach 3 trillion yuan by 2025, following an action plan to promote outdoor sports facilities and services jointly released by government departments including the NDRC and the General Administration of Sport of China.

Backed by multiple factors including market demand and favorable policies, China's outdoor products industry is projected to grow from 197.1 billion yuan in 2022 to 240 billion yuan in 2025, Xinhuanet reported, citing a report on China's outdoor sports industry.

"I think every indication is that China will continue to encourage people to be outdoors, to be active, to be healthy. It's so aligned with what our company is all about. And so we intend to keep investing here, because I believe that China will continue to be one of the strongest markets in the world partly for that reason," said Darrell.

"Our strategy over the next 3-5 years is to continue to invest. We're going to be investing aggressively in outdoor and active."

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