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Looking for ways to revive his struggling fashion company, Zhou Chengjian, the founder of a well-known apparel brand, recently took the spotlight in an unexpected way. During a live stream on Douyin, China’s version of TikTok, he joined a trendy group dance that captivated viewers. Over 200,000 viewers tuned in simultaneously to see the 60-year-old entrepreneur showcase his dance moves.
Since returning as chairman in January 2024, Zhou has been exploring various strategies, including asset sales, to breathe new life into the business. He previously handed the reins to his daughter, Hu Jiajia, in 2016. However, over the past eight years, the Shanghai-based company accumulated losses exceeding CNY 3.3 billion (around USD 463 million).
The company’s financial situation remains challenging. In the first half of the year, net profit plummeted by 87.1% compared to the previous year, reaching just CNY 9.9 million (about USD 1.4 million). Revenue also declined sharply, down 45.2%, to CNY 227 million (roughly USD 31.8 million), according to the latest financial report.
Cash flow issues persist as well. As of June 30, the company’s cash reserves stood at CNY 62.1 million (approximately USD 8.7 million), while short-term debt amounted to CNY 983 million (around USD 138 million). The casual wear market remains highly competitive, and both domestic and international brands must intensify their efforts to attract customers amid increasing market segmentation, the company noted.
Emerging Challenges
In the early 2000s, foreign fast-fashion brands like Uniqlo, Zara, and H&M quickly gained traction in China. Simultaneously, e-commerce took off, giving consumers more shopping options. Online clothing sales soared from just 0.4% of total garment sales in 2010 to 36.6% in 2020, based on data from the Qianzhan Industry Research Institute.
This shift heavily impacted local brands such as Zhou’s company, which traditionally relied on brick-and-mortar stores in malls and prime shopping streets. Their reliance on offline sales proved to be a significant challenge amid the rise of online shopping.
A source from the consumer goods industry explained, “Brands like ours, which grew up with consumers in their 30s and 40s, now face a new generation—Gen Z—who seek something different. Young consumers view fast fashion brands as more than just clothing—they’re a way to express identity. These brands need to connect with the youth to stay relevant.”
Strategies for Change
In response, the founding families of various Chinese consumer brands are experimenting with social media and livestreaming to appeal to younger audiences. Some entrepreneurs, like Luo Cheng, the son of the founder of a bakery chain, have gained online popularity with short videos—Luo’s “awkward trust-fund baby” series is a notable example. Similarly, Shi Zhancheng, son of the chair of a home textile company, became well-known on Douyin for comedy sketches and short dramas, such as “The Boss Sanctioned by Post-00s Employees” and “Towel Empire.”
Whether Zhou and his company can leverage the internet and current trends to reinvent themselves remains uncertain.
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