China, as a leading apparel manufacturer and exporter in the world possesses significant market potential for growth because of its growing demand power. Given that low labor costs are increasingly no longer one of the competitive advantages held by Chinese apparel manufacturers, developing powerful and profitable globally recognized apparel brands may be the way to obtain sustainable success for firms in the Chinese apparel industry. Accordingly, Michael Porter’s The Competitive Advantage of Nations (1990) will be applied as a theoretical framework to discuss the competitiveness of a nation’s apparel industry. Brand management, satisfying exacting domestic demands, and stimulating marketing competition will be integrated. Using Porter’s theoretical foundation for demand conditions, a proposed model of fashion sophistication is introduced and a measurement survey utilizing Gen-Y Chinese fashion consumers is assessed. Furthermore, the research on Gen-Y consumers’ fashion sophistication discovered their specialized characteristics which represent exacting domestic demand for apparel products.

China, as a leading apparel manufacturer and exporter in the world possesses significant market potential for growth because of its growing demand power. Given that low labor costs are increasingly no longer one of the competitive advantages held by Chinese apparel manufacturers, developing powerful and profitable globally recognized apparel brands may be the way to obtain sustainable success for firms in the Chinese apparel industry. Accordingly, Michael Porter’s The Competitive Advantage of Nations (1990) will be applied as a theoretical framework to discuss the competitiveness of a nation’s apparel industry. Brand management, satisfying exacting domestic demands, and stimulating marketing competition will be integrated. Using Porter’s theoretical foundation for demand conditions, a proposed model of fashion sophistication is introduced and a measurement survey utilizing Gen-Y Chinese fashion consumers is assessed. Furthermore, the research on Gen-Y consumers’ fashion sophistication discovered their specialized characteristics which represent exacting domestic demand for apparel products.