Not only traditional strong European retailer brands are rushing into China, also players from America and Japan eye on the country’s growing consuming power.
In 2010, the American clothing and footwear retailer Gap Inc., owner of Banana Republic and some other famous brands, moved its first step to enter China with opening four flagship stores both in Beijing and Shanghai within one year. Meanwhile, different from its competitors mainly focused on on-site retailing, Gap started up its online sales website along with the store opening, targeting more than 420 million Internet users in China.
Uniqlo brand, Asia’s largest fast-fashion retailer which entered Chinese apparel market in 2002, also targets China as its first consideration overseas market. According to what the CEO said, the company is planning to open 1,000 stores in China during the next 10 years. It even expects China to grow to be the largest market to do business instead of Japan. Similar with Gap, eyeing on the huge number of Chinese Internet users and their rising consuming capability, Uniqlo opened its online shop in 2009 through a partnership with TAOBAO, a shopping site of Chinese largest e-commerce corporate Alibaba. Specifically, it opened two online stores at the same time, one is Uniqlo’s own website, the other one is set up on TAOBAO. Uniqlo offered approximate 500 items on both sites with weekly mail magazines and sales campaigns to reach a wide range of customers as well as to increase its brand awareness. Fierce competition among the global clothing retailers turned more white-hot. The growth rate of Uniqlo overtook Zara and H&M in China in 2010, showing its strong potential drive to expand through Chinese market.
Why China is becoming a so important battlefield for global fast-fashion retailers? The reason I think should come as No.1 is the China’s rising middle class and their rapid growing consuming power. In fact, international luxury brands have taken Chinese upscale fashion market for a while like Louis Vuitton, Prada, Channel. They enjoyed their success with high profits, targeting up-wealthy class and celebrities in China. However, with more and more consumption from China’s middle class, the fast-fashion apparel market is incredibly booming. By 2010, the market sector reached to about $58 billion or more, with speedy 10% market growth rate every year. That is because besides luxury brands, on the other hand, there are cheap low quality clothes without branding. While, customers are willing to buy chic, fashionable, good-quality clothes with affordable price, which is what fast-fashion apparel market offers to China’s middle class.
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