As awareness of domestic consumption continues to rise, numerous overseas brands are setting their sights on the vast Chinese market. When foreign fashion brands enter China, how can they ensure sustainable growth through systematic brand enhancement? Here are five crucial steps to follow:
In this article, you’ll learn:
- Transition from Single Offline Channels to Complex Business Networks
- What qualifies as an explosive product?
- Focus on Fashion Brands’ Core Advantages
- Adjust Regional Market Development Strategies
- Focus on Key Product Categories to Break Through
Transition from Single Offline Channels to Complex Business Networks
It is vital for overseas fashion brands to establish a presence in the Chinese market and build a comprehensive online shopping platform matrix. Data reveals that China’s online retail sales in 2022 reached RMB 13.79 trillion, with a year-on-year increase of 4%. Among them, online retail sales of physical goods amounted to RMB 11.96 trillion, marking a 6.2% year-on-year increase and accounting for 27.2% of the total retail sales of consumer goods.
Online shopping platforms essentially serve as expansive shopping centres. Unlike traditional shopping centres that cater to regional consumers, online platforms target the entire national consumer base. Therefore, online platforms only need to label products and identify the relevant consumers for effective promotional campaigns.
In contrast, the offline market presents a more complex competitive environment, requiring brands to excel in various aspects such as channel alignment, visual branding, product precision, retail service features, as well as forging relationships with landlords, channels, and distributors. Brands must standardise their operations and expand their scale to generate strong word-of-mouth effects and allure. However, behind standardisation and scaling lies the challenge of managing the entire backend organisation and remote operations, necessitating a shift in business operators’ mindset.
What qualifies as an explosive product? It should meet three target criteria:
Consumers should have expectations for the product before purchasing.
Consumers should be pleasantly surprised at the time of purchase.
After purchasing, consumers should engage in discussions about the product and recommend it on social media.
However, offline stores rely solely on individual products, which cannot sustain the cumulative effect of standalone operations due to stable regional traffic, high rent, and operational costs. Hence, offline stores value the linkage rate and customer unit price as important factors.
Appropriately leveraging Key Opinion Leaders (KOLs) and Key Opinion Consumers (KOCs) in marketing methods can be advantageous.
Focus on Fashion Brands’ Core Advantages
For emerging foreign fashion brands, the key to consumer purchases lies in idol and celebrity endorsements. When all fans make purchasing decisions, the influence surpasses the product itself. Brands that aim for long-term viability must centre their efforts on their brand spirit and product quality.
Therefore, it is essential to reassess the core needs of Chinese brand consumers, prioritise product development directions, and establish a more distinct and personalised brand DNA before finalising the style. Collaborations with classic IP products and partnerships can further enhance the product’s appeal.
Adjust Regional Market Development Strategies
During the early stages of offline development for emerging foreign fashion brands, inadequate planning for overall market development and entry leads to the extension of customer coverage from northern cities like Harbin to southern ones like Haikou, as well as Shanghai in the east and Xi’an in the west. However, opening stores across such vast distances places enormous pressure on company operations, from product development and ordering to operational logistics. Therefore, adjusting the market development strategy is crucial in the initial stages.
Foreign emerging fashion brands should consider their business goals and strengths, evaluate the development depth and single-store model of core cities, concentrate on those key cities, secure high-quality channels, eliminate low-efficiency stores, and avoid wasting resources on excessive stock. A corresponding plan should also be devised for the personnel structure, allowing sufficient time for the brand to build its offline operations team.
Focus on Key Product Categories to Break Through
Firstly, online testing of incremental product categories should be conducted to gauge consumer acceptance levels. Subsequently, considering enterprise development and operating costs, focus on locking in mature core product categories to reduce development risks.
In summary, “traffic” refers to how many people see our products, while “volume” refers to leaving a lasting impression in consumers’ minds. Traffic can yield short-term dividends, but behind the traffic lies the constant pursuit of trends, and there is no guarantee of keeping up. When the traffic dividend fades, brands need to reflect on what they have left in the market. Shaping volume entails a continuous exploration of our true essence. Only when we have confidence in ourselves and the future can we leave a lasting mark in this consumer market that truly represents our brand.
With the advent of the brand dividend era, we aspire to collaborate with more brands to make their mark in this era and collectively create brand value.
