American Apparel "Go Upstream" Into China

American Apparel is a manufacturer of casual wear. At present, they are planning to "go upstream": to set up branches in China, the world's first garment exporting country, to sell "made in Losangeles" clothing.

It is not excessive to say that it is "upstream against the river": in the United States, 1/3 of the clothes in the market come from China, and only 6% of Americans wear it locally.

Recently, American Apparel played a new trick: the company will open stores in China this spring to sell T-shirts, shorts and hat jackets made in Losangeles.

American Apparel is a company that produces casual clothes. It is not excessive to say that it is upstream. In the United States, 1/3 of the clothes in the market come from China, and only 6% of Americans wear it locally.

Who is American Apparel?

American Apparel (AA) is an American brand. It only opened its first store in 2003. Up to now, it has more than 110 stores in the United States and 35 major cities in the world, with sales of 250 million dollars.

In the United States, which imports 96% of its clothing, it does the opposite.

First of all, unlike many brands looking for processing plants in developing countries, they insist on vertical integration in the US.

The AA factory, located in downtown Losangeles, has 3500 workers, the largest single garment factory in the United States today, producing more than 210 thousand T-shirts per day.

Secondly, American Apparel is definitely not a "sweatshop" reminiscent of garment factories. The workers earn 13-15 dollars / hour. Free medical examination and insurance are provided; English teaching courses for non English speaking staff are offered.

In fact, AA's products are very simple, T-Shirts, T-Shirts, underwear and so on, and they are all basic models. It looks very different from Gap, but in recent years it has become one of the most popular brands in the world. Why?

Advertising is another way. Unlike Gap, who invites big stars to shoot commercials, AA's models are amateur, mostly from AA's own company or some consumers. The location of the shooting is chosen in the AA's office area. The hand rule is based on the style of the 70-80's Playboy, which gives people the feeling of being sexy but not distant. It's like your neighbors or your colleagues, friends or classmates.

When promoting a targeted business, AA will not choose mass media when entering a city to open exclusive stores. Instead, it will choose featured magazines for free magazines to advertise or advertise on the local influential Bloger websites.

Shop sales promotion is powerful, although it sells the basic style of the product, but the color and its richness, the shop assistants all have their own style, the boss will interview every shop salesperson, no style, no hiring.

"Bold" business strategy

Bringing the T-shirts from Losangeles to Beijing, Shanghai and Suzhou is in line with the company's business plan.

In the past ten years, the company has won a good reputation for casual wear in department store street, Losangeles.

At the top of the corporate building, the factory signs were written in red letters: "American Apparel is an industrial revolution."

Dov Charney, chief executive, said that the supply chain of a single country is more efficient and cheaper than the multiple supply chains adopted by many other companies, because imports from a group of countries are laborious and laborious.

"So," he said, "" made in America "is a competitive advantage.

The price paid by the company to salesmen in China's stores is higher than the US minimum wage of 5.85 dollars, which is higher than that of workers in some parts of China.

"In American Apparel, employees' salaries will never be lower than the minimum wage in the United States."

He said, "in order to find a clean and decent employee, we must be willing to pay.

We will recruit employees of American Apparel, hoping that they will become a member of the family. "

Cai Yanchao, a hot saleswoman in downtown Shanghai, plans to increase her hourly wage to 5.85 dollars.

"This is very important to me."

The 19 year old girl earned 214 dollars a month, including commission and company catering.

She has never heard of American clothes, and also Mr. Zheng, a communications professional who works in a branch of Bank of America in Shanghai.

"I only know that Tommy and Polo are American brands, right?"

Zheng said he earned $3000 a month, and the average costumes cost about 286 to 429 dollars.

"If it's my favorite style, I'll go and see it when it opens."

Mr. Cheng said.

Attracting young audiences with rustic style

No one can guarantee that Chinese people will prefer simple, plain and unbranded American clothing compared to the more luxurious brands such as Louis Weedon and LV and GUCCI, and the low-priced brands such as H&M and Zara, which are fashionable in fashion. No one can guarantee that the Chinese people will prefer the simple, plain and unbranded American dress. "Gucci"

He acknowledged the challenge.

"American clothing sells plain but well-designed clothing, and luxury brands are somewhat bourgeois and upstart style."

He said, "but young people prefer Audi instead of Bentley, so maybe it can do it."

It is also uncertain whether the dubious marketing of the company involved is suitable for China.

"They will definitely need local marketing consultants and be cautious," Doug Hart commented as a partner in the professional consulting service of the Department of retailing and consumer goods in the Doug Hart market.

"In China, the operation of many business regulations is more local."