Why Is It Difficult For Foreign Department Stores And Giordano To Survive In China?

China's retail sales continue to grow at a two digit rate. According to the world clothing and shoe net, China's retail sales in November registered an increase of 10.8%. Despite the rapid expansion of the Chinese market, some international retailers still find it difficult to survive or even survive in the Chinese market.

According to the world clothing shoes and hats net, international brands can no longer rely solely on the Chinese market.

Popularity, including ASOS, Martha stores and Hongkong.

They all experienced setbacks in the Chinese market, because they mistakenly judged the market environment and failed to resonate with Chinese consumers. All three companies declined to comment.

Jason Yu, general manager of the China consumer index, pointed out that in the fashion market, Chinese consumers are becoming more and more picky about brands. Especially when choosing fast fashion brands, their consumption is becoming more and more cautious. With the development of e-commerce, Chinese consumers have a broader view and will not buy a brand product as before.

In April this year, online retailers in China entered in 2013.

Announced to reduce operating costs and terminate its business in China.

ASOS Chinese website Asos.cn will be closed, while Chinese distribution centers and offices in Shanghai will also cease operation, but will continue to serve Chinese consumers through the main website Asos.com.

ASOS is facing great competition in China's electricity supplier market. Alibaba and Jingdong occupy most of the market share of China's electricity supplier market. The infrastructure projects invested by the two companies have extended the development of e-commerce to China's remote areas.

In addition, there are more and more net red in China, and Tmall is using the influence of this group to attract consumers.

Andrea Fenn, founder of Fireworks, a digital consultancy, said that consumers have many choices in the electricity supplier market. It is difficult to grasp the uniqueness of consumers. This is especially suitable for ASOS. Even though they enjoy global reputation, fashion lovers are very fond of their products, but in China, ASOS's attention has no advantage.

ASOS only provides about 6000 products in China's local e-commerce sites. These products can only be stored in the warehouse of ASOS Shanghai after being screened by Chinese agents.

In the future, consumers will be able to browse all the series, including over 80 thousand items.

The Chinese market has been regarded as an important part of the global market by ASOS, but according to the ASOS 2015 fiscal year results report, by the end of August 31, 2015, the total sales volume of the company increased by 18%, the total sales in the UK increased by 28%, and the total sales in the international channel increased by 12%.

Among them, international channel retail sales account for 58% of total sales, and profitability is relatively stable.

However, China's regional business has lost 5 million 200 thousand euros. In the past few years, China's regional business has lost nearly 8 million 600 thousand euros.

Another problem in the Chinese market is Martha's department store. The Department Store announced last month that it closed 10 stores in the international market, including shops in mainland China. The company revealed that its shops in Hongkong were profitable, but 10 shops in mainland China were in a state of loss.

The company said that Chinese consumers can continue to buy their products at Tmall and Jingdong, and the company will do its best to maintain its business in China.

According to the world clothing shoes and hat network, the problem of Martha department store is similar to ASOS, which is not to localize its products. They design products only according to the fashion trend, and do not design products according to the figure of Asians.

Nowadays, Chinese consumers seek other international brands just for some accessories or matching clothes. Most of the international fast fashion brands they buy are still fast fashion brands that have long established their feet in China, such as Zara, H&M and UNIQLO, etc. ASOS and Martha stores lack innovation for the Chinese market, so they gradually lose the attention of Chinese consumers.

Andrea Fenn said that China's retail business is looking for a balance between online and offline. According to the recent retail situation analysis, enterprises can develop better by relying on a small part of offline business and combining online business.

For example, UNIQLO and MUJI products last month's double eleven Shopping Festival was called the best selling brand.

Another international brand facing the dilemma is Hongkong clothing retailer Giordano. Because its first tier city market is completely crowding out by ZARA, H&M and UNIQLO fast fashion, the company says it will focus on China's three and four line cities and Southeast Asian market. This year, the company closed 40% of its direct stores and became more dependent on the development of franchise stores, and opened 31 franchise stores. As of September 30th, Giordano had 904 stores in mainland China.

Giordano chairman and CEO Peter Lau said the company will provide further professional business assistance and marketing resources to dealers. The company will continue to cooperate with the third party platform to invest in brand app in mainland China.

Mark Tanner, founder of Digital Research Institute, said Giordano knew that its competitors in the first tier cities were not able to compete with H&M and Zara. Instead, it turned to less competitive three or four tier cities to seek development opportunities, while franchising reduced their risk to a certain extent.

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