Market Features in2008

Event:

Intime Lotte, a department store co-founded by the South Korean Lotte Shopping company and China Intime, formally opened on Wangfujing Street, Beijing on August 1, marking the South Korean department store's entry into the Chinese market and is a further sign of cooperation between Chinese department stores and international retail giants.
Covering a total area of 42,900 square meters, the department store targets high-end consumers. With the opening of the store, 201 international fashion brands,  including Gucci, Armani, Cartier, and BOSS, and 76 brands from South Korea (of them, 25 are the first time enter China) are introduced into the store.
 
Besides, according to the representative from the Intime Lotte, in  the coming ten years, it plans to open  nearly 20 stores  in Shanghai , Tianj in, Qingdao,  and others. 

Two months later, Marks&Spencer opened  a  flagship  store on West Nanjing Road, Shanghai's  premier shopping street. The 40,000 square foot store is Marks&Spencer's frst in mainland China and  is  it's  largest in Asia.

In 2008, foreign invested department stores fowered around domestic market, and occupied  the golden business circle in each target cities obviously.

Perspective:

Although the dimension of domestic department  stores have been enlarged and improved signif-cantly, according to the professional investigation,  the living and development  environment  still  is  not  so optimistic. 

Simplified operation and distribution mode,  nearly-same promotion  schedule,  insufficient brand  resource...  various  same-like problems barrier the whole industry.

However, the join of each foreign-capital department store, provide new development and operation mode for domestic shopping malls, which would also give a strike to the retailing industry in China.

Especially  those  top-ends targeted  shopping malls,  being  platforms  for  those  international  high-grade  fashion  brands  entering Chinese market,  they  not  only  share  the opportunities  for  domestic  commercials,  but  also would  affect  domestic fashion brands, resulting in a more ferce market competition obviously.

Maybe, domestic brands would care more about the question of how to survive, rather than how many they could gain.
 
Overseas Market, Domestic Market

Event:

Since the  second  half  year  of  2008, Chinese  apparel  enterprises pay more  attention  to  domestic market,  including  some  foreign  trade enterprises.

Last November, in the wholesale markets in Beijing, cheap clothes flled each floor. One seller  expressed: "It  is  hard  to  do  business  now. As  the foreign  order  declined  sharply  day  by  day,  the  trade  to  overseas market became more  and more  difficult.  For  domestic  producers,  the  storage  is increasing,  leading  to  a  bad  capital  turnover  for  operation,  so  that most manufacturers turn their attention to domestic market with a comparatively lower price."

According to the media report, this kind of situation emerged obviously in some other cities, such as Shanghai, and so on.

Perspective:

RMB appreciation, the soaring cost of labor force and raw material, then suffering  the global financial crisis,  the year 2008 was hard  for Chinese apparel enterprises. According to the statistics, the  loss of textile and apparel  enterprises in China was enlarged in 2008, and the growth margin of export represented a sharp decrease comparing with the same period of the previous year.

Bankruptcy, production  limitation, and so on,  the  situation of the textile and apparel enterprises in  the eastern coast areas, maybe, have never suffered  so many  tough  difficulties.  Facing a weakening  overseas market, several  apparel  enterprises  began  to  focus  on  domestic market  gradually, whereas, enlarging  the  competition  in domestic  apparel  consumption market.

One entrepreneur said: "turn to  the domestic market, will  lead a sharp increase in brands and amount, which would change the competition structure in the past, resulting in more fierce battle in domestic market."

In the  limited domestic  consumption market, how  to  attract more consumption? Most brands and retailing choose the way of "discount and pro-motion. One industrial  expert  said:  "due  to  the  financial  crisis,  consumers began to tighten their wallets. In order to gain more profit and preserve the strength,  for  those  apparel  enterprises, which  used  to  do  foreign  trade  in overseas market, should make more effort to improve the brand, enhancing the brand design, the independently development and research, and so on.

Olympic Marketing

Event:

Billions of people  around  the world watched  on  television  as  Li Ning, the 44-year-old gymnast champion, few hundreds feet-high into the air and light the Olympic cauldron On August 8th, 2008, at that time, Li, also with his sports brand Li Ning, are widely known worldwide, what some advertising insiders  have  described  as  the  greatest  case  of  "ambush marketing"  in Olympic history.

Besides  the highlight at  the opening ceremony,  in  the coming 16 days, the  teams,  supplied  by the  brand  Li Ning,  gained nearly half of  the  total gold medals  gained  by Chinese team.  There is  no  doubt that, Li Ning, as an apparel brand, became  the biggest winner  during  the  shinning Olympic Games. 
 
Perspective:

The  year  of  2008  could  be named  as  an Olympic  year  for China, which means  importantly  to global  as well  as  domestic  sports brands  to  explore Chinese market significantly.

The worldwide attention not only represented  the  promotion  of  the Olympic  economic  operation,  but also, what's more  essentially,  the confidence of Chinese market. 

According  to  the  statistics, as the Olympic Games  successfully held  in Beijing,  the  consumption of sports  goods  in China  have  been stimulated markedly:  the retail sales  reached  80  billion Yuan. And it  is estimated  that,  till 2010, China would  become  the  second  large sports  goods  consumption market, just behind USA.

Moreover, recently, international brands began their  expansion strategy in Chinese 2nd and  3rd tier cities  gradually.  To date, Adidas has  3,000  sales  points  in China, while,  the Reebok,  one  subsidiary company  of  Adidas, owns 550 stores in domestic market .

According to their report ,  the Adidas Group  aims to open  5,000 franchised stores  in China. 

Meanwhile, for domestic brands, to compete with overseas brands with "money strategy" is not really considerable. However, a more competitive market would provide more opportunities for domestic brands to grow up maturely.

Source form China Textile Magazine

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