The distribution in the ready-to-wear sector is highly developed in China but remains very complicated (almost opaque).
And you must be well-known before doing any business with distributors. There are strict rules that cannot be bypassed. Here’s what you need to know about fashion distributors in China.
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This article is reserved for secondary brands not for the leading brands that have funding to finance their own distribution channel.
They are having high expectations toward brands
Chinese fashion distributors will not do business with an unknown seller. They want products that are already famous. They also want the company to have a good online reputation: Chinese people are searching for information on brands, products, etc whenever they want to buy something on the Internet. They seek the opinions of consumers about the products they are about to buy on the internet and especially on Social Medias.
This is why fashion brands must be on these Social Medias, otherwise if a brand is not on the Internet or does not have good e-reputation, they will not buy their products. That is why it is so important to have a good online reputation by doing business with distributors of fashion in China.
Distributors in China have much demand for their suppliers. The brand must have a good positioning, it must offer quality products and good packaging. Products must be convenient for the Chinese people: in fact, many products do not appeal to Chinese because they appeal to consumers elsewhere in the world. The products must be tailored to its customers, and this is very important in China, where the Chinese have many customs and requirements that are not seen in all Western countries, for example.
They won’t invest in their suppliers’ brands
Retailers aim to distribute products, not to invest in the products of their suppliers. While some Western brands invest, the Chinese never will. They are there to do business only, so they will distribute products, but that’s all, regardless of what speech they may have. If the supplier’s brand does not work, they will simply stop doing to work with and seek another. They will find another supplier or another brand, logic, they are there to make a profit while doing their job, sell the products. They don’t want to risk anything by investing in a brand.
If the brand has a positioning unfit for China market, the distributor will be more than reluctant to keep selling the products. They are looking for easy business where they just do what they have to do. Fashion brands that want to do business with distributors must already be appealing to Chinese customers, the distributor does not have to help them to be known or to set up in China.
In short : raise your e-reputation on your own (almost actually…we can do that for you of course 😉 see more there)
Their duty is to distribute products, and they cannot distribute if they are not known. A big distributor knows networks of small retailers, who sell directly in the brand sales points, online or in private circles.
Resellers have a good knowledge of the market, but have no knowledge when it comes to develop marketing or branding to boost trademarks, brands must ensure to have a solid marketing strategy before going to China.
o A brand must have a very good reputation.
=> Use social media, online PR and e-reputation SEO to solve this
o A brand must have a notoriety.
Specialised platform, SEO, Social media are what you need here!
o A brand must have a clear and consistent position on the Chinese market.
SEO can save you on this!
Hermes is a very popular brand in the last 3 years in China, their positioning is clear and different from other luxury brands. The exclusive dimension, is appealing rich people. Their unique products seduced this target. Their communication with celebrities, in the most VIP events, their outlets are unique. This brand is known and recognized by Fashion experts, Luxury and Jet Set…
Fashion accessories, Ready-to-wear, Luxury…So much opportunities.
This market is vast … with a growing revenue of 10% in 2013 and a market estimated at $ 11.8 billion by 2016 (source : PwC) . The locomotive of consumption and distribution whistles in Pacific Asia. China is an emerging country, which means that many wealthy Chinese can now afford things they couldn’t before. The upper middle class is growing, so that people want to have access to high-end brands.
The exponential growth of the giant China should allow it to reach in 2016 the rank of first worldwide distribution market, especially thanks to the development of the middle class. Distributors not only concentrate on the cities of 1st and 2nd ranks, but also address their development in the cities of 3rd and 4th ranks regarding the potential of these cities with untapped markets.
The Boston Consulting Group estimated that by 2020, China’s wealthy class would more than double (280 million people) and ensure 75% growth in luxury goods purchases in the Middle Kingdom. These wealthy people are under a strong social pressure to “affirm their status”, they are eager to be “on top of trends” and develop expensive tastes more and more sophisticated in order to stand out from the crowd. The product categories which should especially benefit from this are Luxury, Ready-to-Wear, Automobile and Cosmetics. On this last segment, France has a very good image.
Brands in clothing and luxury industry have many opportunities in China, and this is why it is important to have a presence there. If a company does not have the financial power to establish itself with its own shops, they must always find a distributor, and work a partnership.
Distributors don’t communicate a lot
This may be surprising, but the Chinese distributors do not communicate that much with their supplier. If something is wrong, they do not necessarily tell their supplier (and they will not tell if all goes well), it’s cultural. And finally, they are not fond of reports, feedback and communication languages problem and escalate issues…
This is why the brands themselves will have to seek feedback as often as they think it is necessary, and install a Control system improvement. Because they think in their profits above all, if something is wrong, the distributors will not take it for them, but will not tell their provider.
Understand your market… and call us to succeed in having a digital marketing strategy with a very good ROI in China!
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