NI_ZI Boutique

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NI_ZI Boutique

Sources and Manufacturing

Employment in the textile and clothing industry exceeds more than 10 million individuals as at the year 2013. The clothing and textile industry in China is faced with a number of issues such as lack of collective bargaining and freedom of association which results in overworking and poor working conditions for employees. Key garment producing areas are namely Zhejiang, Jiangsu, Guangdong, Shanghai, Fujan and Shandong. The National Garment Association of China (CNGA) notes that there is an estimated excess of 100,000 clothing and textile manufacturing plants across china such as Well Dyeing Factory, Youngor Textile Complex, Hongdou Group Co. Limited Bosideng Co. Limited and others. Some of the companies are self exporting entities, whereas others involve intermediaries for export. Branded apparel is usually distributed by various department stores and specialty stores. The industry accounted for more than 30% of employment in the manufacturing sector in the year 2009. Private Chinese companies dominate the industry, which is labor intensive with 75% of industry revenue accruable in textile, 59% in footwear and apparel segments.

Date	Total Imports Garments inclusive of textile garments	Total Exports Garments inclusive of textile garments
Per Month (May 2014)	€297.29 million	€10.66 billion/ $13.44 billion
Annual (2013)	€3.91 billion	€130.01 billion / $164.13 billion

Favorable investment conditions such as the presence of an extensive market and significant population, and the availability of skilled and low cost labor and infrastructure renders the Chinese garment industry attractive. Excessive government regulations towards mandatory ventures discourage investments. The main import segments include manmade filaments (13%), cotton (36%), manmade staple fibers (10.2%), animal hair, wool, and fabric and horsehair yarn (9.8%). European Union member states are the 5^th largest sources of textile and apparel imports in China, responsible for 8.3% of the total textile and apparel imports as at 2010.

China is marked by industrial clusters, which is one of the main traits of the textiles and apparels sector. As at the year 2011, the industrial centers involved in the textiles and apparels segment had grown to more than 151 clusters up from 86 in the year 2006. within these localities, a significant number of manufacturers are present. These cluster locations are marked by:

• Excellent infrastructure and transportation systems
• Market proximity; close to cities such as Shanghai and Hong Kong
• Excellent information, technology and transportation services and infrastructure within these areas

The Textile Restructuring and Revitalization Plan dating back to the year 2009 has played a critical role in the promotion of industrial transfers and in the process optimized on regional distribution. The new clusters started to emerge in the middle, western and east coast locations after the implementation of the policy. These provinces have realized significant growth in profit and capital assets than the industry averages.

Products and Prices

Retail

Item	Price
Tops	2550
Shorts	1850
Skirts	2500
Dresses	4000
Coats	3500
Trousers	2000

Wholesale

Item	Price
Tops	1500
Shorts	950
Skirts	1500
Dresses	2000
Trousers	1900
Coats	2100

Distribution Channel and Promotion

The business will preferably utilize retail and online marketing strategies as primary approaches towards accessing consumers. The internet will provide the business with an effective distribution channel as well as a platform for marketing the brand to Chinese and foreign consumers. The business will utilize an online distribution channel given the costs associated with establishment of retail stores. The online channel will enable the business to explore the international market. Advertisement will form the biggest component of the promotion activities of the company. In addition, the utilize of renowned websites such as Taobao, Baidu and Tengxun will enable the company gain the needed publicity amongst Chinese consumers as well as customers in foreign markets.

The online boutique will be able to overcome a number of limitations that are faced by traditional retail outlets in China and around the world. The success of a majority of independent online brands is indicative of the potential for growth in apparel purchases, which will provide number opportunities for the company. The success of the business will be reliant on a number of issues namely:

1. Specified target consumer groups
2. Insights on the nature of the local (Chinese) market

• Effective offline and online market strategies

1. Consistency in customer relationship management (after sales services)
2. An efficient logistics and supply chain function

The use a retail strategy will be effective as a result of a vibrant retail industry in the Chinese textile and apparels industry. Apparel retail is largely carried out in the various wholesale markets around china. Apparel retail is marked by high levels of competition, with fragmentation pin terms of low barriers of entry, high exit and entry rates into the market. The high-end department stores and shopping outlets that have extensive floor space and provide a significant variety of products are preferred over other outlets as they are the main points of access for foreign brands. Boutiques stores featuring different European designer brands have proliferated first tier cities, albeit with limited audience due to the small number of shops and inadequate marketing by these businesses. In addition, highly differentiated commodities as well as location remain critical competitive factors for retail brands and businesses.

Furthermore, the business will utilize sales agents as a means of gaining successful entry into the various department stores, specialty, and counter stores around China. The model is heavily reliant on the existing networks of the sales agents as well as expertise and channel resources to gain successful entry into new markets. The approach is preferable due to the low capital investment, rapid market entry, fast brand localization, and minimal operational risks. On the other hand, the model has a number of limitations such as price mark-up challenges, limited control in pricing and brand and difficulties towards differentiation of poor and good sales agents for the business.

Target Market

The consumers being targeted by the business are tech-savvy individuals, who have an understanding of using new technology preferably online applications. The organization relies heavily on an online presence to ensure that it is able to optimize on its outreach in the Chinese textile and clothing market. It is assumed that the consumers have high levels of disposable incomes given the associated manufacturing and process costs for apparel and garments and ensuring a profitable mark up for the business.

Table 1: China IntelliConsulting Corp.; Access Asia, Online Retailing in China 2011

	Online shoppers	Apparel Purchases online 2008	Per Capital apparel consumption (online)
Guangzhou, Beijing, Shenzhen, and Shanghai,	7.95 million	CNY 8.7 billion (EUR 0.96 billion)	CNY 1,094 (EUR 122)
Tianjin, Dalian, Qingdao, Suzhou, Hangzhou, Wuxi, Nanjing, Foshan, Xiamen and Ningbo,	4 million	CNY 4.6 billion (EUR 0.51 billion)	CNY 1,150 (EUR 128)
Shijiazhuang, Zhengzhou, Changsha and Wuhan	1.45 million	CNY 1.5 billion (EUR 0.17 billion)	CNY 1,034 (EUR 115)
Chongqing,  Xi’an and Chengdu,	2.6 million	CNY 2.3 billion (EUR 0.26 billion)	CNY 885 (EUR 98)

Primary

The primary target consumers are identified by the business as consumers who will presumably provide the business with an opportunity for successful integration into the Chinese market. It is assumed that accessing this group of consumers will be a challenge of the business due to the competitive nature of the retail industry in the Chinese market.

Demographic

• Female consumers aged 25-35 years
• Middle income consumers
• Educated
• Single and married consumers
• Shop at various retail outlets around china

Geographic

• Millennial fashion garments and apparel consumers in mainland china, Taiwan and Hong Kong

Psychological

• Have a high sense for fashion
• Unique and luxurious lifestyles
• Acknowledgement of aesthetic value
• High brand consciousness
• Independent and urban
• Focused on personal image and impression

Secondary

This is a group of consumers who will provide an alternative and second market for the company’s products. They are not the focus of the business, but provide the entity with a means of enhancing its outreach into new segments and enabling enhanced profitability levels.

Geographic

• Consumers in other parts of China, Asian countries and other international markets

Demographic

• Low-income population
• Female consumers over 35 years old and those younger than 18 years old
• Low education or uneducated consumers
• Divorced
• Shop in traditional retail outlets

Psychological

• Non-urban consumers
• Low brand consciousness
• Low focus on personal image and impression
• Common lifestyle
• Poor sense of fashion

 

Works Cited

Dunne, Patrick M, Robert F. Lusch, and James R. Carver. Retailing. Mason, OH: South-Western Cengage Learning, 2011. Print.

Top of Form

Lamb, Charles W, Joseph F. Hair, and Carl D. McDaniel. Essentials of Marketing. Mason, Ohio: South-Western, 2009. Print.

Bottom of Form

McLoughlin, Damien, and David A. Aaker. Strategic Market Management: Global Perspectives. Hoboken, N.J: Wiley, 2010. Print.

Bottom of Form

Meng, Xin. “Labor market outcomes and reforms in China.” The Journal of Economic Perspectives 26.4 (2012): 75-101

Pride, Wouldiam M, O C. Ferrell, Bryan A. Lukas, Outi Nieminen, and Sharon Schembri.Marketing Principles. , 2015. Print.

Top of Form

Rhoads, CJ. The Entrepreneur’s Guide to Running a Business: Strategy and Leadership. , 2014. Internet resource.

Top of Form