CHINA MARKET ENTRY
Case Study
A successful fashion house with high brand recognition in the Euro-American context had aspirations to enter the Chinese retail market and eventually expand throughout Asia. However, despite being an established brand in the West, they were unable to access the local knowledge and expertise requisite for such a move, and this threatened the success of their endeavours.
Impact and Advantages
Monrah’s services have led to the business successfully entering the Asian market with a legally compliant and economically scalable e-commerce site which also includes 3PL and local payment solution integration. The business now operates in Taiwan and South Korea and is positioning to enter the Chinese market as well.
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Identifying issues
Monrah’s first task was to analyse the core competencies of the company, pinpointing qualities that would help or hinder their Asian market entry. Although the company possessed a strong brand identity, engaging digital content and the capital to confidently enter the market, an unfamiliarity with Asian retail trends and other external forces threatened their ability to build the brand overseas. Drawing upon our many years of expertise within the Asian economy, Monrah formulated a tailored timeline which would culminate in successful Asian market entry.
Red tape
The Chinese regulatory environment and so-called “red tape” can prove considerable barriers to market entry for foreign businesses. To ensure the company was fully briefed on all legal requirements we devised a thorough, comprehensive and legible plan for them to follow. We were also on hand to offer assistance throughout the entire process.
Assessing the market
The biggest issue facing our client as a foreign company was an understanding of their Asian customer base. To ensure that they had all the information they needed, Monrah documented and analysed the behaviour of local consumers. We found that, as with Western shoppers, the retail shopping experience was carried out mostly online and that “opinion lenders” (e.g., fashion bloggers) were extremely influential.
Monrah also conducted market research to help the fashion house better comprehend their potential competitors in the Asian market, and found that established brands like Liu2 and Me & City were threats to our client’s profitability. Once our client understood this, we were able to draw up ways in which they could distinguish themselves from competitors and gain a loyal customer base. By placing its products in a unique price range and deciding to initially focus on distributing their products solely online, the company was able to minimise external threats to market entry and carve out a distinct niche in the market.
Monrah then organised and accompanied the fashion house on supply visits to China. On these visits our client was able to effectively evaluate suppliers such as Boazun and Li&Fun. Monrah also drew upon our vast network of contacts to provide our client with well-reputed PR partners, distribution centres (3PL), digital agencies and marketplaces.