VANCL: Problem
Within the period of 2007 to 2009, two major retail companies emerged in China: PPG Apparel (Shanghai) Co., Ltd. and VANCL Technology (Beijing) Co., Ltd. Though both had similar business models, VANCL was able to excel and profit in places where PPG Apparel suffered tremendously. These included creating a successful supply chain with effective quality control, adopting a variety of improvement measures to ensure a positive customer experience, and shifting most of VANCL’s advertising dollars towards internet marketing. Though successful when first established, PPG eventually collapsed in late 2009 due to their inefficiencies in such areas. Owner of VANCL, Chen Nian stated that VANCL has passed its most risky period
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Market Analysis: VANCL is a leading Chinese internet-based apparel retailer that has successfully established dominance in the e-tailing world. Their approach to elevating the customer experience includes improvement measures such as online commenting threads and try-on activities. VANCL’s services have helped them diminish any skepticisms the Chinese market had in regards to shopping online. Known for its “fast fashion”, they have expanded their market range to include most kinds of men’s and women’s apparel, specifically casual-wear such as canvas shoes and graphic tees. In China alone they have captured over 25% of market share in the apparel market and are the 6th largest B2C company in China in terms of revenue. VANCL’s channels of distribution are exclusively their online website as well as their small call-center. Because they are only an online retailer, VANCL uses their own logistics company, Rufengda, and other third party companies to ensure speedy delivery of their products. Their apparel is made from top fabric manufacturers such as Luthai Textile and go through countless quality checks to ensure the best apparel for their customers. In China alone the market for apparel including clothing, shoes, hats, and textiles has grown by a staggering 18.8% in 2009 according to the
Philips-Van Heusen (PVH) is Polo Ralph Lauren’s another big competitor with a market cap of $4.6 billion. The company is headquartered just a few blocks away from Polo Ralph Lauren and operates in a similar fashion. Its portfolio of brands includes the well-recognized Calvin Klein collections, Van Heusen, and IZOD. It also has a huge portfolio of licensed brands including Donald J. Trump Signature Collection, Kenneth Cole New York, Michael Kors, DKNY, Tommy Hilfiger, Nautica, and Timberland.1 The company’s revenue is more relied on its licensed brands, which is a bit different from the other three companies.
Another social factor is demographics. As Lululemon products are highly prices, it is important to research the social economic aspects of the neighborhood. Moreover, Lululemon faces high rates of obesity and overweight in America and Australia, hence the importance for well-trained “educators.” As Lululemon incorporated e-commerce in 2009, a technological as well as an external factor is to ensure customer service provides the same level of customer services as the face-to-face interaction in the stores, and to maintain the website up-to date. It is important for Lululemon to maintain a user friendly website that would encourage people from all ages to buy Lululemon’s products.
Although the Chinese apparel manufacturers would lose profitability due to rising cotton prices and competition from emerging countries, they stand to gain the most from the removal of U.S. quotas and tariffs. According to the author, in 2007, 95% of the 20 billion garments Americans made were purchased overseas. Due to U.S. trade barriers, China’s share of the U.S. apparel import was only 30%. Once these barriers were removed, Chinese apparel would flood the American market due to their low cost and dominance in garment manufacturing. Experts predict that China could eventually supply 85% of U.S. apparel. As they increase their market share in the
For the open genre assignment, While try to find a hostile target audience two demographics was always appearing. First, being Millennials and the second one being Generation X. It was then when I decided to format my
Asos’ has widely selection of products that are considered to be consumer products, classified as shopping products, due to their higher prices, selective distribution, less frequent purchases and more shopping effort. Their core product is the purchase of esteem as well as respect and recognition , in forms of clothing in a wide variety in an online hub, right at your fingertips. This makes them gain brand equity in form of differentiation, as Asos has the largest product assortment of different brands online . Asos also does a great job by gaining brand equity by offering relevant services in their augmented product and service mix in form of free
In late 2002, Calvin Klein, Inc. caught the eye of Phillips-Van Heusen Corporation (PVH), a company looking to acquire a major brand. As the largest shirt maker in the United States, PVH owned the Van Heusen, IZOD, and G.H Bass brands and had licensing agreements with Geoffrey Beene, Arrow, DKNY, and Kenneth Cole. Under the leadership of CEO Bruce Klatsky, PVH made a play for Calvin Klein and eventually won the battle. Under the terms of the deal, Klein
According to Turban and King (2003), internet technology renders retailers an additional channel for branding, transactions and customer relationship management, the adaptation of which may drive down retailers’ transaction costs, and ensuring faster and higher quality of customer interactions, resulting in enlarging the existing markets and consumer base. M&S realizes this and have tried to sell clothing via high street stores as well as via internet though they have experienced cost cutting, rationalisation and management changes in order to revive their business in recent years. Internet technology might enable sustainable competitive advantage, but problems remain on how to physically organize their online retail operations.
2. Richard M. Johns (2006). The Apparel Industry. 2nd ed. UK, London: Blackwell Publishing Ltd.. 1-124.
The bargaining power of customers is high. First of all, the customer size is tremendous globally, which also has an accelerating growth rate in recent years. Customers’ leverage is strengthening as a result of this. Another inevitable factor is that with countless retailors online, there is low switching cost for customers to find other alternative companies that suits their desire to conduct purchases. Moreover, consumers today are more sophisticated. Consumers are less commit to impulsive-buying, yet are more willing to study about product features and evaluate their options before purchasing online. Their purchase pattern can also be hard to learn too.
According to the data, the total volume of textiles exported from China has started a continuous rapid growth since 2001 (the year of China’s accession to the WTO) as shown in the first graph above, which roughly
related items that are similar to designer fashion worn by celebrities but a t a
VF Corporation is an American apparel and footwear company, with worldwide presence in over 170 countries. Currently, VF Corporation has more than thirty iconic brands that are categorized into 5 platforms within the corporate portfolio. These platforms range from outdoor sports wear to contemporary brands, and platforms in between. VF Corporation boasts that they are “highly diversified across brands, products, distribution channels and geographies” (VF Corporation, 2016). They currently are known as being “the industry’s most efficient and complex supply chain, which spans multiple geographies, product categories and distribution channels (VF Corporation, 2017).
The data also show that most clothing, shoes, toys, handicrafts are mostly produced from developing countries, mainly in Asian area, such as China, Vietnam and Indonesia. These
The report then delivers an audit of the Chinese market including size, consumer behaviour, distribution and transport channels, promotional mechanisms and pricing arrangements. Major competing firms are analysed and their marketing tactics are discussed.
Travel agencies, newspapers and telecommunication providers have all suffered severe competition from internet- based substitutes (Grant, 1991). However, in-store apparel shopping is less substitutable by online shopping. On the one hand, it is a product of high risk; on the other hand, the apparel shopping trips to the city center can be more enjoyable.