Mind the gap
Updated: 2015-05-29 11:43
By Matt Hodges(China Daily USA)
Old Navy launched in China in March 2014 amid much American-themed pomp and ceremony at its Shanghai flagship. Provided to China Daily
There are few chinks in Old Navy's China armor but there is a Gap, and it has proven a blessing for its sister brand as Western fast fashion labels ride China's e-commerce boom, Matt Hodges reports.
In February, one month before its first-year anniversary in China, Old Navy served as a sponsor of China's annual New Year's Eve gala, a huge entertainment event that families around the country watch together at the one time of the year when everyone has a vacation. Gap, its trendier sister brand, was also a sponsor.
"It was a promotion where Old Navy gets mentioned and you shake your phone and marketing and campaign messages appear," said Mike Barnes, Old Navy's general manager for Greater China.
"Just in that one night - one shake - we got over 800, 000 shakes of people on WeChat. That's a staggering number when you think that we only have eight stores here." At the time, it only had seven. It is targeting up to 15 by Christmas.
Western apparel and fast-fashion brands have been flooding the Chinese market in the last few years. Many, like Zara, H&M and Gap, have succeeded. Some, like Britain's Marks & Spencer, have erred. A fair chunk accelerated their migration to online sales in the second half of 2014.
Consulting firms like A.T. Kearney predict that China's apparel sector could grow by 15 percent a year until 2020 - spurring a feeding frenzy from foreign brands.
"China today is the second-largest apparel market in the world. In five to 10 years it is believed that China will be bigger than the United States," said Barnes. "That's just a ton of opportunity, and that is why you see all the global competitors coming here."
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