Jan,2014 , helped them to analyse their digital online market base in China and improve their online traffic & social media offering and provided recommended digital online operation strategies
1. ONLINE PRODUCT & OPERATIONAL ANALYSIS
FOR CHINESE MARKET
BY JING HUANG
2. OVERVIEW
High Potential
While the US has the largest and most established e-commerce market in the world,
it's no secret that Asia and, specifically, China, is catching up fast. A MasterCard
survey in November and December found that Chinese internet users shop online
the most. When it comes to fashion retail, the strongest interest comes from China
(54 per cent), followed by Thailand and South Korea. By the end of 2016, China's e-
commerce is predicted to be worth 2.8 trillion yuan (HK$3.5 trillion).
High Complexity
Zara must continue to build brand awareness and acceptance by understanding and
adapting to the complexity of the Chinese market AND recognise the unique
challenges of online retail in China
There are many factors needed to be considered to
achieve a successful operation online
3. Target Market Analysis
- Target Customer Segmentation
- The Main Competitors Product Comparison
- Product Regional Preference
- 2013 F/W Current Season & Key Trend
Online Environments Analysis
- Fashion Online Commerce Orientation
- Brand Competitors Online Operation Comparison
- Other leading Online retail Operation Competitors
- Extra factors to be considered
- ZARA.CN future Improvement Suggestion
4. TARGET MARKET
ANALYSIS
- Target Customer Segmentation
- The Main Competitors Product Comparison
- Product Regional Preference
- 2013 F/W Current Season & Key Trend
5. WHO IS A ZARA GIRL IN CHINA …?
-Age 20-35 Professional Office Lady
-Could be a independent hard working lady or who are able
to afford luxury brands with wealthy family background.
-Understands fashion, has a fashion Sensibility, Has a
request for fashion, fashion Trend Follower
-Has brand consciousness
-Requests “Quality” lifestyle
6. TARGET CUSTOMER SEGMENTATION
Demographic Variables Psychographic/Behavioral Variable
•Well-educated
•Professionalism
•White Collar
•Aged 20-35
•Shopping is a social activity
•Fashion trend pursuer
•Brand consciousness
•Urban/City girl image
•Smart & fashionable look
requirement
Geographic Variables Usage & Benefit Variable
• Physiological differences North &
South
• Climate differences-cold winters in
North, humidity in South
• Region style preference difference
affected by many variables
• Smart casual dress code from day
to night.
• no strict boundary of dress code
required of wear in different
occasions
• Price needs to match quality
7. THE MAIN COMPETITORS PRODUCT COMPARISON
The Brand Design Usefulness Price/Value
(RMB)
Quality Branding Convenience
store presence
Zara
• Catwalk style
Element
• Luxury glamour
Look
• Urban Quality
Smart casual
• Designer
Characterized
cutting
•Smart Work
Cloth
•Daily Life
•Night Out
•Formal Event
•Party
200-2000
Luxurious
quality fabric
High Standard
Cutting &
Tailoring
Special wash
instruction for
Certain Article
VM, Smart
Location,
Posh look
interior,
customer
focus,
Shopping
Experience
157 Stores
(including Kong
Hong and Taiwan
Online Zara.cn
Private purchasing
agency
H&M
• Trend Follower
• Practical Life
style Full range
• Designer
collaboration
• Daily Life
• Night Out
• Sport Casual
• Easy Relax
Home Wear
• 40-1000
• 40-2000
( designer
collaboration)
Standard
tailoring
Low cost fabric
Easy care
Designer
Collaboration
114 Stores
(including Hong
Kong)
Private purchasing
agency
Uniqlo
• Easy leisure
casual, Practical
• Basic design
cutting
• Real Life wear
• Easy Relax
home wear
• Weekend
causal out
• Daily wear Mix
40-1000
Super quality,
High standard
material
Advertising
Quality focus
Viral
Marketing,
The project
Uniqlock
231 Stores
including Hong
Kong and Taiwan)
Online
uniqlo.cn
uniqlo.tmall.com
Topshop
• Cool mix
• Street style
• Individual
designer
• Edginess
• Night Out
• Daily Life
• Party
• Fashionable
casual
50-7500
Standard
tailoring
Low cost fabric
Easy care
Window
Display,
Individual
Designer
Collection,
celebrity
collaboration,
Catwalk
collection
1 Store in Hong
Kong
Private purchasing
agency
8. OTHER COMPETITORS TO LOOK AT
Influential domestic brand are
Metersbonwe
They launched sub-brand Me&City competing with ZARA
http://www.metersbonwe.com/#/app=hot
http://www.me-city.com
E.Land
http://www.elandfashionchina.com/en_index.php
JNBY(江南布衣)
http://www.jnby.com
The brands sharing the market or are used to be on demand
BESTSELLER- (Only, Vero Moda), Forever21, Gap, Etam, Jeanswest, Ebase, Espirit
Other
many local individual fashion boutiques which offer very stylish, high quality product with
friendly negotiable prices.
10. There is a variable cultural focus,
different climate and different
physiology in different regions of
China, which leads to a different style
and product preference orientation.
11. Beijing, The capital of China, the
culture and political center, the
influential city, long cold winter, dry hot
summer, people in North are bigger
build, Tall & curvy figure,
image conscious, high social status
awareness, wealthy and affluent,
stable trends, material quality focus
rather than fashionability.
Shanghai, business and finance
center, more cosmopolitan, distinctive
seasonal weather, smaller figure &
sophisticated, fashion orientated,
fashion appreciation, more style
conscious, fashion leading city, high
demand luxury fashion lifestyle,
frequent trend update requirement
Guangzhou, commercial trade center,,
informal relaxing lifestyle, warm tropical
humid climate through whole year,
smaller build & slim figure
strong Japan & Hong Kong fashion
style influence, bright color
preference, street urban fashion,
extreme & eccentric fashion trend
follower, adventurous, focus on
individual expression, distinct sub-
cultures
Changsha, Wuhan, Chengdu: Central region, Very open mind for
fashion, trend catch-up speed slower than Shanghai
Nanjing, Hangzhou: near Shanghai, gentility & feminine style
Shenzhen: coast city, one of modern business active city , luxury easy
acceptance, trendy, style mixed
12. Symbol Cities Product Buying Selection
Demonstration ( from current season)
according to Regional Customer
Segmentation is following up.
( Remark: Real buying proposal is essentially based on real daily and seasonal sales
figures and finance budget besides market trend and customer demand )
23. The Online Commerce Environment in China
Own Fashion brand E-Commerce is still not mature and popular in China,
people still prefer to experience and try on the article before purchase
especially as shopping is considered as a major social activity in China, but
TAOBAO.COM pleases a very large commercial market because of its full
range of lifestyle products and low price bargains.
TAOBAO.COM took the existing launched TMALL.COM contained many
brands flagship online shop including Gap & Uniqlo. People prefer to shop at
e-marketplaces where many brands are available in one site. TAOBAO.COM
and TMALL.COM dominate the online retail market in China.
Smaller marketplace traders are able to collate brands that fill multiple niche
markets, and respond quickly to changes in demand
24. 3 Key Factors Can lead Online Commerce to Success
Style & Design, Experience and Price are three priority factors with the order which the
target customers looking for, Speed delivery and Convenience are last factors they concern
about. Those factor priority order could be taken as strategy providing consideration ( The
Result From 4 focus group interviews)
Style & Design
Target customers are very keen to express their fashion taste, The products have to present
themselves individually first. The product is king, desirability creates the demand for the
online market above all else.
The Experience
The online experience needs to reflect the ‘social activity’ experience of physical retail. People
want to enjoy the shopping experience with friends as a society activity. However, society is
changing, people have a large online presence, especially through social media sites. Zara
needs to use these resources to replicate the physical social activity online, through
linking with these sites and facilitating social interaction.
Price
A key element, Chinese customers are very aware of value and what else is available for a
similar price. They always seek to avoid paying ‘over the odds’ . The product quality has to be
worth the price. Zara doesn’t have price advantage comparing the other competitors, but
quality guarantee before the delivery can balance the weakness, especially the product
without personal quality checking and longer trading process comparing to offline
shop. It will be save a lot of cost and time of after-selling & return customer service.
25. BRAND COMPETITORS ONLINE
OPERATION COMPARISON
The brand Product
Description
Detailed
fitting
advise
Styling
advise
trend guide
Cross/Link/U
p Selling
Customer
reviews
Selling
quantity
monitor
ZARA
zara.cn
yes none none very weak none none
UNIQLO
Uniqlo.cn
uniqlo.tmail.com
yes detailed detailed yes yes yes
Me & City
(Domestic brand)
Banggo.com
yes yes none none yes yes
H&M
hm.com/cn/
Non-active online
yes none Yes yes none none
Gap
gap.cn
gap.tmall.com
yes Very
detailed
none none yes yes
26. OTHER LEADING ONLINE RETAIL
OPERATION COMPETITORS
Launching ASOS.CN 2014 spring
Multi individual Designer
Collection story
Strong Crossing Selling
Trend editing
Fashion & Lifestyle blog
Net-A-Porter’s sub-brand in China
Discount designers collection
Offer styling advice
Hot piece recommendation
Brand Story
Upselling
29. SOCIAL MEDIA CHANNELS ACTIVE
PERFORMANCE COMPARISION
SEPTEMBER 6TH 2013
The
Brand
Sina
Weibo Renren Douban Youku Wechat Tmall
ZARA 335233
followers activated
7800
followers activated activated
Non-
activated
H&M 524480
followers
Non-
activated
54413
followers activated activated
Non-
activated
UNIQLO 1263135
followers
183490
followers
50k
followers activated activated activated
Reference website http://www.digitalintheround.com/china-uniqlo-hm-zara-forever21/
30. Taking Sina Weibo as a example, the major social
media platform in China for brand’s promotion.
During a one month period in July,2013, Fashionbi
performed an analysis of Uniqlo, H&M, and Zara,
their performances on the social network. That
following slide is a ranking of who’s been the most
active.
Reference website:http://www.digitalintheround.com/china-uniqlo-
hm-zara-forever21/
31. WEIBO ACTIVE PERFORMACE COMPARISON
JULY, 2013
Brands Reposting Comments
Active
follower per
day
average
audience per
Weibo per
day
ZARA 53 68 4 16,099
H&M 3572 2370 206 326,778
UNIQLO 5,337 4,503 302 722,130
33. Sina Weibo is one of the most popular sites in China, in use by well over 30% of
internet users, with a market penetration similar to what Twitter has established in
USA.
Douban.com is a
Chinese SNS website allowing registered users to record information and create
content related to film, books, music, and recent events and activities in Chinese
cities. It is a social platform for age group 20-35 well educated who has own
taste of lifestyle and pursue life quality.
Wechat provides multimedia communication with text messaging, hold-to-talk
voice messaging, broadcast (one-to-many) messaging, photo/video sharing,
location sharing, and contact information exchange. WeChat supports social
networking. It is a handset App for daily frequent communication. None of age
group 20-35 doesn’t use including ZARA target customers.
35. Refresh
ZARA Brand Value+ USP
• Streamlined for efficiency
• Catwalk trend fast translator
• Product focus
• Strong VM window display as publicity tool
• Luxury store experience
• The winner of Fast Fashion
36. THE STRENGTH OF ZARA.CN
•As the branding communication, It is a good reflection of store
brand image Neat, Luxury, modern, smart & easy operation
web design
•Well commercial designed ‘PICTURE’ function well brand value
presented street snapshot, directly leads to product
shopping page
•Brand Core Valued web product presentation, experience
translated online Quality movement photoshoot
•Good return service, It is able to return back to the nearest
offline store, which delivers the brand USP Efficiency.
37. It is important that the brand remains consistent and
continues to deliver the values and promises that customers
expect. Although society is changing because we are now
living in the era of information, digital world brought
tremendous influence to our daily life. E-commerce business
will gradually take over the traditional business operational
model. Online operation should still follow this golden rules
to operate successfully. The improvement is vital not to
ignore Zara own brand value and USP. Reinforcing the brand
value online is the ZARA’s own way to stand out from the
complex challenge and compete with others.
38. AREA FOCUS OF IMPROVEMENT & SUGGESTION
• Extra online commerce operation platform
The competing Challenge ZARA.CN are facing is complicated and multi type of Chanel, offline
and online own brand as well as those market-sharing brands joint website, also those little
individual private boutique business. Joining in or create extra online operation platform can be
considered a smart move with principle of maintaining the brand value and image.
• Improvement focus on 3 key success-leading factors: Style &
Design /Experience/ Price relevant issue: quality
Style & Design is the most priority that ZARA Chinese lady is always looking for. To cooperate
well together with offline business and stock extra best selling article of offline store as
exclusive online treats in order to boost the online traffic.
To create luxury online experience reflected to offline store ( create a online 3D store , the
online shopping experience just like picking up a piece in real store, make target customers
feel when they click the website can have the same feeling of real physical shopping
experience. To create online social activity networking as a unique function to achieve the
fact of shopping with friends in a real life.
Price is always linked the conception of quality. To ensure 100% quality checking before
dispatching.
39. • Online purchasing assistance and service page
To develop better product guide and selection assistance and other area
Detailed fitting advise/ Styling advise/ Trend guide/ Cross, link and up Selling/ Customer
reviews/ Selling quantity monitor
• Social Media (PR & Marketing)
In China, Shopping is a social activity. Online business has the barrier to achieve lifestyle
experience, but Social Media is the essential and valuable tool.
To create a bridge between social media and ZARA.CN online shopping page, make ‘ enter
the link of ZARA.CN ‘ more convenient in social media main page in order to increase online
foot flow.
To highly activate the most efficient social media especially Weibo, Douban and Wechat.
Those social media users are well qualified as ZARA ‘s target customer.
To improve the updating frequency of the lookbook, street style look through social media.
Giving the impression of product focus by online operating.
To deliver the style newsletter, new-in collection and similar purchasing choice initiatively to
existing customer through social media rather than E-mail, eg:Wechat. Make it more efficient
following the concept of brand value.