As China's consumer spending power reaches new heights, colour is finding its way into the shops and department stores of the cities. With names like Stefanel, Esprit and Nike now luring young shoppers, fashion is making considerable headway among those with money to spend.
One company keen to tap in on this growing interest is Benetton. With a view to being "trendy and affordable", rather than attempting high fashion, the company already has four shops in China and is exploring the possibilities of more.
Benetton Japan initiated studies on the Chinese market in 1985 and the first shop opened in Beijing in 1990, in collaboration with Chinese joint venture partners. Since then a second shop has been opened in the capital, and two more in Shanghai.
Finding joint venture partners that are experienced in the Chinese fashion industry has proved essential to the Italian company. In Beijing, for example, Benetton Japan has teamed up with Mao Tse Tung's original atelier, the Beijing Fashion Company, which has been able to contribute its knowledge of the market, its own production facilities for manufacture of the clothes, as well as information for distribution.
The existing factories then produce a selection of clothes from Benetton's universal range. Instead of attempting unique customised designs, the joint venture selects the items that it feels best suit the market's needs.
"We started with the more basic items that we produce, rather than the more sophisticated," explains Elisabetta Prando of Benetton's public relations department. "By that we mean, the wool sweaters in different colours, trousers, basic jeans, T-shirts and polos, winter coats etc."
Benetton 'determines its prices according to the cost of production, as it does everywhere in the world. Since the clothes are manufactured in existing Chinese factories, costs are inevitably kept low. This has been an essential factor in the company's sales philosophy.
"We think that our products are appealing to the Chinese market because there is a good price/quality ratio," says Prando.
With the Benetton name still "not so well known yet':, advertising is clearly set to play an important role. "We have the same advertising strategy all over the world," says Prando. "We will use the same material, with the budget equivalent to the market share. In China we will be using billboards and the press as we do in other countries."
In the meantime, the shops are living up to the company's expectations ? "we were impressed", says Prando. "I think it is potentially an incredible market."
To take advantage of it, China looks set to see new shops opening up around the country, though no concrete plans have as yet been laid. The flourishing consumer spending power of south China is inevitably going to be alluring. And the company is unphased by any problems that the Chinese system may throw at it. With a presence in 100 countries worldwide, Benetton is bullish about its ability to cope with any eventualities. *
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