It isn’t clear whether some U.S. lines will be well-received in China, where consumers favor luxury European brands and logos. The late entrance of U.S. retailers into China means they have to try harder to build brand recognition and loyalty. “It is easy for a Chinese consumer to understand Gucci, ‘It is expensive, so it must be good, and you must be someone if you have it.’ How does a Chinese consumer understand the history and lifestyle that [a U.S. brand] represents?” said Franklin Yao, chief executive of consultants SmithStreet Solutions.
“Building brand recognition in Asia, particularly in China, will be a challenge. J.Crew must compete with dozens of midtier international clothing names already in the market. Pricing is an issue for new brands entering China,” Mr. Yao said, especially with the advent of international shipping from e-commerce sites and the growth of Chinese travelers shopping abroad. “You need a more sophisticated consumer, someone who can make the distinction between spending $150 for a pair of pants compared with $80,” said Torsten Stocker, the head of the consumer group at consulting firm Monitor Group. “These consumers are emerging in China, but it’s not as obvious as it is in markets like Hong Kong or Singapore.”
Many brands succeeding in China are riding on already-established reputations, crafted from brand images which are not easily emulated. Each brand is already playing to its strengths in the Chinese market, and newcomers to the stage shouldn’t be trying to recreate the image of their bigger competitors.
Customers aren’t buying t-shirts to just simply wear, they’re purchasing a part of something they believe in. The people have to believe in the story and the idea behind your brand. Understanding who these people are and how you can reach them, be it through customer profiling or analysis of trade areas, is a key part of truly discovering the strengths to which you can play. Understanding not only what your audience likes, but also why they believe in it, will put you on the right track to gaining the support of the masses. When people get behind that, when you can reach out to the people who want to get behind that, then you’ve got a work in progress.