GAP Has Failed In The Past 5 Years In China. How To Make Up For Missed Lessons?

When you go to Gap recently, you should see white lily with Chang Chen, JJ Lin with Krystal, water source Jing Bairan with Jing Bairan, and two little loli partners for the latest advertising blockbuster. But you may not know that the reason why Gap shot this blockbuster is to celebrate the brand's entry into the Chinese market for five years.

In November 2010, Gap opened 4 entity shops in Beijing and Shanghai, and launched its own power station, officially entering the Chinese market. In the past five years (as of November 25, 2015), the brand named "becoming the world-famous classic American style" has opened 112 brand stores and 22 outlets Gap in China. Coupled with its 11 stores with sister brand Old Navy, the entire Gap Inc group has 145 stores in China, covering 38 cities including Mainland China, Hongkong and Taiwan, and employs more than 3000 employees (including retail headquarters and shop staff).

"In the past 5 years, Gap has been in a start-up stage to a greater extent. Our main focus is on the expansion and expansion of regional, channel and brand awareness." Abinta Malik, senior vice president and general manager of Gap Inc Greater China, summarized the development of Gap in the past five years in an interview with the brand 5th anniversary media.

At least from the absolute quantity of the above data, the expansion of Gap China business in shops and geographical areas is not too slow. But if Gap is compared with other fast fashion brands, the new aura is not enough in many ways.

According to the relevant brand data, the annual growth of UNIQLO and H&M in the past two years can be maintained at 80-100. Zara in recent two years, although the shop speed has slowed down year by year, it is worth mentioning that it developed rapidly in the past two years, and opened a shop for the most year (2011), which has opened 156 stores in China, more than Gap Inc's brand is currently in the total number of stores in China.

And competition market results, though Malik Gap Inc will not disclose the sales data of Greater China separately, but the data provided by the third party agencies and companies show that brand performance is not eye-catching.

From 2012 to 2014, Gap's adult men's and women's clothing accounted for 0.1% of the total market share in China, ranking 48. From the sales data of the "double eleven" Tmall just concluded, Gap ranked the top ten in men's and women's clothing categories, while UNIQLO won the first place in these two categories.

GAP hopes to use children's clothing as an entry to further boost China's business.

"We are very optimistic about the potential of the Chinese market," Malik said. "From a strategic perspective, we also regard China as the most important market segment, which I can see from my direct report to group CEO."

The reason for this is related to the repeated setbacks of Gap global business in the past year: the first quarter profits of Gap Inc in 2015 were lower than analysts' expectations for the first time in 8 years, and its share price plunged 31% in six months. By June, Gap Inc announced that it had closed down 1/4 in its 675 stores in North America and laid off 250 people. In 2015, many executives left the company.

Under the premise that the adult clothing market has no advantages, expanding the Chinese market with children's clothing as the breakthrough point can lighten the development burden of Gap Inc global business to a certain extent. Just, Gap After all, it is not a brand of children's clothing. The good performance of a subdivision is not enough to support the long-term development of an entire brand in China. For Gap, if we want to break through in the Chinese market, we have to think about more ways.

Malik said that Gap will enter the Chinese market later than UNIQLO, H&M and Zara, so that more experience can be learned from it, so that it can expand better. But from another perspective, this also means that Gap has lost the opportunity to enter other fast fashion brands earlier than China, and has no comparative advantage in terms of market share and brand awareness. In addition, in the past two years, China's economy slowed down, and the retail environment was not as good as before. Only in 2010 did Gap enter China's Chinese market.

The greater pressure also comes from Gap's own positioning, which is ambiguous compared with those with obvious advantages, and it is hard to leave the impression that Chinese consumers can't buy.

First of all, cliche, to update the speed and fashion, Gap will be thrown away by Zara and H&M.

The fast and good Zara is famous in the industry for an average of two weeks, and it is well known for the industry. It is a conservative estimate that 15 full series (equivalent to at least 7 Series in spring and summer and autumn and winter) have no problem in a year. The update period is 5 days longer than that of Zara, which is much better than that of Gap in the one or two quarter of. Moreover, H&M has been keen on joint cooperation with designers in the past two years, and every series must be welcomed by fashion enthusiasts. Brand awareness It's all straight up. Obviously, the latest "big name design" and the hottest joint cooperation must be more attractive than the "American style leisure wind".

If you change your competitors into UNIQLO, Gap will lose the price -- the price of two brands, a T-shirt can be several tens to hundreds of dollars. Now, even if Gap has already launched a price reduction promotion at three or five, and has introduced a brand name Old Navy, which is lower than the group, consumers will still prefer to label "cheap and cheap" labels on UNIQLO. This can be seen from Tmall's "double 11" sales results can be seen one or two.

"I think our most important core competitiveness should be our children's clothing." Malik answered the interface reporter's questions.

Judging from market performance, this is true. The China children's wear market report released by Ou Rui consulting in 2015 shows that the share of Gap in the Chinese children's wear market has increased from 0.1% in 2010 to 0.6% in 2014. In 2014, the market share ranked seventh, and it is the only foreign fast fashion brand that has entered the top 10 of the Chinese children's wear market. From Tmall's "double 11" sales performance, Gap performance in children's clothing category has improved from the previous year, from fourth to second.