The Mainland China M&S failure should not suggest the same destiny awaits other foreign retail brands.
Commenting on the surprise overnight announcement from the UK-headquartered department store group, Jack Chuang, partner, Greater China, with OC&C Strategy Consultants, says he does not believe other international brands will follow suit.
“There will be two angles to look at it. On the one hand, driven by the booming middle class, the increasing disposable income, the growing sophistication of Chinese consumers, etc, OC&C Strategy Consultants sees increasing demand and therefore opportunities for international brands in China.
“However, on the other hand, the competition is also getting fiercer, with an increasing number of international brands flooding in.”
Chuang says in addition to this, Chinese shoppers are much savvier now than before.
“They now care more and more about the product itself rather than just the brand name or where it comes from. Therefore, international brands need to work harder to cater for the needs of Chinese consumers in order to succeed in China.”
Chuang says M&S seemed unable to adapt itself to the market fast enough.
“For assortment, M&S could have further tailored the apparel products to Chinese body shapes and style preferences. They could have considered adjusting their store format and size in order to capture good locations in malls, which is now the preferred shopping channel by Chinese consumers. Overall, we believe that “localisation” is key to unlocking international markets.”