The world looked with surprise when Nanjing dress-maker V-Grass Fashion bought South-Korean Teenie Weenie for double its own market value. But moving ahead in such a drastic way, seems to be the only way forward for China´s fragmented apparel market, tells retail analyst Ben Cavender to Bloomberg.
In China’s competitive apparel market, the top two companies – Heilan Home Co. and Fast Retailing Co.’s Uniqlo brand – had 1.2 per cent and 1 per cent market share respectively in 2015, according to researcher Euromonitor International.
“The apparel space here needs to consolidate, and the winners going forward are companies with the right systems in place, such as inventory management, the right locations,” said Ben Cavender, a China Market Research Group analyst. “Teenie Weenie is in a good position as it targets the younger casual fashion consumer base.”
In the past year, V-Grass has shut a third of its boutiques located in third and fourth-tier Chinese cities, and in lower-end malls in bigger cities, Tao said. While those outlets had been profitable, the company wants to presence to establish itself in high-end locations in the biggest cities.
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