Korean Brands Compete Fiercely With Local Competition

According to the world clothing shoes and hats net, from concept formation to physical objects,

In just five weeks, this speed has been a headache for traditional retailers.

But compared with Korean retailers, it appears to be too slow.

The entrepreneurs who calculate the abacus can get them in the morning.

The blueprint was sent to Dongdaemun, which has more than 5000 manufacturers stationed in Seoul. Before dinner, clothes can be sold and sold.

Jeongeun Grace Park, global sales and marketing manager at Metrocity, a South Korean retailer, said, "all the trends in Korea are starting from the east gate."

Metrocity, founded in Italy, has opened more than 100 stores in Korea.

Park may be exaggerated, but few people can deny that this lightning fast manufacturing center has enormous influence.

"East gate manufacturing" usually sells faster than the international market.

Brand retail prices are still low, and the business opportunities of emerging fashion providers are vast. After all, the entire supply chain is at home.

"East gate manufacturing" clothing is mostly owned by its own brand, while in South Korea, its own brand is very unusual.

The most common online shopping websites in Korea are also the wholesale clothing of the east gate.

Taeho Sim, a partner in A.T. Kearney, a global management consultancy, says that Korean brands have procurement strategies that can encroach on certain foreign retail rivals. These strategies include both internal production and part of offshore production. Kearney

"In this way, local companies can provide competitive prices, products that keep pace with the trend, while ensuring product quality and strong brand image."

Claire Hwang is a consumer and retail consultant, working in the international executive search firm DHR International Seoul office, often dealing with luxury brand customers.

But her wardrobe still has its own brand clothes purchased 10 years ago at the east gate.

Perhaps to your surprise, she said, "the quality of these clothes is not bad.

[contrast] H&M's clothes are not very durable.

Sometimes it doesn't matter if you throw it away, for example, if you wear a party, you can throw it in the trash can.

"You can see that many Korean local stores feel that Korean tastes are much better than international brands."

In South Korea, people who share similar views with Hwang are not uncommon.

More and more students and fresh people in the workplace, that is, a typical consumer of fast fashion, avoid international brands and fight for cheap and convenient online business, including Boohoo like e-commerce platform and online trading platform.

There, self-employed individuals can set up and publish personal online stores, and personalize recommendation advertisements when users browse the portal website.

These stores also sell the "east gate manufacturing" private brand clothing, catching up with the main trend in South Korea, which is not commonly provided by other stores in the world.

These shopping websites are usually operated by retail giants like Le Tian and Lotte. Subscribers of the website can get discounts that are not common in physical stores.

There are also a large number of chain brands of enterprise groups, such as Samsung's Bean Pole and 8 seconds (8seconds).

Borah Song, senior fashion editor of Vogue in South Korea, said, "you see many Korean local stores feel that Korean tastes are much better than international brands."

The most common clothing, socks, shoes and hats in ordinary Korean wardrobes come from Samsung chaebol group or the "east gate manufacturing" which is basically not brand names, and all possible sources between them.

This is due to the rapidly changing trend in Korea, the whole channel of integration, the strong market demand for different sizes of clothing, and some people think that the quality of Korean clothing is usually better than that of other parts of Asia.

Fierce local competition

The so-called "fast fashion" brand in English speaking countries is called "SPA brand" in Korea, that is, Specialty retailer of private label apparel.

Sim said, "H&M, Forever 21 and other SPA brands have always been able to satisfy consumers' preferences, but the rise of many Korean brands will make them face more intense competition."

Euromonitor, a market research firm, provides data that global fast fashion companies are in trouble in Korea compared with other rich markets in Asia.

In 2016, Forever 21 accounted for less than 0.1% of Korea's market share.

Its market share of Haines & Maurice group (Hennes & Mauritz AB) with H&M, Cos and other brands is 0.4%, and its share in the global market is 1.3%.

According to the recent investor relations report, the average sales volume of H&M brand in Korea is not satisfactory.

In 2017, the average net profit of each store was 48 million 500 thousand Swedish kronor (about 5 million 900 thousand of current US dollar). In the same period in Hongkong, Singapore and Japan, the figure was between 58 million 800 thousand and 73 million 900 thousand kronor (7 million 100 thousand to 9 million US dollars).

For example, Park said she would deliberately avoid H&M, unless "to go to fashion week, you need some special clothes and wear some sequins."

In Korea, the popular fashion models and patterns are quite different from those in the West.

Costumes from Europe and the United States usually have sequins, deep necklines, exposing the waist, and mostly tight fitting styles.

The clothes that Koreans like are expressed in other ways: super size sweaters, high waist A short skirts, wide leg trousers, high collar tops, long skirts and ankle dresses, high collar bottoms and sling vests.

Compared with other fast fashion brands, the more respected Zara has not encountered major problems in Korea.

But according to Zara's investor relations report, the number of Zara stores increased by 26% between 2011 and 2016, slower than that of other Asian countries: Japan grew by 35%, China 91%, and Malaysia 50%.

Lisa Hong, a research analyst at Rui International Korea, said that other brands of Inditex group lack the same popularity as Zara, so they failed to become popular in Korea.

"Consumers tend to buy those major brands and are less likely to try new brands," explains Hong.

In terms of the size of the Korean market, the fact that local players occupy the dominant position in the national clothing and footwear industry is indeed unusual.

There are 53% cities with a market share of more than or equal to 0.1% of the brand belonging to "made in Korea", which is equivalent to Japan (54%) and the UK (58%), but the market size of the latter two is more than two times that of Korea.

For example, the private brand clothing from the "east gate manufacturing" wholesale has occupied a relatively large proportion of the Korean clothing market, with a market share of 9.1%.

The share of non brand clothing in Japanese fashion market is 5.3%, 3.8% in the United States and 0.4% in Singapore.

For example, the private brand clothing from the "east gate manufacturing" wholesale has occupied a relatively large proportion of the Korean clothing market.

In any case, the outlook for the Korean market is still not optimistic.

In 2016, Inditex group opened several flagship stores and an online store in South Korea.

Haines Maurice's brand Cos adds an online shopping address, and Other Stories also opens a new store.

From 2016 to 2017, sales increased by 15% in Korean won, while group sales grew by an average of 3%.

"Although this rapid growth has slowed down in 2017, some of the fastest fashion retailers in the world have continued to perform well in Korea," Hong said.

Many Korean brands only focus on one or two of their businesses in order to maintain their overall brand image, but fast fashion retailers usually provide a wide variety of styles.

However, Benjamin Cavender, a consultancy at China Market Research Group, based in Shanghai, believes that foreign brands must be flexible in South Korea because the market is no longer as easy as it once thought it was. CMR

"They are struggling because it is difficult to keep the efficiency of the local market while maintaining the localization market," Cavender said. "It is more difficult to adjust the supply chain to achieve this goal, because many local brands in South Korea have already done so, and big brands have encountered difficulties when adjusting."

In addition, international brands will specially formulate strategies for entering the huge Chinese market, but the smaller Korean market may be lagging behind.

Sime said, "if international chain brands want to have strong operation in Korea and cope with the fierce competition in the local market, they should use more aggressive marketing strategies to match the fashionable products that have already been localized". In particular, we should pay attention to the preferred styles and designs of Korean customers, and at the same time guarantee the price concessions.

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Speed link, extremely local

The changing trend of Korea's popularity is also famous, which often frustrates foreign retailers trying to expand in Korea.

According to the online shopping platform cafe24 public relations director Alyssa Kang, selling wholesale or customized products Korea online store, weekly shelves of the new style can be up to 100 kinds.

Although this kind of rhythm may not match ASOS, Boohoo and so on part of Western electricity supplier, but still very fast.

Page of Korean business website Imvely: Source: Imvely

Perhaps more importantly, local online players can really capture the specific trend of the country, and these trends are not satisfied with international brand channels.

This phenomenon is also related to the strong entertainment industry in Korea. Only the K-pop music industry now has a value of up to US $4 billion 700 million.

Compared with other Asian markets, local stars are truly "fashion idols" in South Korea.

Because manufacturing is done in its own country, without relying on sophisticated multinational supply chains, wholesale site brands can quickly catch social media trends and integrate them into their stores.

Take this season as an example, the most fashionable trendy coat is the super long "cocoon" down jacket or cotton suit, which also reflects the dominant role of the specific clothing version in Korea.

Whether male or female, this type of A down garment with long legs and even ankles is popular, mainly white or black.

2018 the special edition of the long winter cocoon down coats sold in the Pingchang Winter Olympic Games has become a popular single product representative. Over 1000 people have queued up for purchase. A Korean TV shopping show invited men's Super Junior platform and sold 19000 super long cocoon down garments in a few hours.

"If there's a particular trend in fashion now, you'll see everyone wearing them," says Alyona Afanasieva, 08liter.com's overseas business manager at Seoul online shopping platform. "Everyone wants to buy the same.

Few people think "everyone is wearing this, so I'm not interested."

On the contrary, they will think, "everyone is wearing this, and I want one too."

It is inevitable that the trend of popularity will spread rapidly across the country in South Korea with 51 million highly homogenized population.

Here, 80% of the population has access to mobile Internet access, and teenagers spend about 4 hours a day using mobile phones.

Unusual online shopping experience

The popularity of the Internet in Korea has further encouraged consumers' enthusiasm for online shopping.

According to a survey conducted by TNS, more than 8 of every 10 Koreans have been shopping online, and the highest proportion of online shopping is in this survey.

According to Statista, the total volume of online shopping increased by 20.5% over the same period in 2016.

Local online players can really capture specific trends in the country, and these trends are not satisfied with international brand channels.

Similar to many parts of Asia, Korean clothing is often "uniform", especially tops or dresses.

Compared with the various sizes of Western costumes, the purchase of uniform clothing eliminates the need for trial fitting.

Korean consumers prefer Naver search websites rather than specific online shopping sites.

Other popular websites also include eBay like C2C platforms. Individual businesses can design and store stores by themselves, similar to Groupon's group buying websites and online franchised stores.

In addition, in addition to Stylenanda, Imvely and other large e-commerce sites, most retailers attract consumers through larger e-commerce sites.

For express delivery, Korean consumers are not expecting much.

South Korea to the north from south to north, similar to the United States from Losangeles to San Francisco, California, the most time-consuming courier is only one or two working days.

There are also stores that provide service without charge on the day.

No wonder South Korea is so suitable for developing the mobile commerce market.

At the same time, international brands that enter the Korean online shopping market rarely cooperate with local consumers who are familiar with and frequently used websites.

For Koreans, buy a basic black T-shirt. If you buy H&M, you have to find a brand online channel, but you can get one free score on their favorite e-commerce website.

These providers provide similar physical store shopping experience.

Take Imvely, the most popular online store, for example. The model with a beak or cheek is wearing new clothes, cooking crabs, drinking Starbucks drinks, holding popcorn, watching movies, using cell phone self timer, or doing other activities in daily life.

Kang said, "customers buy the feeling and atmosphere of these online stores."

The fashionable image of international fast fashion brands usually appears to be "too cold". Perhaps worse, Korean consumers may feel a little bored.

"Talking about how to create a brand image of the" love beans "[to arouse the sympathy or imitation of Koreans], the local online shop has done a lot.

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