thanks, relaxing for sharing the article.
it is a useful report. And, relaxing is also rite abt the fragmented market. The combined apparel market can constitute products ranging from baby wear, teen wear, season wear, casual wear, sportswear, premium or even differentiate by gender. that's no way one apparel company can dominate and monopolise a big market share in china.
i think Eratat did execute a good strategy by launching their classic first in 2nd and 3rd tier cities first when most other competitors are trying to break the 1st tier cities, which is more competitive due to global brands.
although there seems to be more Eratat premium shops being open in 2011 than classic shops, i hope the management will also continue to grow their classic products and not neglect the classic due to the premium. The proportion of classic and premium needs to be in a balance.
e-shopping for apparels is a very interesting concept. I will bring this qns up during the next Eratat briefing.
For me, i am quite skeptical abt apparel e-shopping as most ppl would want to try out the clothes before they buy. shops will still be needed for shoppers will still want to enjoy the feel of shopping and trying out various products. However, i do have some female friends that i know of who bought apparel online. It will be interesting how the online space can create the opportunity for apparel companies. Having a shop space is too costly and it would be good to increase sales and wider the distribution channel.
The female apparel is an impt target market but not straightforward as female designs have more variety and females tends to be better bargainers than males who may just buy without much thinking. I can understand why Eratat starts off with premium for menswear first. But i won't be surprised someday if eratat enters the female premium wear....
tks.
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[relaxing 02-12-2011]:
In terms of market share, all apparel brands in China are small fries as the Rmb400 billion market is very fragmented. Even a leading brand like Lilanz ( China Lilang listed in HK ) which sells abt Rmb2 billion ( double that of Eratat’s ) has a small share in it’s market segment. The excitement is that the market is expected to grow to Rmb1.3 trillion by 2020.
www.china.org.cn/business/2011-08/30/content_23310600.htm
It’s a marathon race to establish the brand and sales/distribution network as China is such a huge country. Eratat’s 900 stores nation wide is no chicken feed as most top international brands have only a fraction of this as they are mainly in 1st tier cities. As they are in consolidation phase, it pays to be cautious in their expansion.
Investors should not overlook that Eratat takes pride in being placed 40th position out of 681 SGX listed companies in the 2010 BT Governance and Transparency Index. ( ref CEO report in 2010 ann report which can be downloaded from Eratat’s website ) Expect them to report everything as they are, though some may think they are not savvy for disclosing too much info.