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Case study on two fashion brands: Forever 21 succeeded in its Chinese digital marketing while ASOS shut down its Tmall store

Understanding the Tmall ecosystem is the first step to launching a successful online store in China. But building a sustainable eCommerce presence is not just about using the right tools on Tmall, it’s applying them in the context of a dedicated China digital marketing strategy and integrating them with the digital channels on and off Tmall such as WeChat platform that makes all the difference to reaching Chinese consumers. Let’s take a look at two well-known fashion brands to illustrate the importance. 

Asos

Background

Asos is a well-known online-only clothing retailer. Founded in 2000 in the UK, it now has offices in Germany, France, the US, Spain Italy and Australia, carrying 850 brands. 2016 was noted as a record year for Asos, reporting 26% growth and seeing record sales of GBP 1.4 billion (AUD 2.3 billion)6. However, this record year wasn’t without a low point. In May 2016 Asos announced that it was pulling the plug on its Tmall store, the loss projected at GBP 8.6 million (AUD 14.7 million).

The Chinese brand and product strategy

On the surface the foray into the Chinese market seemed promising — there is a demand for European fashion, the business is very connected to its core customers in other territories and they are renowned for leading the way in online and mobile customer experience. The problem was that Asos didn’t do enough research to develop the right strategy for their Chinese target market. Not only did they offer a fraction of their collection, (out of 80,000 pieces they offered a mere 6,000 items) but the things that they did offer were mainly accessories rather than clothing, making it hard to compete with local vendors. Because the clothing was so limited, Chinese consumers were wondering on Chinese social media whether they were just getting the old discarded stock.

Pricing

Asos made a decision to make their clothing dearer on Tmall. However, in the eye of Chinese consumers, the brand wasn’t premium enough to justify the higher price point and couldn’t compete with other international brands of a similar standing (such as Zara).

Engaging with customers

Weibo and WeChat platforms have very different functions and capabilities to Western social media platforms. Instead of working to gain an understanding of how they work, the UK team insisted on applying their normal strategy to the Chinese market, with less-than-stellar results. As one person working at Asos at the time recounts:

‘The problem from the start was that Asos relied on people, strategies and measurement metrics for their marketing that worked in the UK but had very little application in China. I know because I’ve spent time in China, met with the top marketing agencies in China and listened to just how different the marketing landscape is there. But Asos, and the people they employed from the UK thought they knew best, thought the local agencies weren’t operating at their level and working to the same rules that they applied in the UK. For example, it was trumpeted as a big success when Asos reached 100,000 followers on the Chinese social network Weibo but it later transpired that most of these followers were from ‘zombie’ accounts and weren’t genuine, active followers.’

Forever 21

Background

Forever 21 started as a small bricks-and-mortar store in California. It specialises in cheap fashion and accessories and has grown to encompass over 600 stores in America, the Middle East and the UK. Forever 21 launched their Tmall store in 2011 alongside its official China website and ahead of opening flagship bricks-and-mortar stores in Beijing and Shanghai. It’s now considered as one of the most successful international brands in Chinese eCommerce.

The Chinese brand and product strategy

Forever 21 researching the Chinese market and developing their strategy before launching their Tmall store. Being a nimble low-priced fashion chain, it prides itself on constantly changing up its lines, delivering hundred of options each day at competitive price points. Forever 21 held on to this brand promise in the Chinese market. They made sure that their merchandise could keep up with the demand for modern, affordable fashion. Each week, Forever 21 will add 50-60 new items for purchase.

Pricing

Forever 21 ensure that their prices are lower than their competitors and consistently run special promotions. For example they offer a daily 21% discount and work closely with Tmall to come up with other compelling offers. They also offer free shipping on orders over US$30.

Engaging with Customers

Forever 21 used social media like Weibo and WeChat platforms to engage with prospective customers, building interest by posting content that wasn’t necessarily related to their lines, but spark the interest of their target audience. For instance, one of the most popular posts to date is about the best places to visit in Shanghai. This strategy succeeded in creating a follower base that is highly loyal to the brand. Their growth has been such that in addition to their 2 flagship stores in Beijing and Shanghai, they have expanded to 10 more stores in Wuxi, Hangzhou, Wuhan, Chongqing and Shenzhen.

As these two examples highlight, launching a successful Tmall Global store depends on market research, a localised brand strategy and value proposition, building relationships with the right partners to fill gaps in the understanding of the Chinese eCommerce and Chinese digital marketing, as well as a comprehensive and consistent promotional strategy. 

 

Download our free ebook: Tapping into the Chinese eCommerce opportunityThe Tmall is the largest eCommerce platform in China. The platform is transforming how Chinese consumers shop and interact with international brands. To enter and flourish in this digital retail space will present unrivalled opportunities. Our free ebook, Tapping into the Chinese eCommerce Opportunity is a 101 guide on everything your business needs to know to launch a successful Tmall Global store. Download it now.
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