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Beijing Brief: Launching a Fashion Brand in the UK: Urban Revivo Group Six

Ellie Sharpe: 14009208

Manchester Metropolitan University BA (Hons) International Fashion Promotion Synergy Coursework Two

Julie Hodson March 2016

Word Count: 3,052

Table of Contents 1.0 - Introduction

Page 3

2.0- Literature Review

Page 4

4.0- Target Market and Consumer

Page 5

4.1 - Urban Revivo Existing Chinese Target Market

Page 5

4.2 – Consumer Behavior

Page 6

4.3- Consumer Behavior China

Page 6

4.4- The UK Consumer

Page 7

4.4- UK Equivalent Target Market

Page 7

4.5 - Urban Revivo UK Target Market 4.5.1. – The Consumer

Page 8 Page 8

4.6 – SWOT Analysis 4.6.1 – Strengths 4.6.2 – Weaknesses 4.6.3 – Opportunities 4.6.4 – Threats

Page 9 Page 9 Page 10 Page 10 Page 11

4.7- Conclusion

Page 12

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1.0 Introduction (Olivia McDermott, Maisie Whittam, Anna Quinn, Jessica Portman, Rebecca Gow, Ellie Sharpe)

1.1. Aims and Objectives To research and analyse a Chinese fashion brand, its appropriateness to be launched in the UK and develop a strategy to adapt and launch it within the UK. The main objectives are listed below: 1. To collaborate with students from BIFT who will identify potential brands to be launched in the UK 2. To evaluate and identify the brand the market and its competitors 3. To develop a proposal on how the brand will be launched in the UK,including location of store, marketing and social media marketing

1.2. Chosen Retailer Founded in 2006 one of China’s leading fashion brands, Urban Revivo, is growing rapidly in China with plans to open 100 new stores in the next three years, (Yeping, 2013) the opportunity for expansion into the UK is an opportunity that should be considered. The direct value of the UK fashion industry to the UK economy is £26 billion, up from £21 billion in 2009, (CIEE, 2015) proving that the UK offers substantial financial wealth to support the launch of Urban Revivo; alongside demonstrating the opportunity for expansion into and further growth within the UK economy. This confirms that the UK can offer substantial financial wealth to support the presence of an Urban Revivo store. The UK is a leading centre for the manufacture and distribution of clothing. The UK retail sector is strengthened by the variety of designs and products available on the high street and its ability to offer a truly unique experience in comparison to other major fashion centres for example, New York. Through entry to the UK fashion market Urban Revivo will benefit from multiple advantages including creativity of UK design, a world-class education system, growing importance of online sales, and the depreciation of sterling to be brief, (BFC, 2014). This report provides a thoroughly researched evaluation of the Chinese fashion brand Urban Revivo, the UK market, the target market, competitors alongside other topics to address the subject of Urban Revivo entering the UK market.

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2.0- Literature Review An Overall analysis of Urban Revivo’s existing target market currently in their Chinese brand. A literature review will examine how this can be translated into the UK market By identifying potential target markets for the proposed product is it possible to prepare a customer profile for each one. Profiling characteristics such as age, gender, occupation and geographical location are considered together with lifestyle characteristics as use in market segmentation. (Posner, 2011) This report will look into the different markets Urban Revivo could enter the strengths and weakness of these and the target consumer of the business. Targeting marketing is the strategy of focusing the retailers efforts on a select group of customers and employing a penetration strategy to serve all individual needs of a given market segment (Lewison 1997) Fashion retailers are increasing embracing target marketing as it helps identify marketing opportunities better. (Bruce, Moore, and Birtwistle, 2004)

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4.0- Target Market and Consumer A target market is a group of people or organizations for which business designs, implements and maintains marketing mix intended to meet the needs of that group. (Lamb, Hair, and McDaniel, 2010)

4.1 - Urban Revivo Existing Chinese Target Market Urban Revivo currently have four separate target market sections within the existing Chinese business. The four main target market groups, include Women’s, Men’s Children’s and Youth, which would be equivalent to our Teen market. (中国官网, 2016) Urban Revivo is part of China new fast fashion trend adapted from Europe. Urban Revivo have filled the gap of growing consumption and rising consumer demand for quality, stylish and colorful clothing at affordable prices. Urban Revivo is Chinas answer to this and has solved this problem, enabling ordinary people to sport the latest trends while getting value for money. (Global Times, 2013)

Urban Revivo

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(Figure 1 – Urban Revivo Product Placement Map)

Urban Revivo primary and most profitable target market are consumers between the age of 18 and 35, this is because the brand have "popularized fashion" which has made fast fashion more stylish clothing affordable for ordinary people, not just the wealthy few who can afford to spend on luxury brands (Global Times, 2013) allowing Urban Revivo to target a younger audience with less of the standard income needed to buy ‘popularized fashion’ Currently Urban Revivo’s woman’s collection, are priced from £15 to £75 (Ur.cn, 2016), which is in the same bracket as competitors H&M and Forever 21. Urban Revivo secondary target markets include male and females 16-17 and 36-45 year old male and females. Urban Revivo current sizing strategy within there Men’s, Women’s and Teen Ranges is XS, S, M, L XL (中国官网, 2016) allowing Urban Revivo to target a wide range of consumer with a diversity of ages as they are tailoring the sizing to many body shapes and sizes.

4.2 – Consumer Behavior Marketers need to identify preferences along with lifestyle habits of the customers who share them. The homogeneous group of buyers displaying like needs, wants, values and buying behaviors is called a market segment. These market segments are studied and carefully considered and then one or more is selected to become the basis of the organizations target market. (Rath et al., 2008)

4.3- Consumer Behavior China Above 45% of the people in the cities Beijing, Shanghai and Guangzhou consider themselves to have their own style and not just follow the trend. This implies that fashion brands and enterprises should attach more importance to product differentiation and brand positioning, to further enhance brand identity and customer loyalty. High- end consumers, who are often loyal buyers, attach great importance to style, quality and brand image. Brand apparel also appeals to mid-end consumers, but they tend to have a weak brand loyalty, while price continues to be the determining factor influencing the buying behaviour of low-end consumers. (China’s fashion industry, 2015) “Customers in the larger Chinese cities like Beijing and Shanghai are moving out of the phase when they just crave the big names,” says Nels Frye, the blogger behind Stylites, one of China’s most influential street-style blogs. “They are dramatically more stylish these days and, for instance, multi-label stores are a response to this change, where a more personal style can be defined.” (Lee and Edwards, 2014)

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Li Mingguang, the founder of the domestic fast fashion brand Urban Revivo (UR) said that each brand has its own distinctive features. "We differentiate our products with details that are more suited to Asian customers' statures, and with lower prices," he said. "We shaped our own advantages as a result." (Global Times, 2013).LiMi ngguangc r edi t st hebr and' s‘ affor dabl epr i ces , l ocal i s edsi z i ngandi t sabi l i t yt ot ai l orgl obalt r endst oChi neset as t esas f ac t or sf ori t ss uc cess( Gl obal t i mes . cn,2016) . ’ Effective market segmentation approaches such as Urban Revivo’s in China can show a company which customer group is most profitable and how to best serve their needs (Morritt and Weinstein, 2007)

4.3- The UK consumer Over the past fifty years as consumers have become wealthier, the purchasing of clothing is no longer such an important part of consumer purchasing patterns. In the 1950’s purchases took up nearly 30% of consumers disposable income as compared to a mere 12% today. (Jackson

and Shaw, 2008) UK consumers have also moved the goalposts for retailers vying to retain their loyalty in the five years since the recession began, according to the latest Customer Satisfaction poll from Verdict. Price has unsurprisingly become more of a consideration in choice of retailer compared to pre-recession 2008, especially in essential sectors such as food, clothing & footwear and personal care. But Verdict’s results can reveal that retailers must pay attention to factors such as range, service and convenience to ensure they stand out in their sectors. (Retail, 2016) 4.4- UK Equivalent Target Market Urban Revivo most competitive opponents in the high street have been identified as Zara and H&M. The Chinese brand has been described as “Zara’s style with H&M prices” (Chu, 2014) Therefore it is likely that Urban Revivo will fall in a similar market and have customers sharing similar characteristics and buying behaviors with brands such as Zara and H&M. Therefore looking into Zara existing target market within the UK would give Urban Revivo an insight into the demographic of the Zara UK consumer aiding them to launch there business in the UK successfully. Zara's target market is mostly women and fewer men. Zara designs more clothing for women. As you can see, in any of Zara stores there are, frequently, two floors of women's assortment. Zara's prices are moderate which satisfy customers' needs and wants. It is focused on people of different ages. Those who earn enough money and are able to buy clothes from Zara shops. Zara has never had very high prices, because it creates new designs every two weeks. In order to sell out "old clothes" and bring in new arrivals they have to make available prices for customers.

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Clothing in Zara is comfortable and convenient for everyday lifestyle: flat shoes, jeans, and jacket with the aim to make people feel comfortable in busy daily life (Gudz and profile, 2013)

4.5 Urban Revivo UK Target Market Urban Revivo main and most profitable target market in the existing business in China are Female consumers between the age of 18 and 35 (Global Times, 2013) If Urban Revivo were to initially launch there brand within this market in the UK the differences in consumer behavior of the target market would need to adapted too. A consumer profile for the UK target market has been drawn up below.

4.5.1 - Consumer Profile Consumer Profile Ana: Individual Urban Trend Young women with confident style and Mid range spending habits Key Demographics Shopping behaviour

Favourite Shops

Favourite Purchases

Age 18 – 35 Buys for self only Pays full price Pays using debit card Buys to express personality H&M Gap Next Shirts Belts Shoes Dresses

(Experian Ltd, 2009)

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Consumer Profile Tammy: Image as Identity Young women who achieve peer approval through clothing with a limited budget Key Demographics Shopping behaviour

Favourite Shops

Favourite Purchases

Age 18 – 35 Lowest spends Fashion very important Spends a lot of time shopping Brand and style are key issues River Island New Look Topshop Jeans Vests Trainers Underwear

(Experian Ltd, 2009)

4.6 - SWOT Analysis 4.6.1- Strengths A strength of Urban Revivo’s existing target market, is that is it quite diverse in its age range. As it has a primary age range is 18- 35 years olds however secondary target markets includes male and females 16-17 and 36-45 year old male and females. Demonstrating that the business is able to attract and target a wide age range. This is good as it allows the business to be able to reach into many different markets within the UK and add to their success within the UK. Business within the UK that attract many different ages including Both Primark and Next have the widest appeal among a broad age range and therefore this is likely to have contributed to their success within the UK. (Mintel, 2015)

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(Figure 2 Customer Profile by age % July 2015)

4.6.2 - Weakness The main weakness when entering the UK market for Urban Revivo is that Urban Revivo has four different sub ranges all targeting different markets and consumers and therefore it may be best that Urban Revivo initially pick one market to concentrate on in order to establish the business within the UK successfully. For example BHS (British Home stores) a brand that targeted very similar markets to Urban Revivo including Mens, Womens and Teens has struggled in recent years to maintain success in all the target markets (Who’s gone bust in march 2016 - center for retail research, Nottingham UK, 2014)

4.6.3 - Opportunity

Although the recommendation would be that Urban Revivo would be best to initially launch into one of the existing four target markets from the China business (Women’s, Men’s, Youth and Kids.) Once established the fact that Urban Revivo have other existing markets in China that they could bring over into the UK would provide them with a great opportunity for expansion. The UK menswear market is growing and UK retailers are starting to tap into the expanding market as ways of growing their existing businesses. With the UK menswear market forecast to grow by 25.7% in the five years to 2019, outperforming all other clothing sectors, (Retail, 2015) When looking at the customer profile of where people buy clothes by gender,

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the retailers with the most even split between men and women are John Lewis and Topshop/Topman, which both have separate divisions or departments for each gender. (Mintel, 2015) Zara opened a men-only store in Birmingham’s Bullring shopping center at the end of 2014 and New Look is looking to appeal to men by opening five standalone menswear stores by the end of 2015. (Mintel, 2015) This would provide Urban Revivo with a great opportunity for growth and to create a new target market within the UK. It may also set them aside from competing businesses and provide Urban Revivo with a USP for the business

(Figure 3 - Customer profile, by gender, July 2015)

4.6.4 - Threats A Threat with Urban Revivo’s current target market is that the UK 18 – 35 year old female market is highly over saturated, and therefore Urban Revivo may struggle to attract the target market because of the competition they face from existing UK based brand and business. Research also suggests that the 1835 market is slowing down ‘Young people are cutting back on their spending even more than they were last year, with under a third (30%) spending any extra money on clothing and personal items.’ (Mintel 2015) Also the 15-19 year old population has decreased 6.8% over the past five years and will continue to decline, by 5.3%. The number of 20-24-year-olds

will see the biggest decrease (6.7%) in comparison to its previous growth of 2.1%.

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The fall in the youth population over the next five years will mean that 15-24s will account for only 11% of the total population and contrasts with growth in other demographics. (Mintel 2015)

(Figure 3 Projected changes in number of 15- 24 year olds in the UK 2009- 2019) There are other Target Market age groups that are less saturated and may be easier to enter than the 18 – 35 year old market. For example research has suggested that there are currently 18.3 million over-55s in the UK, a figure that is expected to hit 20 million by 2018. This age group will then make up one in three of the population. The over 50s contribute £300 billion to UK economy and the growth in spending among this demographic is higher than in any other. (Wallop, 2015) Therefore suggesting that a change in target market may mean that the business is able to enter the UK market facing less competition in order to attract consumers.

4.7 - Conclusion To conclude it is vital that Urban Revivo initially select one target market and concentrate solely on attracting and maintaining customers within that market. With Urban Revivo primary and most profitable target market are consumers between the age of 18 and 35. (中国官网, 2016) it would make sense for the business to select this one, however as research suggest the current 18- 35 year old fashion market within the UK is very saturated and there is very little room for entry for new business (Mintel, 2015) There is also suggestion that the 18 -35 market is slowing down and that other age group markets are growing, therefore it may make more sense for Urban Revivo to target a different age group one with opportunity for growth.

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Bibliography

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BFC (2014) The Value Of The UK Fashion Industry [Online] http://www.britishfashioncouncil.com/uploads/media/62/16356.pdf [Accessed 13/2/16] CIEE (2015) How Fashion Fuels The UK Economy [Online] http://www.thecreativeindustries.co.uk/industries/fashion/fashion-facts-andfigures/how-fashion- fuels-the-up-economy [Accessed 13/2/16] C. Rhodes (2015) The Retail Industry: statistics and policy - Briefing Paper, Number 06186, 2 October 2015, House of Commons Library [Online] Www.parliament.uk/commons-library [Accessed 13/2/16] Cadman (2016) The UK Economy At A Glance [Online] https://ig.ft.com/sites/numbers/economies/uk [Accessed 13/2/16] Thomson (2012) The Changing Face of Fashion Retail [Online] http://www.retailweek.com/the-changing-face-of-fashion-retail/5037465.fullarticle [Accessed 13/2/16] Verdict (2015) UK Annual Forecasts 2015-20: Clothing & Footwear [Online] http://www.verdictretail.com/uk-annual-forecasts-2015-20-clothing-footwear/ [Accessed 13/2/16] Y.Yeping (2013) High Speed Style [Online] http://www.globaltimes.cn/content/824607.shtml [Accessed 13/2/16] Bruce, M., Moore, C.M. and Birtwistle, G. (2004) International retail marketing: A case study approach. Boston, MA: Elsevier ButterworthHeinemann. CHINA’S FASHION INDUSTRY (2015) Available at: http://china.nlambassade.org/binaries/content/assets/postenweb/c/china/zake n-doen-in-china/sectoren/creatieve-industrie/china-fashion-industrykansenrapport.pdf (Accessed: 31 March 2016). Experian Ltd (2009) Fashion segments - female types. Available at: http://www.experian.co.uk/assets/businessstrategies/brochures/fashion_segments_handbook_females_small[1].pdf (Accessed: 4 April 2016). Global Times (2013) High-speed style. Available at: http://www.globaltimes.cn/content/824607.shtml (Accessed: 31 March 2016). Gudz, L. and profile, V. my complete (2013) ZARA. Available at: http://newzarablog.blogspot.co.uk/2013/05/chapter-8-segmenting-andtargeting.html (Accessed: 4 April 2016). Jackson, T. and Shaw, D. (2008) Mastering fashion marketing (Palgrave master series). New York: Palgrave Macmillan. 14

Lamb, C.W., Hair, J.F. and McDaniel, C.D. (2010) Essentials of marketing. 7th edn. United States: South-Western Cengage Learning. Lee, X.E. and Edwards, S. (2014) Fast fashion in china: Revved retail. Available at: http://www.chinabusinessreview.com/fast-fashion-in-chinarevved-retail/ (Accessed: 31 March 2016). Mintel (2015) Available at: http://academic.mintel.com.ezproxy.mmu.ac.uk/display/752291/?highlight#hit1 (Accessed: 4 April 2016). Morritt, R.M. and Weinstein, A. (2007) Segmentation strategies for hospitality managers: Target marketing for competitive a...