M&S to Expand Into China
By Laura Elliott.
The British favourite, retailer Marks & Spencer, has had its decision to expand into China welcomed by British expats living in the Middle Kingdom. It has so far taken four years for M&S to open just eight outlets in the country, however, the chain has now announced that it plans to double this number in the next 12 months.
Marks & Spencer has recently suffered subdued sales in its UK market, following the much-discussed double-dip recession. Profits in Europe have also fallen short of predictions, with the eurozone crisis hitting the retailer hard.
As reported by The Telegraph, however, a British software designer working in Shanghai, Mark Andress, said that “We now have quite a lot of familiar UK names in the shopping districts. Retailers are no longer dipping their toes in the water but are aggressively expanding across China as part of a long-term commitment.”
Despite the welcome by British expats, local residents may prove to be a tougher consumer to crack. James Roy, a senior analyst at a Shanghai-based China Market Research Group, said that “In China so far Marks & Spencer’s clothing lines have not been much of a departure from what they offer in the UK or in Hong Kong. The styles are mostly the same and this becomes an issue, because when young Chinese consumers look at their clothes they think they’re for middle-aged men and women in their late 40s and 50s.”
One British expat also claimed that “The problem is that middle classes don’t really exist in China. Anyone who would typically fall into this category doesn’t want to stay here but wants to move up the social ladder and become very wealthy. Then they want designer labels.”
Despite this warning, there are a number of well known retail names vying for position in the Chinese market, including H&M, Zara, and the Japanese brand Uniqlo.
It was in 2008 that M&S opened its first Chinese store in Shanghai. At the time, the company believed China to be a profitable market. However, critics have claimed that the chain’s basic products did not appeal to locals, and that clothes sizes were too large. It remains to be seen whether or not the aggressive expansion into the market that has just been announced, will prove to be more of a benefit or a hindrance to one of the UK’s best-loved retail names.
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on Jun 30 2012. Filed under Asia, Events, International, Latest News, Retail News, Supermarkets.
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