Niche Market Defined
According to Phillip Kotler, a niche is a narrowly defined customer group. Niche markets primarily consist of market segments within the larger market place who have similar demographic, psychographic, buying behavior and/or lifestyle characterics. The Fenix Group started with two entrepreneurs, Anthony Keung (Chinese) and Masaaki Ogino (Japanese) who shared the same business philosophy, which is aiming at niche markets, that most times are left untouched or under-served.
How did Fenix identify and tap into different niche markets?
Knitwear Manufacturing Niche Market
The Group first niche was knitwear manufacturing after which they diversified into fashion and general merchandise retailing. Fenix identified every new niche market out of experience and knowledge gained from previous business opportunites. For instance, knowledge gained from working at a yarn manufacturing supplier enabled them them to move from trading imported Japanese yarn to Hong Kong knitted factories to expanding into knitwear manfacturing and setting up their own manufacturing company in Hong Kong. This venture was successful in the Japanese market due to increasing demand for high quality knitwear due to increased labor cost of local production. Fenix opened knitwear factories in South and Central China to minimize cost and improve their competitiveness by concentrating only on high quality knitwear due to increased price competition. This strategic move to China laid the foundation for the duo future development in knit wear manufaturing which earned them a value of US$ 100 million from producing nine millions units of knitwear per year. The company also exported to the US and developed relationships with European brand such as Armani and Maxmara.
Fashion Retailing Niche Market
Fenix first experience with brand retailing was in the early eighties when they opened two counters in a department store in Sogo, Hong Kong that sold multiple designer clothing from customers. Due to poor profits, Keung and Ogino changed their strategy and sourced merchandise from known knitwear manufacturers and retailed them with the Fenix labels. This slighty improved the bottom line which allowed the company to breakeven but was still below expectations.
Experiencing these hurdles in the brand retailing business Fenix was undetttered and continued to search for new ways of bridging the gap in the market. The niche market identified in fashion retailing was based on the experience of being Prada franchised retailer for twelve years in the high- end market. Even though Prada protected their core competencies, the working relationship created a lot of exposure in the mechanics of the market which allowed the company to gain valuable insights into high- end consumer markets in Asian, European and US market.
After being advised that Prada will not renew the twelve year contract, Fenix created and launched their own fashion brand Anteprima in the high-end market. Keung and Ogino realized that an increasing demand existed for high- end fashion designer labels to compliment a trendy modern lifestyle for upscale consumers and they capitalized on that assumption and made their own brand a top selling product in Hong Kong and Japan.
Additionally, Prada assisted the Fenix in establishing their niche market in the high – end market by assisting them with the production and design of their products since they lacked the inside expertise. Eventually with the growth of the Prada brand, the arrangement was discontinued and Fenix invested it its own design and production facility in Italy to continue the Anteprima line of brand products.
General Merchansing Retailing Niche Market
At the 10th Hong Kong Forum in 2009, Keung made the statement that “change is forever”. With this motto the Fenix Group was able to identify yet another untouched niche market which re-inforced their standings as a multinational network of knitwear...
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