Gap Enter China

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  • Topic: Banana Republic, Product Red, Forth & Towne
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  • Published : May 11, 2013
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Is the cake easy to share?
----Review on GAP entry to China Review GAP’s

“If you look at China there are 110 cities with a population of one million or more, and all of them have room for a GAP store there somewhere,” ---- Redmond Yeung, president of GAP INC China operations INC’s

In Nov 2010, the American apparel retail giant GAP settled down its first site site--Shanghai flagship on Nanjing Road anghai Road, sitting directly in China’s most modern city's most famous shopping street. With the desire to get a piece of the grand attractive cake, GAP bravely jumped into the hot fast fast-fashion pot in China. This move finally put all the first three biggest apparel retailers of the world in the Chinese market, of which the other two refer to the Spanish Index(ZARA) group and Swedish H&M, who have entered China in 2006 and 2007 respectively. ,

History
In Aug.1969, failing to find a fitted pair of jeans, Don Fisher and Doris opened the first Gap store on Ocean Avenue in San Francisco whose merchandise consisted of Levi's and LPs. The next year they opened the second Gap store and established its first corporate headquarters in Burlingame, California with just four employees. Today Gap Inc. rst has been the largest apparel retailer in USA with five brands--- Gap, Banana Republic, Old Navy, Piperlime and Athleta--- with about 3,263 company-owned and franchise store and 134,000 employees. It ships to more than 90 owned stores countries through on line business with an annual revenue exceeding $1.5 billion in 2011 The brand stands for 2011. casual, American style at accessible price points.

Fast-fashion market
Fast fashion is a product of the contemporary world. It refers to the designs move from fashion show to store in the fastest time to capture current trends in the market. This allows the mainstream consumer to take advantage of current clothing styles at a lower price. It requires the enterprises to have the highest sensitivity and quickest response to the newest trends and produce at decent qualities coupled with reasonable prices. Seeing the sluggish walk in their home market like other industries the global apparel retailers turned to the Asian markets, especially the Chinese fashion market which is rega regarded as a key growth driver. Since the late 1990s, the world has been shown a rapid-developing China in all aspects, bringing increasing wealth and leading to a more opening developing increasing society. The last few years saw a fast fast-fashion explosion across China's major cities. People who have more disposable income and more comfortable and sociable life began to pay atten attention to clothing. “One style fits all” cannot meet need any more. A larger portion of the cash is spent on clothing. (See Exhibit 1 for details.) According to a report from Boston Consulting Group, over the past decade, the fashion industry in china has tripled in market over size, reaching nearly RMB 400 billion by the end of 2010 Chinese consumers are expected to continue to grow in 2010, strength and sophistication, tripling their annual expenditures on fashion by 2020 to 1.3 trillion RMB, or $200.7 stication, billion at current exchange. And on-line retailing(148 million on line shoppers&461.0 billion RMB in2010)with line on-line apparel the most popular categories.

Exhibit 1: Per Capita annual expenditure on clothing of urban and rural households, 2006-2010

For the fast fashion brands, the target group is mainly the young generation of 20s and 30s, who constitute the existing and potential middle class that is marked white collar, status-obsessed, affluent and sensitive to new things. They are more acceptable or inclined to foreign products, like to go ahead in the forefront of the era, but for most people the luxury or designer brands like LV are again too far, so fast fashion resolves this problem for them. Unlike their parent generation, as being called “post-1980” this young group, without experiencing...
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