Expansion plan to bypass China Mango or change foreign agents to deal with “marginalization”

In the expansion plan that Mango just announced, the attitude of the brand to the Chinese market has become the most subtle existence. After the “fast-moving” brand, the earliest fast-growing brand that entered China, Mango may change overseas agents to respond to the ever-changing market changes.

Mango's New Expansion Plan Avoids the Chinese Market

While other fast-fashion brands are actively occupying territory in China, the “2019 Plan” of Spain’s high street chain Mango seems to have come a bit late. Not only that, in this content-rich plan, the popular Chinese market for global fashion brand “Gold Rush” has been pushed into the “cold house”.

It is reported that Mango plans to reach sales of 4.5 billion euros in 2019, increasing the number of stores from the current 5,200 to 7,800. Mango also plans to launch large-size and teenage clothing series. At the same time, men's clothing is also the focus of the brand's recent actions, Mango announced that it will fully expand its HEby Mango men's collection.

However, in the strategy of opening a new store, Mango runs counter to the way competitors compete for expansion in China. Mango’s new 100-150 stores in the future will all be concentrated in Europe, such as Germany, France, and Italy.

For the Chinese market, brand general manager Enric Casi is particularly cautious. He stated that Mango will conduct comprehensive research and planning of the Chinese market to determine future development plans.

Low cost "marginalized" Tide brand

Most Chinese consumers still do not know what “fast fashion” is in 2002. Mango has already arrived in China and spent 200 years in 200 retail outlets in 80 cities in China. Mango, CEO of Mango Greater China, said last year that “in the next three years, the brand will open 500 retail outlets in China, covering more than 100 cities.”

Today, "discard shop" has become one of the portrayal of Mango in China. In Beijing alone, the Mango counters of Dongzhimen Ginza Department Store, Chongwenmen New World Department Store, and Dazhongsi Shangke Department Store were successively withdrawn, and Wuhan, Dalian, and other places also reported some Mango counters. In contrast, in 2012, Uniqlo and H&M had 71 new stores and 339 new stores in China.

The lack of price advantage may be the main reason why Mango is “marginalized”. Ms. Wang, who often buys fast-fashion clothing, said that the price of similar products of Mango is nearly 1/3 higher than that of H&M. Like women's striped sleeveless tops, H&M sells for 69 yuan and Mango sells for 89 yuan.

According to a Mango shopping guide, the counters will always be new on a weekly basis, and may be updated in 2-3 days. Although the new speed is relatively fast, compared to the competitors, the too small store makes the style that Mango presents to consumers not rich enough.

Working with Overseas Agents to Broaden Product Line

For Mango, besides the low price/performance ratio of products, in the tide of “pulling out of stores”, the problem of poor profitability in the agency model also emerged.

Mango has blossomed all over China. Its dealership area in Asia is 300 square meters, and ZARA has more than 3,000 square meters stores in China. Insiders have made an analogy. The turnover of ZARA's 500 direct-operated stores has reached Mango's perhaps 2000 agent stores.

Mango is trying to change this situation. The brand plans to keep the ratio of franchising and independent holding within five years. At present, in all the stores of the brand, the number of stores with an agency level reaches 60%.

In China, in addition to increasing the proportion of direct-operated stores, Mango will have new attempts on the agency model. Informed sources disclosed to the Beijing Business Daily reporter that Mango plans to open its first men’s clothing store in China in a shopping mall in Shanghai in September this year. However, the agent that cooperates with the brand does not come from China.

According to Shen Jun, a retail expert, this shows that Mango is changing the traditional agent model in China. However, Shen Jun also pointed out that the direct operation and agency model should be two horses that go hand in hand. In addition, Mango needs to make adjustments in prices, and it is closer to the changing tastes of Chinese consumers in terms of style.