Reporter | Chen Qirui
Edit | Lou Shuqin
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"We have targeted local strategies from the very beginning of our entry into the Chinese market." Andrea Baldo, global CEO of Danish fashion brand GANNI, said in an interview with Interface Fashion recently, "But at the same time, try to retain the Scandinavian style of the brand as much as possible." ”
GANNI is representative of the new Nordic style. Founded in 2000 by Danish Frans Truelsen, the brand initially started selling knitted cashmere products. In 2009, Ditte Reffstrup and Nicolaj Reffstrup took over the brand's style transformation, with a doll collar, puff sleeves and animal prints mixed and matched in bright colours that characterize GANNI today.
In 2017, L Catterton, an investment arm of the LVMH Group, announced the acquisition of a majority stake in GANNI, providing financial and strategic support. The investment is like a stepping stone, making it easier for GANNI to enter large retail channels, and the pace of global expansion is accelerating.
Image source: GANNI
China is naturally a market that cannot be bypassed. Through cooperation with I.T Group and retail channels such as Net-a-Porter, GANNI has gradually gained visibility in the Chinese market over the past few years. But GANNI is still a niche brand, and its reputation and reputation are still confined to small fashion circles. For most ordinary consumers, GANNI is a new face that is unfamiliar.
It wasn't until May 2021 that GANNI launched the Tmall flagship store. This is the brand's first official sales channel in China, announcing the official rollout of China's strategy of direct expansion. This seems to be a belated decision, and By Far and Apee Mod, who have become popular at the same time as GANNI, have already opened stores on JD.com and Tmall.
What's more, GANNI needs to face a more competitive market than it did a few years ago. This also makes seizing the opportunity more important than ever, and accelerating expansion becomes a decision that must be made.
"GANNI's sales in china's wholesale channels continue to grow organically, and we quickly became aware of the potential opportunities. But it takes time to do research and build a team in the Chinese market. "The final decision to open up the Chinese market is set after the expansion of the US market and the experience learned from it, because we know that there will be challenges in the Chinese market and we need to be fully prepared." ”
GANNI Global CEO Andrea Baldo Image source: GANNI
The United States is ganni's first stop to expand globally out of Europe, and since 2018, it has gained absolute reliance on the company's resources to expand the US market. In 2019, GANNI opened its first brick-and-mortar store in New York, followed by an expansion of its offline retail network to cities such as Los Angeles and Miami.
The secret to GANNI's success lies in community operations, which Andrea Baldo calls a "cluster strategy," which has sometimes been replaced by the term "community first" in interviews with other media outlets. In simple terms, it is that the brand establishes an emotional connection with a small number of local consumers in the city, and then leverages the influence through word-of-mouth communication.
This approach can find similarities in the trajectory of Lululemon's fortunes, which has long been regarded as the breaking rule of the new brand today. In the process of expanding into international markets, GANNI hashtags #GANNIGirls have created style- and values-oriented communities on platforms such as Instagram, and leveraged online and offline activities to reinforce consumer loyalty.
Three years later, the U.S. has overtaken the Nordic region as GANNI's largest market, and in 2018, North America accounted for only 13% of sales. Successful precedents have given GANNI confidence in entering the Chinese market, but differences between China and the United States challenge GANNI's previously accumulated empirical approach.
China's social media ecology is diverse and complex, Weibo has maximized traffic, WeChat is a space for private communication, and brands are cautious and important in the process of choosing platforms according to their own positioning and strategy. GANNI focuses on Little Red Book, whose image-driven content sharing model is similar to Instagram, and Andrea Baldo believes the platform helps facilitate conversations between brands and community users.
"We will communicate with consumers and opinion leaders to export GANNI's way of looking at fashion. By constantly displaying new products and offering affordable prices, GANNI can gradually cultivate a local community system and gain new customers. ”
GANNI and Chinese celebrities conduct cooperative marketing Image source: GANNI
Similar to the pace of development in the US market, GANNI is also about to expand its offline retail network in China, aiming to open four stores in Chinese mainland by the end of 2022. The plan is less than a year after the opening of its Tmall flagship store, and no matter how it looks, it is full of radical colors, and most overseas niche brands still use Tmall and Mini Programs as the only official sales channel.
"As expected, it will take at least 18 months to build a community and get consumers to fully experience brand value. But Tmall flagship store sales are growing rapidly, and GANNI has reached a turning point in development by the end of 2021. "Then we realized that with the help of brick-and-mortar stores, consumers could better understand GANNI's values."
Extending to offline "community first" means that GANNI stores may not be large flagship stores for multi-regional consumers, but rather community-based flagship stores that act as community hubs, although brands do not exclude working with operators such as Swire Properties.
It is undeniable that it is not easy to continue to find high-quality shops, and expanding too quickly has put the brand under cash flow pressure. However, the pursuit of store scale effect is not the current goal of GANNI in the Chinese market.
"These four stores are not designed to drive rapid sales growth, the significance is to understand how this model works. In terms of overall sales, we will balance DTC (direct-to-consumer channel), wholesale channel and online and offline channels, and the products sold will be targeted. If the community response is good, we will consider opening a store in a new city or other location in the same city. ”
GANNI Paris Store Image source: GANNI
Beijing and Shanghai are the cities that have been identified to open stores, representing the northern and southern markets respectively, with large populations and different consumer preferences, and brands should be more flexible in their localization strategies in site selection and operation. After all, China's niche fashion brand market is different from a few years ago.
It can be seen that a large number of niche brands that have become popular in recent years with explosive singles have quickly fallen silent due to the lack of follow-up innovation and marketing. The same law applies to niche brands, where the head brand enjoys the most resources and the rest of the players struggle to seek exposure.
In addition to facing increasingly fierce competition, low-price plagiarism and piracy are equally serious. People will praise GANNI for jumping out of the traditional Nordic style and love its bright colors and design details, but will also ask where to buy cheaper "GANNI style" imitations.
Brands will undoubtedly choose to work with sales platforms to crack down on merchants who produce and sell counterfeit products. But the real problem is that if a brand's style is so easy to imitate, it is very likely to fall into passivity after the trend has passed. Gap is a ready-made case, the simple American style made it rise rapidly in the 80s, but this practice of framing itself in style and positioning at the beginning also allowed Gap to be quickly abandoned by the times after the tide passed.
GANNI Spring/Summer 2022 Series Conference Image Source: GANNI
Undoubtedly, the bright new Nordic style is indeed at the heart of GANNI's current appeal, but the brand is not only in a passive position in the changing trend.
Ganni has adjusted the frequency of releases of new series in recent years, and the tradition of releasing new series on a quarterly basis has not changed, but it is interspersed with the release of multiple small capsule series to quickly keep up with the trend changes. Another important point is global collaboration. Andrea Baldo told Interface Fashion that teams in cities such as London, Paris and Shanghai work together to monitor local consumer preferences, and the brand has previously launched a limited series for Chinese holidays.
But the more important core is to export values in the minds of consumers that transcend style and trends.
"The Nordic countries have a rich cultural experience that encompasses music, gastronomy, art and interior design. Ganni represents the fashion part of it. The arrival of tourists helped the brand establish a modern Nordic-style image. Andrea Baldo explains. According to him, GANNI is an integrated brand that embodies sincere fashion values and Nordic culture.
The convenience of international tourism has made the upsurge of Chinese tourists traveling to Northern Europe before the epidemic play a role in the construction of cultural value cognition. Going back in time, these tourists may be GANNI's seed users in China.
GANNI said that from the sales side data, it can be seen that Chinese consumers' attention to them is no longer limited to explosive products, and their demand for different categories of products has increased significantly. This is regarded by GANNI as a manifestation of consumers beginning to understand the connotation of GANNI, which is a positive feedback signal given by the Chinese market.
"We were amazed at the number of repeat customers." Andrea Baldo said, re-emphasizing GANNI's China strategy, "If anything needs to change in the future, it's to become more localized." There are both advantages and disadvantages to the international expansion of small brands, and the cluster strategy allows us to establish a value connection with the local community. ”