CAPTURING THE NEXT FASHION OPPORTUNITY IN CHINA: ANALYSIS OF THE HIGH-END FASHION MARKET IN SECOND-TIER CITIES. THE CASE OF PLISSE’ SPA

Abstract

Second-tier cities have been described by many as the next growth opportunities in China. Since the beginning of 2000, these cities have started a significant development path that have led many to achieve impressive growth and rise as leading cities in the country, along with the group of first-tier cities –Beijing, Shanghai, Guangzhou and Shenzhen. Despite the great opportunity that these cities are representing for businesses, there are limited sources available on the topic: through the review of recent literature, this dissertation will provide a comprehensive view on the market of Tier 2 cities, with the aim to find a distinguishing economic profile. In the first chapter of this dissertation, Tier 2 cities will be analysed under different perspectives, which range from socio-economic data, real estate and logistics markets to development outlooks. One main part will be devoted to the examination of consumers living in Tier 2 cities and their purchasing habits: the main objective is to identify a peculiar profile that distinguishes them from other consumer groups in China. Moreover, the consumer analysis will be enriched with the description of the Chinese middle class and female consumers, with the purpose of analysing the target consumer segment for the final company case study.

Chapter 2 will investigate the market for high-end and luxury apparel (fashion) in those cities, with focus on the womenswear segment. Commonalities and differences among Chinese Tier 2 cities will be pointed out through the examination of different sources, as to understand whether they could be though of a single market from the point of view of high-end fashion brands. This chapter would help providing a framework for brands targeting Tier 2 cities, through the analysis on sales, retail and distribution and consumers’ profile and buying behaviour.

The research conducted in the previous chapters will provide a frame of reference for the case study at the centre of this thesis. Plissè SpA is an Italian medium-sized firm from the Veneto region, which operates in the medium-high women fashion industry. It represents a noteworthy example of an Italian SME that decided to venture in China, choosing some Tier 2 cities as locations to establish its mono-brand stores. The analysis of the company strategic choices and its performance in the market of Tier 2 cities will help understanding the factors that could determine the success in such market, also providing a reference for other Italian SME in the women fashion industry.