Uniqlo launches a scholarship programme in China

Fast Retailing announces its plans to offer scholarships to university students in China, following the signing of a memorandum of understanding on December 12, 2011 between the China Education Association for International Exchange (CEAIE) and FAST RETAILING (CHINA) TRADING CO., LTD. (FR China), the operator of the UNIQLO casual clothing brand.

The Memorandum of Understanding between FR China and CEAIE, which operates under the guidance of China’s Ministry of Education, also outlines plans to offer students additional programs, including opportunities for international exchange.

FR China aims to make a significant contribution to the development of human resources in China through these efforts.

China Education Association for International Exchange (CEAIE)

The China Education Association for International Exchange is a not-for-profit organization under the guidance of China’s Ministry of Education that facilitates academic exchanges between China and other nations. CEAIE is involved in a wide range of activities with different organizations from around the world, and has formed partnerships with a number of educational, scientific and technological entities, as well as private individuals, organizations, corporations and funds that support schools and educational initiatives. CEAIE’s guiding principle is to actively promote regional and international academic exchanges, while supporting the development of education, science, technology and culture. It aims to promote mutual understanding and foster deep ties between people throughout the world.

Vogue on a high wave in China

Published by Insead Knowledge (Shellie Karabell)

The diminutive Angelica Cheung presides over Vogue China from her office in one of Beijing’s many tower blocks. She is funny, incisive, and charming  Eas only the head of the country’s most outrageously successful publication can be. This is a woman who  Ein the midst of a crisis that has pitted publishers against each other in a to-the-death fight for advertising ink  Eactually needs to continually increase editorial volume to keep up with advertising demands. Vogue China currently runs at 300 editorial pages each month, in comparison with American Vogue’s approximately 100 pages of editorial copy.

“There is so much demand for the prime advertising positions, ECheung told INSEAD Knowledge in Beijing recently, “that we’re under continuous pressure to keep up with the content. EIn short, Angelica Cheung and Voguehave detonated the explosion of China’s demand for luxury.

Vogue Chinadebuted in September, 2005  ESeptember being the month the fashion industry presents its fall-winter collections in the edition that’s fondly known as “the fashion bible Eof the year. The initial run of 300,000 copies sold out, necessitating a second printing.

Commanding the luxury market

This is not surprising for a country predicted by no less than the Hurun Report to boast nearly a million millionaires, who  Ealong with a burgeoning middle class  Eare expected to consume nearly half of the world’s luxury goods by 2020, worth some US$27 billion. Vogue’s readership reflects the profile of the Chinese luxury consumer.

“Our readership is relatively young, Eexplains Cheung. “Our target readership is mainly from 20-40, and our average age reader is about 30, and most of these are women. Obviously you have the top tier  Erich men’s wives and daughters  Ebut there is a large chunk of women who have made their own fortune. These are entrepreneurs, senior executives  Ethere are a lot of working women in our readership portfolio. And then there’s the third tier: students. Unlike the other 17Vogues in the world, we have quite a big chunk of younger readers who are not in that consumption bracket yet  Emeaning they don’t have the money to buy Chanel every day  Ebut they aspire to that kind of lifestyle. E/p>

Cheung sees her job as not just catering to Chinese luxury tastes but refining that taste and training luxury consumer wannabee’s. “What happened in China over the past five or six years is what has happened in the Western world in the past 50 or 60 years. So in a couple of years Etime, these younger readers will transform into totally different kinds of consumers, ECheung predicts. “So it is very important for the magazine to educate the readers who are not major spenders…yet. E/p>

There is a discernible pattern to initial luxury purchases among the Chinese, it seems. “China is a kind of logo-maniac kind of market, Esays Cheung. “I have friends who only knew Louis Vuitton a few years ago; today they are wearing Balenciaga, Balmain, they go to shows, they know what is going on. E/p>

High prestige brands

“For now, Western brands  Emostly European  Eare seen as the most prestigious and desirable to the Chinese, Econfirms INSEAD Assistant Professor of Organisational Behaviour Frederic Godart, a keen observer of the luxury goods industry. “So it’s not surprising that France is the favoured Chinese travel destination. E/p>

Each year brings a host of new wealthy customers to the market in China and while these new arrivals may have the money to buy luxury goods, they lack…well…taste. “When these people suddenly have money, they want to treat themselves well, and their first reaction is to buy the most obvious thing  Ewhich are the products with logos, Eexplains Cheung.

Godart elaborates: “Chinese consumers see luxury goods as a way to express status more than their own style and identity, Ehe says, “though there are signs this could change in the next decade or so as customers get more acquainted with luxury products. E/p>

Bridging that gap and educating the public is one of Cheung’s missions as Editor of Vogue. “I feel there is a certain sweetness in this lack of knowledge, Eshe says of China’s new luxury customers. “They were probably working in fields or mines just a few years ago and I feel that the attitude should be to help them, to guide them, let them experience and then they will know better what suits them. If they don’t have that entry point to experiment, they will never know. You don’t sneer at these people. You help them and through including them, you educate them better and they will become more sophisticated. E/p>

But while Western luxury goods makers are fretting over how many more shops to open and how to properly translate their names to Chinese if at all  Ethe Chinese themselves are developing home-grown luxury brands that could soon be vying for boutique space in Paris, Milan, London and New York. The Chinese competition is coming on two racks.

Home-grown brands

“There are the big fashion enterprises  EWhite Collar, Erdos, and the like, Eexplains Cheung. “They started doing basic trousers, tops, shirts and dresses and then they moved on. These are huge businesses, and they want to upgrade themselves. Then there are the new young fashion creators who themselves are the product of the new China. E/p>

So the future looks bright on both the consumer and the creator fronts in China.“Their parents were wealthy enough to send them overseas to Central St Martins (London) and Parsons (New York) to study fashion design, where they mingled with the international creative community, Esays Cheung. “When they came back, they were full of ideas and they had courage. They wanted to start their own brands. They don’t have the experience but they have the guts and the ideas and some talent. EWho are these new entrants? “Uma Wang, Esays Cheung. “I took her to Milan Fashion Week last season and she received a really good response with her collection. Then there is Zou You in Beijing  Eanother designer whom I also took to Milan. E/p>

“The middle class (in China) is growing, so the whole industry will grow along with it Eopines Cheung. “Different brands keep opening shops and somehow they all have business. …Now we are still in the first few years when people are grabbing Vuitton bags and Chanel shoes …but what will we do for the second phase? We need to anticipate what the consumers will become in ten years Etime when they already have everything. So I think the planning needs to start now. E/p>

And no doubt Vogue China will be part of the plan.

American Eagle Outfitters to land in Omotesandou, Tokyo

American Eagle Outfitters is a leading lifestyle retailer for the 15-25 year old. AEO encompasses 3 brands, over 1,000 stores globally.

The first international American Eagle location opened its doors in Dubai in the Spring of 2010. Since then the company has opened three other stores and there are many more on the way. AEO’s goal is to continue building strong business relationships around the globe to grow its brand. The international expansion strategy allows the company to significantly increase our brand reach and customer base, while creating additional opportunities for overall company growth.

American Eagle Outfitters has decided that its next step in Asia will be Tokyo. Omotesandou has been selected as the first location. The choice might be misleading as it does not match its consumers target. Companies targeting young people like Berksha (a Zara sister brand) prefer the popular Shibuya.  The strong yen is making the location particularly interesting to foreign companies.

Walmart moves on in Japan with 10 new stores

Seiyu GK, the Japanese unit of Wal-Mart Stores Inc., will start opening supermarkets again next fiscal year now that efforts to shore up same-store sales are coming to fruition, Chief Executive Officer Steve Dacus said Wednesday.

The company will launch nearly 10 supermarkets in fiscal 2012 that sell mostly foods, starting with a 2,000 sq. meter store slated to open in Tsukuba, Ibaraki Prefecture, in March under the Seiyu name.

Seiyu has not added a location since November 2008, when it opened shop in Kumamoto. Instead, it has focused on revamping existing sites.

Dacus said Seiyu has built a successful business model for food-oriented supermarkets. By thoroughly implementing the “everyday low price” strategy, same-store sales increased 1.9% on the year in the July-September quarter. Sales and profits will exceed year-earlier figures for the full year as well, he added.

Seiyu will also expand the prepared-food store chain run by a subsidiary. Altogether, the company will open 20 stores of both types next fiscal year.

H&M preparing for Indonesia and Thailand after Singapore

· H&M’s first store in Singapore opened in September and was very well received sais H&M on its 9 months business report. Increased expansion for the financial year 2011 from 250 to approximately 265 new stores net.

· The autumn collections have been well received even though the start of the season has been negatively affected by unseasonably warm weather in large parts of Europe. Sales in the period 1  E27 September 2011 increased by 3 percent in local currencies compared to the same period last year.

· COS and Monki launched online sales in 18 markets at the end of September 2011.

· Indonesia and Thailand are scheduled to become new franchise markets for H&M during 2012.

Comments on the third quarter by Karl-Johan Persson, CEO

”H&M continues to gain market share in a challenging environment for the fashion retail industry. This shows H&M’s strong market position and we see it as a proof that customers appreciate our work on the customer offering.

We have great respect for the current economic climate. In this situation, it is extra important to have a long-term perspective and to always make sure that we give customers the best combination of fashion and quality for their money in every market.

We have a strong business concept, a strong financial position and we are continuing to grow with high profitability. We are increasing our expansion for full-year 2011 to approximately 265 new stores net, from the originally planned 250. E/p>

Nestle celebrates 10 years of food science in China

Nestlé is celebrating ten years of nutrition and food science at its pioneering research and development centre in Shanghai, China.

The centre was the first of its kind in the country when it opened in November 2001.

It is part of Nestlé’s global research and development network; the largest in the food and beverage industry.

The centre specialises in the development of culinary products such as cooking sauces and seasonings; of products for Nestlé’s food business and for its ‘out-of-home Ebusiness Nestlé Professional; and of ice cream.

It also supports the development of equipment and systems, including those for coffee and other beverage brands such as Nescafé Dolce Gusto.

Flavour release technology

The scientists at the centre have helped to make traditional Chinese flavours more accessible to consumers elsewhere in the Asia Pacific region, as well as in Europe.

They created a unique flavour release technology which is used in Maggi Magic Sarapseasonings in the Philippines and in Nestlé Professional’s Maggi gravy mixes and bouillon in the United Kingdom and other European countries.

The researchers also developed a new chicken bouillon concentrate using fresh chicken stock for the Totole brand, as well as a spicy Sichuan liquid seasoning for Nestlé Professional in China.

The seasoning uses authentic flavours including chilli extract and pepper unique to the Sichuan region.

World’s first peelable ice cream

The research and development centre helps to create Nestlé products for the Chinese market and for others around the world.

Its ice cream experts and engineers helped to make the world’s first peelable ice cream.

The ice cream, which has a jelly coating that can be peeled down like a banana skin, was launched this year in Thailand as Eskimo Monkey. It is now being rolled out worldwide through different brands.

Science-driven

Johannes Baensch, Nestlé’s Global Head of Research and Development, attended a ceremony to mark the tenth anniversary of the centre in Shanghai.

“Nestlé is a science-driven company, EMr Baensch said.

“Our vision for the centre in Shanghai was for it to make advances in nutrition and food science, in collaboration with our own research and development network and with Chinese universities and research institutions, Ehe continued.

“Its accomplishments over the past ten years have exceeded our expectations. E/p>

Mr Baensch was joined by local Chinese government representatives and professors from Chinese universities and research institutes who work with the centre on long-term projects to develop nutrition and food science in China.

Healthy Kids

Teachers and children from a local primary school in Shanghai were also present at the event.

The children gave a demonstration of the cooking skills they have been learning as part of Nestlé’s Healthy Kids programme.

They also demonstrated their skills in the Chinese art of dough making; creating different types of foods and showing how they fit into a healthy, balanced diet.

In China, the Nestlé Healthy Kids programme is run in partnership with the Chinese Nutrition Society.

It aims to improve the nutrition, health and wellness of children aged from six to 12 years by promoting nutrition education, a balanced diet, and greater physical activity.

PepsiCo Foundation to scale 'WaterCredit' Across India for $8 million

PURCHASE, N.Y. and KANSAS CITY, Mo. — PepsiCo Foundation, the philanthropic arm of PepsiCo , and Water.org announced today an expansion of their partnership to scale WaterCredit, a market-driven model that will provide micro loans to families throughout India.  This expansion will help enable approximately 800,000 people to access safe water by March 2016.  The commitment is built upon a long-standing partnership between the PepsiCo Foundation and Water.org and is made possible by an $8 million grant  Ethe largest contribution by the Foundation in its 50-year history.

In 2008, the PepsiCo Foundation contributed $4.1 million to Water.org resulting, to date, in more than 250,000 people accessing improved water and/or sanitation through initiatives funded by microfinance loans.

“Water is an integral part of PepsiCo’s business ecosystem, and ensuring access to clean, reliable sources of water is vital to the health and livelihood of communities around the world,” said Indra Nooyi, Chairman and CEO of PepsiCo. “We are pleased to extend our partnership with Water.org to expand proven and innovative strategies that will bring clean water and sanitation solutions to hundreds of thousands in India, and help enable a sustainable business in the future for PepsiCo.”

“It’s been an incredible journey with PepsiCo over the past several years. Working with a partner that is so committed to overcoming the global water crisis through innovative approaches such as WaterCredit is refreshing,” said Gary White, chief executive officer and co-founder of Water.org. “PepsiCo, in what I believe captures the spirit of their own visionary culture, was willing to place an early bet on us and the WaterCredit model. That bet has resulted in incredible impact to date. Their support has been instrumental to not only Water.org but to the sector at-large in demonstrating a potentially game-changing approach to overcoming the global water crisis as we know it.”

“There will never be enough charity in the world to solve this problem. What we need to do is double down on smart solutions like WaterCredit which can rapidly scale safe water and sanitation access for families that are in desperate need right now,” said Matt Damon, actor and co-founder of Water.org. “In the U.S., we have the luxury to debate and plan for water shortages and investments in our infrastructure.  For billions, this is a daily nightmare and fight for survival. It’s visionary partners like the PepsiCo Foundation that recognize that and I hope their example inspires others to follow suit.”

“I am proud that my Clinton Global Initiative (CGI) Annual Meeting was able to serve as the catalyst for Water.org and PepsiCo’s commitment to providing clean drinking water around the world,” said President Bill Clinton.  “It is partnerships like this that have helped CGI touch 400 million people in over 180 countries.  This grant will help Water.org and PepsiCo help end the global water crisis —one of the most pressing and universal challenges of our time.”

Water stewardship is a central part of Performance with Purpose  EPepsiCo’s mission to deliver sustainable growth by investing in a healthier future for people and our planet. The PepsiCo Foundation’s support for Water.org is part of the company’s commitment to global water stewardship. As part of this commitment, PepsiCo has pledged to:

• Provide access to safe water to three million people in developing countries by the end of 2015;
• Improve water use efficiency by 20 percent per unit of production by 2015; and
• Strive for “positive water balance” in water-distressed areas.

PepsiCo and the PepsiCo Foundation have pledged nearly $34 million to safe water and sanitation initiatives in developing countries since 2005, in partnership with organizations, including the Inter-American Development Bank’s AquaFund, Safe Water Network, China Women’s Development Fund, Save the Children, International Rescue Committee, Earth Institute atColumbia University and The Energy Resources Institute.

Since 2008, Water.org and its partners in India have used the power of WaterCredit to impact twice the number of people than could have been reached using other, more traditional approaches, all while reducing the philanthropic cost per person served by nearly 50 percent.

Skechers plans to double its business in Japan over the next three to five years

MANHATTAN BEACH, Calif. –SKECHERS USA, Inc., a global leader in the lifestyle footwear industry, announced that it plans to double its business in Japan over the next three to five years with the launch of its new subsidiary, SKECHERS Japan, G.K.

The Company will assume direct distribution of its brand from Achilles Corporation as part of an aggressive expansion strategy to build its brand into one of the country’s top footwear companies. Initiatives include growing its offering of SKECHERS men’s and children’s lifestyle footwear, building the Company’s fitness division, expanding its consumer base through high-profile marketing campaigns and opening new SKECHERS retail stores across the country.

“SKECHERS has tremendous potential to grow into one of Japan’s biggest footwear brands. The country has consistently emerged as one of our top five distribution outlets, year after year, Esaid Marvin Bernstein, managing partner of SKECHERS S.à.r.l. “We’re confident that SKECHERS Japan can build on Achilles Efoundation and leverage our business by connecting with millions of consumers firsthand: presenting the collections, campaigns and store concepts that have made SKECHERS world famous. E/p>

[sws_pullquote_right]“Since we launched joint ventures in China, Hong Kong, Singapore, Malaysia and Thailand in 2007, our presence in those regions has escalated  Ewith improved brand awareness and imaging, increased points of distribution, and stronger sales. We believe SKECHERS Japan can become one of our biggest subsidiaries. E/span> [/sws_pullquote_right] “SKECHERS Estylish product and strong identity sets them apart from many other companies, Eadded Hiroshi Nakata, president of Achilles Corporation. “We are honored to have contributed to SKECHERS Efootprint in Japan by selling over 14 million pairs throughout the last 17 years, and anticipate a successful transition. E/p>

SKECHERS is establishing its new subsidiary office in Tokyo and has hired Hirokazu Iwasaki (veteran of Nike, Adidas and Puma) as SKECHERS Japan’s representative director and country manager to launch and oversee its business operations. The subsidiary is scheduled to debut its Fall/Winter fitness and lifestyle collections for men, women and children at Tenjikai in February 2012. The lines will begin shipping in July 2012, and will be supported by the Company’s extensive print, TV, outdoor and in-store marketing campaigns.

“The launch of SKECHERS Japan is the latest step in our strategy to maximize our presence across Asia, as well as to grow our international business to be approximately 50 percent of our total sales, Eadded Michael Greenberg, president of SKECHERS. “Since we launched joint ventures in China, Hong Kong, Singapore, Malaysia and Thailand in 2007, our presence in those regions has escalated  Ewith improved brand awareness and imaging, increased points of distribution, and stronger sales. We believe SKECHERS Japan can become one of our biggest subsidiaries. E/p>

Business Case of the Month: "Fashion industry: Can Asia buck the Trend?"

Every Month, The Asia Career Times introduces you to a different Business Case. This month we have selected  ”Fashion industry: Can Asia buck the Trend?”. Recent news such as the expansion of ShanghaiTang, Hermes creating its own brand in China or HuiSheShang raising funds make this case truly insightful.

Excerpt of the case:

“Well, how does one define fashion going global – when Gucci or Armani is displayed on the fashion streets of Japan and China, or when celebrities like Liz Hurley or Will Smith showcase themselves in an Asian outfit? The winds of the global fashion industry are changing their course – no more do fashion winds move only from west to east but they blow from east to west too.

Asian fashion, of late, has made its presence felt on the global ramp. For centuries, western brands like Gucci, Versace, Armani and Moet Hennessy-Louis Vuitton maintained their supremacy in the world of fashion. Innovation, rich designing and marketing expertise coupled with the presence of excellent fashion connoisseurs, enabled western brands to command a premium over the years. In comparison, the Asian fashion industry, which is still in the nascent stage of growth, has been trying vigorously to position itself among the global players.

Although oriental fashion is pulling huge crowds to its fashion weeks, the Asian fashion industry, despite talented designers and lean manufacturing processes, is failing to build a brand image in the high-end luxury segment. Factors like low brand value, lack of technical know-how, infrastructure and distribution networks have been hampering their growth opportunities globally. This case discusses the dynamics of the global fashion industry and the comparative position of the Asian fashion industry.

It also analyses the challenges and threats to Asian fashion designers and brands from global players, besides providing scope to identify the ways in which the Asian fashion industry can create an uncontested market space and make competition irrelevant. The pedagogical objectives are to: (1) understand and analyse fashion industry dynamics in a flat world (market share, profit margins, value chain, etc); (2) analyse the critical success factors for the fashion industry and discuss whether they would change when the companies go global; (3) understand the Asian fashion industry’s capabilities, and contrast them with the global fashion industry’s critical success factors; and (4) discuss the essential requisites for any Asian fashion house to go global and the strategies they should follow to position themselves so as to successfully compete with the incumbents.”

Authors: Girija Swaraj, P.; Naga Sandhya, R.

Ecch reference number: 309-022-1

Published by:

To get this case or discover the full solutions of ecch, the case for learning, click here

Uniqlo to expand its operations to The Philippines

Fast Retailing Co., Ltd. (FR) and SM Retail, Inc. have concluded an agreement to establish a joint venture with a view to developing UNIQLO’s business in The Philippines. It is the first time that the Japanese fashion leader enters into The Philippines. Recent developments included Taiwan and Thailand. The market entry is in line with Uniqlo goal to become the uncontested leader in Asia.

1. Objective of joint venture

This venture is established for the purpose of expanding UNIQLO business operations in The Philippines.

2. Overview of venture (the following is subject to change)

• (1) Business name: FR Philippines, Inc.
• (2) Location: Metro Manila (Pasay City), The Philippines.
• (3) Representatives: Katsumi Kubota
• (4) Operations: The opening and managing of UNIQLO stores in The Philippines.

3. ABOUT SM RETAIL

SM Retail, the leading retail group in the Philippines, has over fifty years experience in the industry. Its retail operations include a chain of department stores, supermarkets, and hypermarkets strategically located in key cities of the Philippines. It also has chains of specialty store formats that serve niche markets by focusing on a wide selection of merchandise for each category like home stores, toy superstores, hardware superstore like ACE Hardware, personal care store with Watson’s and appliance superstores, among others.

SM Retail is part of SM Investments Corporation, one of the country’s largest conglomerates, which also has core businesses in mall operations, banking, property, and hotels and conventions.