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Urban Fashion Fair Shanghai

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Novo mania -_come_join_us![1]

  1. 1. 01 MISSION STATEMENT 02 WHY CHINA? 03 WHY NOVO MANIA? 04 HOW DO I DO BUSINESS? 05 ONE-STOP SHOPPING 06 FOLLOW-UP AGENDA
  2. 2. OUR MISSION IS TO PROVIDE BOTH BRANDS AND BUYERS A GATEWAY TO NEW MARKETS Come join us at Shanghai Mart from March 9-11, 2011 MISSION STATEMENT
  3. 3. YOUR PERSONAL INVITATION
  4. 4. 01 MISSION STATEMENT 02 WHY CHINA? 03 WHY NOVOMANIA? 04 HOW DO I DO BUSINESS? 05 ONE-STOP SHOPPING 06 FOLLOW-UP AGENDA
  5. 5. CHINA’S RAPIDLY GROWING MARKET • Total retail sales of consumer goods reached 12.5 trillion RMB (1.4 trillion EUR; 1.8 trillion USD) in 2009, an increase of 15.5% YoY. • In the first five months of 2010, total retail sales climbed by 18.2% to 6 trillion RMB (695 billion EUR; 881 billion USD). • China’s retail sales are predominantly urban. Urbanities comprised 46.6% of the total population but contributed 67.9% of total retail sales in 2009. • Average per-capita disposable income for urban households was 17,151 RMB in 2009, an increase of 9.8% YoY. • Retail sales for clothing increased by 20.8% in 2009 and 23.9% for the first five months of 2010. WHY CHINA? Source: National Bureau of Statistics, PRC
  6. 6. Note 1: CTR Market Research. The three drivers are High income, Female and Post 80’s generation WHY CHINA? THE “POST 80s URBAN YOUTH” AN ATTRACTIVE RETAILING SEGMENT • The “Post 80’s Generation,” under the age of 30, comprises 512 million people, of which about 239 million live in urban cities. • This group is becoming one of three major consumption drivers in urban China.1 • Due to the one-child policy, urban youth in China are generally only children, with financial support from 6 adults – parents and two sets of grandparents. • The “Post 80’s Generation” also has the highest income level and income growth among all age groups. • As a group, they are highly educated and willing to spend money on differentiation and individuality.
  7. 7. Source: CNNIC, 2009 THE “POST 80s URBAN YOUTH” UNIQUE CONSUMPTION HABITS • The “Post 80’s generation” prefers spending more than saving and is more comfortable using credit cards and purchasing online. • The “Post 80’s generation” are very active online and comfortable with online shopping. – This group makes up most of the leading Chinese B2C users. – More than half of their friends are online friends. • They are brand-focused, tending to purchase and consume products that express their individuality and make a statement about who they are – to their friends and to the world at large. • Young customers aspire to a certain “lifestyle” and are open to influence and inspiration from well-positioned brands of high quality and utility. WHY CHINA? Source: MTV Circuits of Cool. 16 Country Qualitative & Quantitative. 2007
  8. 8. BROAD DEPARTMENT STORE FOOTPRINT BUT LITTLE DIFFERENTIATION… • Department stores have enjoyed a 30% compounded annual growth rate from 2003 and 2008. • The competitive landscape for department stores in China is highly fragmented, with no significant national leader. • In the past, department store operators paid little attention to differentiation and brand management. • The basic revenue streams for department stores are quite similar, with nearly 70% of revenue generated from store-in-store sales. • Young and trendy brands as well as urban youth are under-served by current department store players. • The market is in need of youth-focused shopping destinations that provide differentiated shopping experiences. WHY CHINA? Source: National Bureau of Statistics of China, China Chain Store and Franchise Association and Deloitte Note 1: Average of Intime, Golden Eagle, New World Department Store and Parkson Source: Financial reports from respective companies THE OPPORTUNITY TO STAND OUT
  9. 9. SIGNIFICANT RETAIL PROPERTY SUPPLY COMING ONLINE WHY CHINA? Source: NOVO Concepts SUPPLY OF SHOPPING MALLS FROM MAJOR DEVELOPERS, 2010-2012 • Over 180 shopping mall developments, with sizes ranging from 100,000 sqm to 250,000 sqm are planned for the next 5 years, 80 of which will be completed within the next 3 years. • More high quality, large shopping centers/malls are now under construction or under way in many Tier 2 cities such as Hangzhou, Chengdu, Nanjing, Shenyang, Wuhan, etc. • To raise the reputation as well as to reduce vacany risk of new shopping malls, developers are focused on anchor/semi-anchor tenants to differentiate themselves. • Malls are realizing the importance of having a dedicated section to draw urban youth traffic and serve this important segment.
  10. 10. 01 MISSION STATEMENT 02 WHY CHINA? 03 WHY NOVO MANIA? 04 HOW DO I DO BUSINESS? 05 ONE-STOP SHOPPING 06 FOLLOW-UP AGENDA
  11. 11. ALMOST 8000 VISITORS IN 3 DAYS MARCH 2010 TRADESHOW TAKEAWAYS - WHO CAME? WHY NOVO MANIA?
  12. 12. MARCH 2010/WHO EXHIBITED?
  13. 13. 2011 TRADESHOW DATES March 9-11, 2011 WHY NOVO MANIA?
  14. 14. MARCH 2011 TRADESHOW HIGHLIGHTS • Who are we expecting to attend? – 3000+ potential retail buyers, distributors, agents & merchandisers – 2500+ department stores, chains, shopping malls & multi-brands from all over China – 500+ media resources – Numerous leading influencers in the fashion trade • Who are we expecting to exhibit? – Leading international brands from Europe and the US – Select brands from Asia (e.g. Japan, China, Korea) • Sponsorship opportunities – Partnerships with multinational companies with complementary products and services • Strategic partners – Live performances from local dance studios and artists – Food provided by trendy Shanghai eateries WHY NOVO MANIA?
  15. 15. 01 MISSION STATEMENT 02 WHY CHINA? 03 WHY NOVO MANIA? 04 HOW DO I DO BUSINESS? 05 ONE-STOP SHOPPING 06 FOLLOW-UP AGENDA
  16. 16. DIFFERENT WAYS TO DO BUSINESS IN CHINA • Wholly-Owned Foreign Entity (WOFE) - WOFEs are limited-liability corporations organized by foreign nationals and capitalized with foreign funds. Involvement of a mainland Chinese investor is not required, unlike most other investment vehicles. . • Franchising - An alternative to building 'chain stores' that are company-owned to distribute goods and avoid investment and liability over a chain. The franchisee is said to have a greater incentive than a direct employee because he or she has a direct stake in the business. • Licensing - A licensor may grant permission to a licensee to distribute products under a trademark. With such a license, the licensee may use the trademark without fear of a claim of trademark infringement by the licensor. • Joint Venture (JV) - Equity Joint Venture (EJV) – EJVs are incorporated in both Chinese and in English, with limited liability. Prior to China’s entry into WTO, and the creation of the WOFE, EJVs predominated. In the EJV mode, the partners share profits, losses and risk in equal proportion to their respective contributions to the venture’s registered capital. These escalate upwardly in the same proportion as the increase in registered capital. - Co-operative Joint Ventures (CJV) - CJVs may have a limited structure or unlimited structure. Limited - the foreign investor provides the majority of funds and technology and the Chinese party provides land, buildings, equipment, etc. However, there are no minimum limits on the foreign partner which allows him to be a minority shareholder. Unlimited - partnership where the parties jointly incur unlimited liability for the debts of the enterprise. HOW DO I DO BUSINESS? DIFFERENT OWNERSHIP STRUCTURES TO CHOOSE FROM
  17. 17. Distribution model •Owned store •Shanghai headquarters •JV experience in Japan, Korea •Owned stores in BJ/SH; began franchising •Provided franchisees basic training •Regulations limited further expansion •Started looking for partner •Owned stores in BJ/SH/Dalian; franchisees in Tier 2 & 3 cities •Signed JV with China Resource (Esprit took 49% share) •Established franchisee as strategic partner – On-site management support – Close performance monitoring •Owned stores in BJ/SH/Dalian •Bought back underperforming franchised stores in Nanjing & Guangzhou Footprint •BJ/SH •Prime locations •Major BJ/SH presence •Entered 6 Tier 2 cities with franchisees •Entered Dalian with own stores •Presence in 86 Tier 2 & 3 cities •Present in ~107 cities across Tier 1, 2, 3 & 4 cities CAGR (98-07) 0 10% Entry Establishment Partnership National roll-out Established JV with CRE Began local partner search 500 1500 2500 3500 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 (93-98) CAGR 37% ESPRIT’S CHINA BUILD-OUT (RMB MILLIONS) CASE STUDY
  18. 18. 01 MISSION STATEMENT 02 WHY CHINA? 03 WHY NOVO MANIA? 04 HOW DO I DO BUSINESS? 05 ONE-STOP SHOPPING 06 FOLLOW-UP AGENDA
  19. 19. THE NOVOMANIA TOOLKIT • NOVO MANIA Global Support Team • Business tools – Government workshops and lectures  Registration of companies  Tags  Taxes  Customs and Clearance – Tracker service for booth attendees – Translation service • Logistical tools – Shipping – Booth setup – Rentals • Promotional tools – Advertising space – Fashion shows – Models and talent • Consulting services – Market analysis and Novo Tour – China Tier 2 & 3 City Tour ONE-STOP SHOPPING
  20. 20. FLOOR PLAN – 1ST FLOOR
  21. 21. FLOOR PLAN – 3TH FLOOR
  22. 22. FLOOR PLAN – 4TH FLOOR

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