Canada Goose Set Up 3 Stores In China In Fiscal Year 2020 To Accelerate The Expansion Of The Chinese Market

Canadian geese have been popular with consumers since they entered the Chinese market. Recently, Canada goose has further locked in the Chinese market and announced plans to set up 3 stores in China in fiscal year 2020. As the world's largest luxury market, China has plenty of room for development. In the eyes of the industry, Canada goose will further slow down its performance by saving the market. According to the first quarter 2019 earnings report, Canada geese business income grew 25%, an 8 quarter minimum growth rate. The brand side expects the average annual sales growth in the next three years to be at least 20%, which is also lower than the 40.5% increase in the 2019 fiscal year. According to the analysis, the canadian goose has eased some rigid demand after entering the Chinese market. However, because of the large gap between the price and the foreign market, many consumers choose to buy channels such as purchasing, so the brand wants to speed up the expansion of the Chinese market and seek more room for profit.

China opens three stores in fiscal year 2020

The Canadian geese, who just entered China last year, were hit by consumers when they were listed, and the demand for goods sold was significantly higher than that of supply. Recently, there are reports that Canada goose plans to open 3 stores in China in fiscal year 2020. At present, Canada goose has 2 stores and Tmall flagship stores in China. In view of the global market, Canada geese still have larger room for expansion. After searching the brand website, reporters found that there are only 12 stores in Canada worldwide.

The development of Canada goose in China also started in 2018. Although it has been late in China, it has not been slow since May 2018 when it announced the China strategy. In addition to building the headquarters of the Greater China region in Shanghai, Hongkong has opened boutiques in the region and has been selling channels for the cat platform and the official website. For the first store in the mainland, the canadian goose has not only played a "flash" game, but also invited stars to help them and set up a 8 day interactive exhibition, showing that the brand attaches great importance to the Chinese market.

In the previous earnings announcement, Dani Reiss, chief executive of Canada goose, pointed out that management is now very happy about the performance of Tmall flagship store and Hongkong's first store as well as the group's progress in the market. Zhang Peiying, an honorary consultant of the China luxury Confederation, believes that the expansion of Canadian geese in China is not surprising. At present, the brand is still at an early stage of development. As a luxury brand, there is still much room for development in China.

Interest driven expansion

In fact, the canadian goose has caught the attention of consumers at the beginning of its entry into China. After the opening of the Sanlitun store, it often has long queues, and even the social platform such as jitter and so on caused a disturbance, which made the brand popular style basically sold out. On the day of its opening, all the men's clothing products in Canada goose were sold out at 4 p.m. Even in the off-season, canadian goose sales are relatively good. Reporters at the Tmall goose flagship store in Canada noted that Canada's goose list has more than 60 monthly sales of its first commodity.

But even if sales are hot and even "hard to get", sales of Canadian geese are slowing down. According to the first quarter earnings report released by Canadian geese, operating income was 156 million 200 thousand Canadian dollars, an increase of 25% over the previous year, the lowest growth rate in 8 quarters, also lower than the market expected 158 million 900 thousand Canadian dollars. In addition, Canadian geese predict that the average annual sales growth in the next three years will be at least 20%, lower than the 40.5% growth rate in fiscal 2019. At the same time, canadian goose sales increased by 15.4% during the quarter, and total expenditure increased by nearly 40%. Net profit rose from 8 million 100 thousand Canadian dollars to 9 million Canadian dollars in the same period last year.

Against this background, the expansion of Canadian geese appears to be more natural. Zhang Peiying said that since canadian goose has grown, its performance has been rising, but due to restrictions on production processes and so on, the output of the products is limited, and the prevalence of fake commodities in the market has impeded the development of Canadian geese. He said that although Canadian geese had eased some rigid demand after entering the Chinese market, many consumers still chose to buy channels such as purchasing, because the price gap with foreign markets was too large. Therefore, the brand wanted to speed up the expansion of the Chinese market and seek more room for profit.

　　 Long way to fight against counterfeiting

In Zhang Peiying's view, Canadian geese are expanding their markets in addition to increasing sales channels. Earlier, the financial business report released by Canadian geese showed that the group lost 18 million 700 thousand US dollars in the international expansion plan. The reason is that while the company is entering the global market, it is still troubled by counterfeit goods even though it spends a lot of money on counterfeiting. Previously, in just one quarter, Canadian geese had deleted 30 thousand fake online advertisements and closed 1700 fake websites.

But from the current situation, the growth space of Shanzhai brand and purchasing market still exists. Reporters found from Tmall platform that there are still a lot of Shanzhai brands selling large quantities of merchandise through the Canadian geese style and imitation trademarks at the present stage. One of the main producers of the "correct version" goose has puzzled consumers by increasing the goose discount store.

Zhou Ting, President of the luxury goods expert and Research Institute of customers, said in an interview with reporters that the canadian goose will accelerate the layout of stores in the Chinese market, allowing the brand to face the vast number of consumers in regular channels. This will help build brand credit and reduce the risk of consumers buying fake goods. The brand side also hopes to further squeeze the purchasing market through formal channels. "However, this is only limited to the brand's self owned stores. The data we have surveyed show that 85% of the luxury goods on the electronic business platform are fakes, and these fake goods are also frequently found in purchasing channels." She said, therefore, the brand wants to use formal channels to suppress the purchasing market, and solve the problem of the prevalence of counterfeit goods, but for now there is still a long way to go.

Zhang Peiying also said that the "high figure" of Canadian geese makes the price gap between China and the international market too large, which will stimulate the growth of purchasing agents. In addition, Canada goose ignores the "creativity" of Chinese Shanzhai manufacturers. He said that while Canadian geese are expanding their stores in the future, they need to start solving the supply problems before they can help brands fight counterfeit goods.