Inside Desigual's plan to conquer Japan
Desigual is targeting further Japanese growth. Sales in this market have increased fourfold over the past seven years, with Japan becoming the largest market for the brand outside Europe. Exciting and new, the country is a notable challenge for the company, which has already started reaping the rewards of its efforts.
As Desigual celebrates the reopening of its Tokyo store, the first in Asia to feature the new positioning, FashionNetwork.com talks with those who are in charge of driving the brand’s strategy in the market: Jordi Balsells (Vice President Asia Pacific, Americas and CEEMEA), Guillem Gallego (Chief Marketing Officer) and Balazs Krizsanyik (Country Manager Japan).
FashionNetwork.com: When did Desigual enter the Japanese market and how has the brand evolved since then?
Jordi Basells: In 2011 we opened a subsidiary in 2011 and two stores in the Fukuoka area. We had previously established a presence through the wholesale channel with a local distributor. But it wasn’t until 2010 and 2011 that we established ourselves with our own office and team. We have continued opening stores and currently operate 18 sites in Japan.
FNW: Why has Japan become such a key priority for the business?
Guillem Gallego: It is an important market, and not just because of its business opportunities, but also because it is constantly setting trends and we can learn from this culture. Japan is also going through an exciting time, with the Olympic Games taking place there next year. The market is gaining plenty of global attention and we are enjoying positive growth there.
FNW: Coinciding with the release of the company's latest results, Alberto Ojinaga said that Japan is the fifth largest market for the brand. What does this mean in terms of sales?
JB: [Japan] is also the largest market outside Europe. It is clearly a growing market, where we operate an omnichannel model that supports all channels. In terms of revenues, it has gone from generating 4.6 million euros in 2011 to 25.1 million euros in 2018, which demonstrates our strong and sustained growth. 2019 is also showing signs of a positive performance.
FNW: What are your plans for the store portfolio?
JB: We want to open at least one more store in the most premium areas and strengthen our presence and availability through local partners.
Balazs Krizsanyik: The Tokyo flagship, our largest store in Japan, reopened its doors two weeks ago. It is the second store to open with the new brand concept, following a further site in Fukuoka. Further openings are planned in Nagoya, the third largest city in Japan, or in Ginza, Tokyo in 2020.
FNW: What role does omnichannel play in Desigual’s expansion in Japan?
JB: Japan is the only country in Asia where we have a presence across all channels. And we have a strong e-commerce strategy, trading from own website as well as with local platforms such as Zozotown, the leading fashion retailer, Rakuten and Amazon. Omnichannel is the key to our success in this market and we have formed good partnerships with local teams and partners from the beginning.
FNW: What are the main characteristics of Japanese consumers and how do you win them over?
BK: Japanese shoppers are very different. Our positioning in Japan has always been a little more niche than in Europe, more premium. Our customers are mostly aged 35 to 45, and the majority are women, although 20% of sales come from the men’s division - a much larger share than we experience in Europe. Japanese consumers appreciate our storytelling strategies, they need an important reason to buy from a brand. We have managed to win them over with our history, links with the city of Barcelona, and our heritage.
FNW: And on the commercial side of things?
JB: The constancy we have showed in the market, maintaining a stable and continuous presence, is greatly appreciated by any market. But this is particularly important in Japan, where trust is everything.
FNW: What is the premium positioning all about?
JB: Because we are a European brand in Japan, our proposition becomes slightly more premium. For example, the Christian Lacroix capsule has a higher price point and sells very well, so the assortment is slightly different.
FNW: What are your marketing strategies in such complex markets?
GG: You have to make an in-depth assessment of the situation in each country. We believe that the right business formula is ‘global-local’. We are currently working on our China launch, establishing contact with local partners to understand the best way to approach it. We are fully aware that this wouldn't be easy if tried to enter without a plan.
BK: In Japan, our marketing strategy is a little different. Print media is still going strong there, so we are investing much more in print than we do in Europe or the United States. Meanwhile, 40% of our investment is dedicated to online.
It is also worth mentioning our CRM (Customer Relationship Management) efforts. Japanese consumers tend to be very loyal and we have more than 220,000 followers, so investing in CRM (Customer Relationship Management) is a very strategic move.
FNW: What role do fashion shows and fashion weeks play in Desigual’s plan?
GG: We have embraced a renewed strategy. We realised that fashion weeks are full of brands fighting for attention. Instead, we are showing at different times of the year, linked to culture and art, such as Milan’s art and design week in April, and in Barcelona in June to coincide with Sonar and Primavera Sound. Additionally, Miami Basel has become a very important platform for us and for other brands including Nike, Gucci and Prada.
FNW: And what about sustainability?
GG: 11% of the Spring Summer 2020 collection has been made using sustainable fabrics (30% of the Sports collection, 15% of the Denim range, 20% of Man and 15% of Kids). We are currently reviewing which suppliers and materials we want to work with. And the goal is for these numbers to continue to rise season after season.
FNW: What are the brand’s future plans in Asia and Japan?
JB: We have a presence in 12 Asian markets with a total of 23 of directly managed stores. We want to continue strengthening our business in China and expanding our presence in Singapore, India and Malaysia.
JB: We will continue to place value on the country as a strategic market. We want to drive further growth and cement its position as Desigual’s fifth largest market and the largest in Asia.
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