Mango reconsiders China strategy, halts physical retail expansion

By

Eva Gracia Morales

Translated by
Nicola Mira

Published
Jan 11, 2021

Mango has reconsidered its retail strategy in China. In 2019, the Spanish label teamed up with local group Hangzhou Jingzhe Clothing, planning to expand its retail presence in China by opening 16 new stores. In the light of the current prospects for physical retail, and of the growing influence of the e-tail channel, Mango has decided to revise its expansion plans in China.

Mango has confirmed to FashionNetwork.com that it intends to prioritise boosting its e-tail channel, as opposed to the physical store network. The Barcelona-based label already operates its own e-tail site in China, where Mango is also distributed on multibrand site Tmall, owned by the Alibaba group.

In the 2019 agreement, Mango and Hangzhou Jingzhe Clothing did envisage the possibility of expanding the label’s web presence in China, by introducing Mango on other local e-stores. “The agreement’s goal is to increase our physical and online presence on the Chinese market, one of the fastest-growing in the world,” said at the time Toni Ruiz, CEO of Mango.

Mango’s decision to shift focus and prioritise e-tail rather than brick-and-mortar retail prompted the departure of David Sancho, the label’s former CEO in China, who was in charge of the country’s store network. According to Sancho’s LinkedIn profile, the manager, who worked 17 years at Mango, is now the co-founder and chief strategy officer of Shanghai-based retail technology company Re-hub.

At the end of January 2020, when Mango was forced by the Covid-19 pandemic to close its Chinese stores, 26 of them were active in the country.

But China isn’t just a key consumer market for Mango: it is also the country where the bulk of its production is concentrated, with 242 factories that manufacture 29.48% of the group’s products. In China, Mango produces ready-to-wear items, accessories and footwear, according to documents published by the group last October in a transparency initiative, listing all the factories that are part of its supply chain.

Mango was founded in 1984, and is currently one of the world’s largest fashion groups. It is present in over 110 countries, and in the 2019 financial year it generated a revenue of €2.374 billion. Of this, 24% was generated through e-tail, one of Mango’s main growth drivers, prompting the group to refocus its China strategy on online sales. On the occasion of the 20th anniversary of Mango’s e-shop, Elena Carasso, in charge of the label's online business, indicated that, according to her forecasts, the symbolic milestone of €1 billion in digital revenue might be achieved in 2021.