My take on US fashion
Although many GenY are cool hipsters, it’s one BIG cohort. My guess (admittedly supporting evidence would have to be found), based on probability and the sheer size of the Y demo, is that there must be a sizable market for fashionable-looking clothes with reasonable quality and good prices. The success of stores like Ross, TJ Max and Marshalls over the last decade speaks to large numbers of people shopping for bargains that still look cool. In my view, the US market breaks down something like this:
- Bargain basement = Walmart, other Supermarkets
- Next level up = Target
- Next level up = Ross, TJX (et al “branded seconds” discount stores)
- Next Level = Zara (Gap, Old Navy?)
- Next level = BanRep, …
- Next level = AnF, …
- Next level = designer labels.
Shenshi allegedly has the capability to make “virtually any design”. I interpret that as being able to also supply a range of quality from say AnF all the way down to Target. What is quality after all? “Luxury” is a better name for what most people think of as “quality”. In manufacturing terms, quality is #defects/1000, so you could have 50/1000 whether something’s made of silk or cotton, right? - yet the silk would be viewed as higher “quality”. It’s really higher luxury. I think Mr Wang is potentially sitting on a gold mine if he really does have unique supply chain relationships. However, we have to bear in mind that Zara’s two week lead times are industry-leading and they use the same factories in China, Vietnam, Philippines, Turkey, etc. as everyone else.
What it boils down to, as I tried to allude to in the Steve Jobs post, is that in a flat world, ideas stand out. The more creative the message, the more successful a company can potentially be — assuming a reasonably level playing field on the product front. Another way to put it is in a flat world, people don’t buy products, they buy the message.
