360 Market analysis – Childrenswear in China

Our client manufactures and sells high-end childrenswear and children’s accessories, but their sales in China were not as strong as they would have liked despite what seems like a strong market for children’s accessories. We conducted a 360 market analysis in order to uncover why their children’s accessories had weak sales, and we recommended strengthening their online, offline, and Zero Moment of Truth marketing strategies in China.

The China’s Market Opportunity

According to China’s National Bureau of Statistics, 30% of urban household expenditure is spent on children. Much of this spending is concentrated on what babies and small children eat, wear, and use every day. Projections indicate that growth in the children’s clothing and accessory market will be strong into the foreseeable future.

Research from HKTDC shows that urban families’ average monthly spending on children’s accessories reached RMB 347 in 2012. In first tier cities, families spent RMB 400 on children’s accessories per month.

Case Description

Our client is a high-end, multinational accessories company. They had entered the Chinese market already. But their product lines marketed for childrensold poorly, and they were not sure why. Our client wanted to better understand their current and potential customer base, and they wanted to create a marketing and expansion strategy for their operations in the Chinese market. They were looking for answers to questions like:

• Which potential consumer groups remain untapped in China?
• What are the key factors that affect the buying decisions for children’s accessories?
• How can our client more effectively reach out to key market segments in China?

What We Did

We decided on a four-step design of our research. We opened with a Market Analysis, continued with a Competitor Analysis followed by a Client Analysis. All of our conclusions were then brought together in Finalization.

• Market Analysis. We executed a Desk Research and a series of In-Depth Interviews in order to make a solid overview of the market situation.
• Competitor Analysis. We then conducted a series of Discovery Walks to have an overview understanding of the points of sale for the industry. Then we did Store Checks in competitors’ stores in order to benchmark competitors’ in-store marketing, sales strategies, and the sales speeches of shopkeepers.
• Client Analysis.First we conducted Shop Along Sessions, which help us to better understand how the shopper thinks before, during, and after her or his visit to a store. After that we held Focus Group Discussions with parents in order to do a deep analysis of their thoughts and feelings regarding how they buy children’s accessories. Finally, we conducted an On-Site Survey in order to get a broader understanding of the demographics of the target market segments.
• Finalization. Using the information gathered in the previous steps, we put together a Strategic Analysis including a list of actionable recommendations.

The most important recommendation that we gave our client was that they needed to concentrate a lot more on the Zero Moment of Truth in China, which is the point at which a consumer does research at home for what they might want to buy in the future. We also advised our client to optimize their approach in their online presence including how they present themselves on Weibo, WeChat, Baidu, and E-commerce platforms. Furthermore, we advised our client to increase their offline presence in the lives of their target demographics.