BEIJING: Handuyishe, the successful Chinese online-only fashion brand, is aiming to convert itself into an "internet brand incubator" as it pursues an ambition of building an ecosystem cultivating internet brands.
Founder and CEO Zhao Yingguang outlined a four-stage strategy to CKGSB Knowledge, moving from an initial mono-brand era through a multi-brands one to its current incubator period; he hoped the fourth 'ecosystem' era would emerge in 2016.
And he repeated his intention to keep Handuyishe an online pure-play. "Every brand has a different mission," he said. "For Handuyishe, since we are not an apparel company but an "internet brand incubator", our mission is to help more brands develop."
Major global businesses such as Mondelez and PepsiCo have also explored the use of incubators, partnering with start-ups to develop innovative digital communications and business strategies for their own brands.
Zhao's approach differs in that he is offering fashion designers help with such things as sourcing of materials, manufacturing and marketing in order for individual designers' creations to become sub-brands. Ultimately, designers become entrepreneurs and Handuyishe becomes a platform
"We've successfully launched 22 brands on our platform," Zhao reported.
It helps, of course, that Handuyishe is already a major name, selling apparel worth $45m on Singles Day in 2014, just seven years after it started.
Zhao explained how he had approached brand-building in an online-only environment, focusing initially on product quality.
"Three components that determine an online brand are customer recognition, loyalty and reviews," he said. "Customer recognition can be achieved by the product and user experience."
He has also worked closely with celebrities, a strategy he suggested was important in brand positioning.
Customers of physical stores can make judgements on brand positioning based on store location, look and ambience, while online brands can often appear similar.
Linking with celebrities, he argued, "can help advertise your brand's positioning as each star has his or her own positioning. If we invite very well-known stars to be our spokespersons, then our brand image will improve substantially."
Data sourced from CKGSB Knowledge; additional content by Warc staff