Its online Tmall store will cease all operations from December 31, with the closure following previous decisions to shut its own China website in June; end its partnership with Hong Kong-based Fung Retailing; and close down its physical stores in 2015.
While the company plans to continue shipping goods to Chinese consumers directly from its US website, several retail analysts were quick to highlight failures in its overall strategy and operations.
“Ultimately, this all comes down to the fact that Macy’s was not bringing anything unique or compelling to China,” said Neil Saunders, managing director of GlobalData Retail, in comments to Bloomberg.
“Macy’s was never really that serious about China. This was an opportunistic play designed to generate a bit of incremental income. As such, the offer was never properly optimised or invested in,” he added.
Beijing-based analyst Liu Dingding attributed the company’s failure in China to not keeping up with the fast-changing demands of consumers there, alongide not hiring more Chinese executives to learn more about how to localise and adapt to Chinese culture.
“The market in China is changing much faster than those in the US and Europe. These Western giants seem to react a bit slower than their Chinese counterparts,” Liu told the Global Times.
“[Western brands should] respect Chinese culture, hire more Chinese executives and try to adjust the way that they have operated for years back home. That’s the first step to getting a foothold in the Chinese market.”
Meanwhile, Stephen Rector, president of Bakertown Consulting and a former employee of Macy’s, told Digiday that the company had been held back by a lack of physical presence and brand recognition.
He added that Macy’s also failed to offer Chinese consumers the offline experiences they like in conjunction with their online shopping, a solution that underpins Alibaba’s successful “new retail” concept.
However, on a more positive note, he said: “I would say [Macy’s exit] is disappointing. I understand why they did it, but for other retailers it’s not a reason not to enter the market.”
Sourced from Bloomberg, Global Times, Digiday; additional content by WARC staff