When Radley was bought by private equity firm Bregal Freshstream in 2016, the business was well-established in the UK, but under-represented internationally, writes CEO Justin Stead.
When Radley was bought by private equity firm Bregal Freshstream in 2016, the bag brand was well established in the UK, but under-represented internationally. With this in mind, we identified several key markets that we felt had strong potential: mainland China, the US, Japan and Australia. As the number-one luxury market in the world, China was crucial. We launched on [Alibaba-owned Chinese ecommerce platform] Tmall in 2017 and debuted on JD.com last week.
We had a clear opportunity to stand out through our product, London provenance, Scottie dog logo and the brand’s playful character. This is especially important in China, as the market is so oversaturated. It is important to offer a point of difference and give customers there a reason to shop.
That said, we were careful not to over-commit at first. Many businesses have lost money by over-investing without fully understanding the Chinese consumer. The initial sales targets we set were realistic and sensible.
At first, our focus was to capitalise on the increasing purchasing power of the Chinese middle class, which was driving interest in more premium goods and ensured that Radley’s investment was low risk. Operating in such a crowded and fast-moving space requires businesses to have a resolute understanding of who their customer is, what their brand stands for and what sets it apart from rivals.
Radley’s goal is to create a brand that is consistent, that offers great quality and value, and that people trust. Our digital-led marketing strategy has played a key role in relaying our brand story and messaging to Chinese customers, and enabled us to develop a bond with them. We have further bolstered this by tapping into culturally relevant events, such as Chinese New Year, as they present an interesting opportunity to create specific, customised or limited edition product lines to mark the day and engage with Chinese consumers.
Running a successful fashion business in China requires time, focus and specialist skills, from local knowledge and nuances to speaking the language. The most important piece of advice I can offer retailers is to be patient.
We have experienced multiple challenges, but the biggest was identifying the right product for Chinese consumers. In total there are 30 municipalities and provinces, which each have their own culture – style preferences vary greatly from north to south China. Size, colour, treatment and small designations all need to be considered. One size will not fit all in the Chinese market and it takes time to get it right.
Although the economic slowdown is not affecting Radley, we are future-proofing our business in China by finding the right platforms and partners. Having a strong partner on the ground that we can trust to implement our strategy is vital.
We chose Alibaba in 2017 after it reported weekly increases in searches for Radley products on its platforms. Not only have they helped us to boost Radley’s presence in China, but we have gained a deeper understanding of the market, its shoppers and their habits. This was particularly important during our first year of trading there, as we had limited knowledge of the market.
We are going to hugely expand our online business in China. We’re planning to launch our Tmall domestic store from the beginning of October, launched our global JD.com store in China last week and the domestic Chinese JD store will follow. Vip.com and Secoo.com are also in our plan for later this financial year.
We are also planning to have bricks-and-mortar stores, but we need to find the right partner. Expanding is a continual learning curve and one that requires a total understanding of the Chinese consumer and their product desires. We still don’t know everything: it is an ongoing process, but one that is critical to Radley’s continued success.
Radley in China
- Launched: 2017
- Sales channels: JD.com and Alibaba’s Tmall
- Average customer demographic: 18-30, but the 30-37 age group is growing fast
- Key cities: Shanghai, Beijing, Guangzhou, Hangzhou, Wuhan and Chengdu