VF strengthens ties with Chinese partners

VF Corporation, a 120-year old US apparel and footwear company, is seeking to establish or strengthen ties with Chinese partners to expand its presence in the local market.

Known as the parent company for established brands such as Vans, North Face and Timberland, North Carolina-headquartered VF announced on June 13 deeper cooperation with Tmall Innovation Center, or TMIC, for more consumer insights into the Chinese market.

Kevin Bailey, president of VF Asia-Pacific, said in an exclusive interview with China Daily that Tmall's data and analysis on consumer behavior is a focus for this partnership. VF also wants to bring more brands into the Chinese market with the cooperation agreement.

"Unless you are a local company, it is difficult to understand how the ecosystem works and how consumers interact," he said.

To keep pace with China's digital evolution, VF has also reached cooperation agreements with companies in various sectors including Tencent, JD and even the three-year-old short video sharing platform TikTok.

Bailey believes the experience with the Chinese online platforms will benefit VF's operation in other markets as China is "the most advanced digital marketplace in the world".

Data from the National Bureau of Statistics showed that the online retail value of apparel surged 22 percent year-on-year in 2018, becoming the most powerful driving force of China's domestic apparel market.

A survey in April by global market consultancy McKinsey said China is not only the world's largest online retailing market, but also accounts for 40 percent of the world's total consumption for textile products and apparel.

Founded in 2017, TMIC is a high-tech solution test field of Tmall, an online retail platform for branded products under e-commerce giant Alibaba Group Holding Ltd.

Their cooperation with VF will include discovering new product demand, consumer profile picture analysis and new product release.

VF has had a cooperation deal with the center since late 2017, one of the first companies in its sector with such an arrangement.

For the upcoming Single's Day shopping carnival this year, VF will team up with TMIC to optimize its product range and inventory to expand its sales.

Vans, as one of VF's reputed brands, hit a daily sales record of 100 million yuan ($14.6 million) on Tmall during last year's one-day gala.

To VF, the importance of the Chinese market is not only shown on the digital front, but also its contribution to its annual turnover.

In its 2019 fiscal report ending on March 31, 2019, the firm's annual sales revenue in China surged 22 percent year-on-year, much greater than the 15 percent annual growth rate registered in the Asia-Pacific region and the 12 percent annual growth rate posted by VF globally.

The strong growth in China backed VF's new physical store plan in the country. Bailey said they conduct twice-a-year analysis of all their brands in each city to adjust their physical store opening plans. First-tier cities aside, Bailey said that they will also expand deeper into lower-tier cities.

"To understand the lower-tier cities is to really understand the depth and the size of the market. For lower-tier cities, they have the city center where people tend to shop. For brands to be meaningful, they have to provide the full experience. To connect the physical to the virtual is critical," he said.

The importance of the Chinese market to VF is also evident in its latest personnel appointments.

Veronica Wu, who used to work at Apple Inc in China between 2006 and 2013 and later oversaw Tesla's China operations from 2013 to 2015, was elected to VF Corp's board of directors in March.