South Korean fashion brands already are among the most popular with China’s online shoppers, and Alibaba Group holding Ltd.’s Tmall.com went to Seoul last week to recruit more retailers and brands to sell on its online marketplace.

About 1,000 South Korean fashion retailers and brands attended the event, seeking to sell more to China’s ever-growing army of web shoppers: 413 million as of the end of 2015, according to the China Internet Network Information Center. Many of the companies attending were members of the Korea Fashion Association or the business council of DongDaeMun, a major shopping district in Seoul.

More than 600 Korean brands already sell on Tmall.com, the Alibaba marketplace that caters to larger brands, allowing them to set up their own web stores, as opposed to the sprawling bazaar of Alibaba’s bigger Taobao online shopping portal. Some 50,000 apparel retailers and brands sell on Tmall, which accounted for 76% of online apparel purchases in China in 2015, according to China research company iResearch, when excluding sites like Taobao that allow individuals as well as small companies to sell online. 

South Korean brands are among the most popular on Tmall Global, the section of Tmall designed for foreign companies without a physical presence in China, along with those from the United States, Japan and Germany. South Korean fashion brand sales are growing rapidly on Tmall, according to Alibaba, which did not provide details.

Many brands from South Korea and other countries rely on Chinese e-commerce service companies to help them operate their e-commerce business in China. For example, South Korean lingerie brand Good People and apparel brand Chuu both recently signed agreements with Chinese fashion e-retailer Handuyishe E-commerce Co. Ltd., which will assist them in selling online in China. Handuyishe, an e-retailer itself that is No. 163 of Internet Retailer 2016 China 500, also provides services to other web merchants.

“It is no doubt that today Chinese consumers are spending a lot on fashion. We realize now is a good time to promote our brand to China’s young consumers,” Yoon Woo Hwan, CEO of Good People, said in a statement, “We plan to introduce a new brand in China. Our company focuses on developing the product, while Handuyishe will handle marketing and operations.”

Started as a small store on Taobao.com in 2008, Handuyishe now employs 2,600 workers and manages the online business for 40 fashion brands, including 20 of its own private-label brands. Handuyishe services include product manufacturing, marketing and logistics.

“We develop about 30,000 new products each year, and Handuyishe plans to manage 1,000 brands in the future,” a Handuyishe spokesman tells Internet Retailer.  

Handuyishe’s sales reached $192.6 million in 2015, a 50.6% increase from $127.9 million a year earlier. Handuyishe means “Korean-style clothing” in Chinese and that was initially the company’s focus, although now it sells a wide variety of styles. In order to compete in China with such fashion brands as Japan’s Uniqlo, Spain’s Zara and China’s Inman, Handuyishe says it has created 300 product teams that have the autonomy to react quickly to market demand. Each team typically has five members who can decide how to design, market and sell their products while sharing resources like web development and logistics with other teams.

Many brands from all over the world are selling online in China, including Uniqlo, Gap of the United States, and Zara. A recent entrant is Monki, a youth-oriented apparel brand created by Swedish clothing retailer H&M, which recently began selling online in China through a branded store on Tmall.com. 

(Source: internetretailer.com  Author: FRANK TONG)