Tags: Gap | sales | online | china

Gap Starts China Online Sales as First Store Opens

Thursday, 11 Nov 2010 07:18 AM

 

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Gap Inc., the San-Francisco based operator of more than 3,000 clothing shops, opened its first store in China and began online sales to tap the country’s more than 400 million Internet users.

The website starts taking orders today, said John Ermatinger, president for Gap in Asia. The clothier opened a store in Shanghai today, its first in China, from where it buys 30 percent of its clothes, Ermatinger said.

The market for clothing and footwear retailers in the world’s most-populous country may expand to 338 billion yuan ($51 billion) this year, almost double the size five years ago, according to data from Euromonitor International. China’s middle-income and affluent consumers will probably almost triple in 10 years, according to Boston Consulting Group Inc.

“If you look at how fast the middle class is growing here in China, the opportunity for a brand like Gap, which really is in that in-between zone -- you could do the math,” Ermatinger said in an interview in Shanghai yesterday.

Gap faces challenges from overseas and domestic clothes retailers including Esprit Holdings Ltd., the biggest Hong Kong- listed clothier, which is also considering setting up an online sales network in China.

China’s unprecedented growth over the past 30 years saw it overtake Japan in the second quarter to become the world’s second-biggest economy. Still, per capita gross domestic product is low, ranking the nation below the 100th position in the world, Ma Jiantang, head of the National Bureau of Statistics, said in January.

China Expansion

Ermatinger declined to give a sales target for the company’s stores in China. Gap derives 12 percent of its $14 billion annual sales from outside the U.S., according to data compiled by Bloomberg.

Gap will open two outlets in Beijing on Nov. 13 and one more in Shanghai later this year, Ermatinger said. A fifth store will open in Hong Kong in the third quarter next year, he said.

Hong Kong-based women’s-shoe retailer Belle International Holdings Ltd. had the biggest market share in China’s apparel industry, at 6.5 percent in 2009, according to Euromonitor.

China had more than 420 million Internet users in June, exceeding the combined populations of the U.S. and Germany, according to data from the China Internet Network Information Center.

 

© Copyright 2014 Bloomberg News. All rights reserved.

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