Spanish fashion retailer Mango is turning its attention to the US market for expansion after closing its remaining stores in China last year. CEO Toni Ruiz announced that the company will target states where online sales are already strong, and will offer higher-priced clothes for special occasions and parties. Mango has tried to penetrate the US market twice before, but failed. However, the brand is now gaining more recognition in the country and recently dressed actress Amber Valletta for the Oscars after-party. While Mango maintains four franchise outlets and online sales through Alibaba’s Tmall e-commerce platform in China, Ruiz said the company is “divesting in China” as it finds the market “unattractive” and not a priority for the next three years.
The Importance of US Expansion for Mango
As Mango shifts its focus to the US, the move is seen as a strategic one as it looks to strengthen its global footprint. The US market is not only the world’s largest fashion market, but it also has the highest e-commerce sales, making it an ideal target for Mango’s online sales strategy. Moreover, the US market has a diverse range of consumers with different styles and preferences, which presents an opportunity for Mango to offer a variety of fashion options.
Mango’s decision to target states where online sales are strong also aligns with the global shift towards e-commerce. The pandemic has accelerated the trend of consumers turning to online shopping, and this has resulted in a surge in online sales. According to a report by Digital Commerce 360, US online sales in 2020 increased by 44% year-over-year, reaching a total of $861.12 billion. This trend is expected to continue in the post-pandemic era, making online sales a crucial part of Mango’s expansion strategy.
Exiting China: Reasons and Implications
Mango’s decision to close its stores in China and exit the market entirely may come as a surprise to some, especially since China is the world’s second-largest fashion market. However, the company’s CEO cited the market’s unattractiveness and the need to prioritize other regions as reasons for the exit. The move follows the footsteps of other fashion brands, such as Topshop and Forever 21, that have also closed their stores in China in recent years.
Exiting China is not without its implications. While Mango still maintains online sales through Alibaba’s Tmall e-commerce platform, the company is essentially giving up on the opportunity to tap into the massive Chinese consumer market. According to a report by Statista, the Chinese fashion market was valued at $421 billion in 2020, and it is expected to grow by 5.5% in 2021.
In conclusion, Mango’s decision to shift its focus to the US market for expansion is a strategic move that aligns with the global shift towards e-commerce. While exiting China may have implications for the company’s growth potential, it allows the company to prioritize other regions that are more attractive for expansion. As Mango prepares to make its third attempt to enter the US market, it remains to be seen if it will be successful in establishing a foothold in the world’s largest fashion market.
