Central adjusts Lee fit as Chinese scatter
Efforts shifted to local youth demand
Central Marketing Group, the fashion and beauty arm under Central Group, is adjusting its business strategy for Lee jeans after sales between July and October significantly dropped as Chinese tourist arrivals dwindled.
Nuntawan Suwandej, the company’s senior vice-president for licensed and own brands, said sales of Lee jeans in the first half of this year grew 5%, but slowed to 3% growth for the first 10 months, as sales drastically plunged in the last four months.
“Lee jeans are considered a must-have item for almost every Chinese tourist, who spend an average of 5,000-20,000 baht per visit, much higher than the 3,000 baht per visit paid by Thais,” Ms Nuntawan said.
The price of Lee jeans here is the cheapest in the world, about 40% cheaper than China, she said.
Ms Nuntawan said despite myriad government measures to lure Chinese tourists, arrivals remain lower, with mostly groups of elderly Chinese visiting Thailand. Most elderly tourists prefer buying packed food, she said.
“The company has shifted focus to tapping into local demand by forming a synergy with Central and Robinson Department Store,” said Ms Nuntawan.
“More incentives such as special promotions are being offered, with personal stylists approaching VIP customers in provinces with high potential. These will boost the spending per head on Lee jeans to 5,000 baht, up from 3,000 baht.”
She said Thailand’s jeans market is worth 22 billion baht per year.
Levi’s controls the lion’s share at 32%, followed by Lee with 25%, and Mc Jeans and Wrangler taking about 20% each.
The jeans market is expected to grow by only 5% this year, down from a projected 7%, on par with last year’s growth.
Ms Nuntawan said in addition to Chinese tourists, higher competition from fast-fashion brands such as Zara, H&M and Uniqlo has affected the jeans segment.
“Moreover, customer traffic at department stores declined by 30-35% in the past two years thanks to the proliferation of online shopping in Thailand,” she said.
“People still come to shopping malls. But they prefer spending time at plazas to department stores.”
To cope with this shift, the company plans to open 2-3 new Lee stores and refresh seven existing stores in Bangkok and major cities, instead of opening new counter sales at department stores next year.
Central Marketing Group also plans to extend the Lee Rider collection for young customers, and deploy heavy marketing to promote sales via the e-commerce channels.
Sales of Lee jeans via e-commerce channels are expected to double to 40 million baht next year.
The company expects overall Lee sales to grow by 6% next year from 1.5 billion baht this year.