The Chinese market is attractive to foreign-brand apparel manufacturers who have increasing access to the market as China’s economy has undergone a major transformation from a centrally planned to a market economy and has experienced continued growth. Because of China’s current economic transition and its status as a developing country, the channels for distributing foreign-brand apparel products to Chinese retailers presents special obstacles that foreigners may not anticipate. We detail the distribution channels for foreign-brand apparel in the Chinese market and identify problems in the channels. Because the Chinese government intervenes in the distribution channels in China, the role of the government in apparel distribution channels was also investigated. In-depth interviews were conducted with nine apparel retailers, three government officials, and one foreign-trade agent. Additionally, we surveyed 150 Beijing retailers who sell foreign-brand apparel. Contributions to the research on markets in less developed countries are addressed and implications for U.S. apparel manufacturers are presented.
Anderson, J. C., & Narus, J. A. (1990, January). A model of distributor firms and manufacturer firm working partnerships. Journal of Marketing, 54, 42-58.
2.
Bloomen, D. R. V., & Petrov, I. P. (1994). Logistics in Bulgaria: Concepts for new market expansion. International Journal of Physical Distribution and Logistics Management, 24(2), 30-36.
3.
Brown, J. R., Johnson, J. L., & Koenig, H. F. (1995). Measuring the sources of marketing channel power: A comparison of alternative approaches. International Journal of Research in Marketing, 12, 333-354.
4.
Bucklin, L. P. (1966). A theory of distribution channel structure. Berkeley: Institute of Business and Economic Research, University of California.
5.
Byrne, P., & Goh, M. F. (1995). The changing distribution landscape in Southeast Asia. Transportation and Distribution, 36(12), 64-70.
6.
CCTV news. (1999, February 11). China Central Television, Channel 4. Beijing, China.
7.
Chan, W. K. (1997). China’s retail markets are evolving more quickly than companies anticipated. McKinsey Quarterly, 2, 206-211.
8.
Chin, D., & Towler, W. (1995). Retail: Opportunities and obstacles. Institutional Investor, 29(11), 13-16.
9.
China adopted the regulations on social investigation (in Chinese, Zhong Guo Ban Fa She Hui Diao Cha Guan Li Tiao Li). (1999, August 2). The World Journal (in Chinese, Shijie Re Bao), p. B3-B3.
10.
China Business Service Center. (1998). China trade report. Retrieved August 17, 1998, from the World Wide Web: http://members.xoom.com/eastpearl/report.htm
11.
China cotton annual report. (1997). Source: American Embassy, Beijing, China. National Trade Data Bank and Economic Bulletin Board—products of STAT-USA, U.S. Department of Commerce.
12.
China opens up retail business for foreign investment (in Chinese, Zhong Guo Fa Kai Hai Wai Dui Ling Shou De Tou Zhi). (1999, July 4). The World Journal. (in Chinese, Shijie Re Bao). p. A8-A8.
13.
China strengthens control of social investigation (in Chinese, Zhong Guo Jia Qiang She Hui Diao Cha Guan Li). (1999, September 9). The World Journal (in Chinese, Shijie Re Bao), p. B3-B3.
14.
Cordell, V. V. (1993). Effects of public policy on marketing channels in transitional economies: The case of Poland. Journal of Macromarketing, 13(1), 20-32.
15.
Davies, K. (1993). Trade barriers in East and South Asia: The implications for retailers. The International Review of Retail, Distribution and Consumer Research, 3(4), 345-365.
16.
Deng, S., & Dart, J. (1995). The impact of economic liberalization on marketing practices in the People’s Republic of China. European Journal of Marketing, 29(2), 6-22.
17.
Department of Commerce. (1998a). Market development reports. Retrieved August 17, 1998, from the World Wide Web: http://www.statusa.gov/
18.
Department of Commerce. (1998b). National trade estimates report on foreign trade barriers: People’s Republic of China. Retrieved March 8, 1999, from the World Wide Web: http://www.stat-usa.gov/
19.
Department of Commerce. (1999a). China: Marketing U.S. products and services: Country commercial guides. Retrieved March 17, 1999, from the World Wide Web: http://www.stat-usa.gov/
20.
Department of Commerce. (1999b). China: Retail sector. Retrieved December 20, 2000, from the World Wide Web: http://www.stat-usa.gov/
21.
Department of Commerce. (1999c). China: Retail sector overview. Retrieved April 20, 2000, from the World Wide Web: http://www.stat-usa.gov/
22.
Department of Commerce. (1999d). Country commerce guides. Retrieved October 10, 1999, from the World Wide Web: http://www.stat-usa.gov/
23.
Department of Commerce. (1999e). Trade balance report. Retrieved October 10, 1999, from the World Wide Web: http://otexa.ita.doc.gov/tbrimp.htm
24.
Dickson, M. A., Lennon, S. J., Montalto, C. P., Shen, D., & Zhang, L. (2000). Competitiveness of U.S. apparel in China. Paper presented at the annual meeting of the International Textile and Apparel Association, November 2000, Cincinnati, OH.
25.
Dwyer. F. R., Schurr, P. H., & Oh, S. (1987, April). Developing buyer-seller relationships. Journal of Marketing, 51, 11-27.
26.
Goldman, A. (1981, Summer). Transfer of retailing technology into the less developed countries: The supermarket case. Journal of Retailing, 57, 5-29.
27.
Guo, Q., & Harris, P. (1990). Retailing reform and trends in China. International Journal of Retail and Distribution Management, 18(5), 31-39.
28.
Hong Kong Trade Development Council. (1999). Import regulation and procedures of Chinese Mainland. Retrieved April 20, 2000, from the World Wide Web: http://www.tdctrade.com/main/chiimp.htm
29.
Hu, Q. Y. (1994). China’s consumer market: Shanghai consumers’ attitudes toward foreign-brand and Chinese-brand apparel. Unpublished doctoral dissertation: University of Missouri-Columbia, Columbia, MO.
30.
Interim provisions on guiding foreign investment direction, Decree No. 5 of the State Planning Commission and the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Cooperation. (1995). In State Finance and Trade Research Department (Ed.), Handbook of foreign economic law (pp. 562-586), Beijing, China: Publishing House of Law.
31.
Koves, A., & Marer, P. (1991). Economic liberalization in Eastern Europe and in market economies. In A. Koves & P. Marer (Eds.), Transformation in Socialist and market economies (pp. 15-36). Boulder, CO: Westview Press.
32.
Kristoff, N. D., & Wudunn, S. (1994). China wakes. New York: Times Books.
33.
Langley, C. J., & Holcomb M. C. (1992). Creating logistics customer value. Journal of Business Logistics, 13(2), 1-28.
34.
Law of the People’s Republic of China on Chinese-foreign equity joint ventures, Adopted 5th cong., 2nd Sess. (1979), Amended 7th Cong., 3rd Sess. (1990). In State Finance and Trade Research Department (Ed.), Handbook of foreign economic law (pp. 347-376), Beijing, China: Publishing House of Law.
35.
Leonidou, L. C. (1995). The Saudi distribution system: Structure, operation and behavior. Marketing Intelligence and Planning, 13(11), 27-35.
36.
Letovsky, R., Murphy, D. M., & Kenny, R. P. (1997). Entry opportunities and environmental constraints for foreign retailers in China’s secondary cities. Multinational Business Review, 5(2), 28-40.
37.
Li, L. (1996, January). China’s economic reform and opening. Beijing Review, 1415-1417.
38.
Lin, T., & Chen, K. (1998). Foreign apparel enters the Chinese market: Background (In Chinese, Guo Wai Shi Zhuang Jing Ru Zhong Guo Shi Chang De Bei Jing). Unpublished paper. China National Clothing Design and Research Center, Beijing, China.
39.
Luk, S. K., Xu, Y. Z., & Ye, W. C. (1998). Distribution: The Chinese puzzle. Long Range Planning, 31(2), 295-307.
40.
Lyle, G. (1996). Consumer goods and retailing in the PRC: Getting U.S. goods on the shelves. Business America, 117(1, 2), 12-13.
41.
Mallen, B. (1973, July). Functional spin-off: A key to anticipating changes in distribution structure. Journal of Marketing, 37, 18-25.
42.
McClain, C., & Cheng, H. S. (1995). China’s foreign trade and foreign investment law. Retrieved August 17, 1998 from the World Wide Web: http://www.dae.com/1990/ISUPAP11.htm
43.
Meshkat, H., & Ballou, R. H. (1996). Warehouse location with uncertain stock availability. Journal of Business Logistics, 17(2), 197-216.
44.
Olsen, J. E., & Granzin, K. L. (1990, Fall). Economic development and channel structure: A multinational study. Journal of Macromarketing, 10, 8-23.
45.
Raiklin, E., & Yousefi, M. (1994). A note on misconceptions about market and non-market economies. International Journal of Social Economics, 21(5/6), 56-60.
46.
Rawwas, M. Y. A., Vitell, S. J., & Barnes, J. H. (1997). Management of conflict using individual power sources: A retailer’s perspective. Journal of Business Research, 40(1), 49-64.
47.
Reinganum, J., & Helsell. T. (1994). To market, to market. The Chinese Business Review, 21(1), 30-34.
48.
Samiee, S. (1993). Retailing and channel considerations in developing countries: A review and research propositions. Journal of Business Research, 27(2), 103-129.
49.
Samli, C. A., & Kaynak, E. (1984). Marketing practice in less developed countries. Journal of Business Research, 2(1), 5-18.
50.
Schavey, A. (1996). Strategies for overcoming obstacles and succeeding in China’s retail market. East Asian Executive Reports, 18(6), p.9-9,11-11.
51.
Shen, D. (1999). Chinese consumers and US-made clothing: A cultural perspective. Unpublished doctoral dissertation, The Ohio State University, Columbus, OH.
52.
Sternquist, B. (1998). International retailing. New York: Fairchild Publications.
53.
Sternquist, B., & Qiao, Z. X. (1995). China: The planned to free market paradigm. International Journal of Retail and Distribution Management, 23(12), 21-28.
54.
Taylor, S. J., & Bogdan, R. (1984). Introduction to qualitative research methods (2nd ed.). New York: Wiley.
55.
U.S. Embassy, Beijing. (1999). Country commerce guide, China, fiscal year 2000. Retrieved April, 20 2000, from the World Wide Web: http://www.stat-usa.gov/
56.
Vernon-Wortzel, H., & Wortzel, L. H. (1987). The emergence of free market retailing in the People’s Republic of China: Promises and consequences. California Management Review, 29(3), 59-76.
57.
Williams, L. R. (1994). Understanding distribution channels: An interorganizational study of EDI adoption. Journal of Business Logistics, 15(2), 173-203.
58.
Xinhua News. (1998, January 15). The World Journal (in Chinese, Shijie Re Bao), p. A8-A8.
59.
Xinhua News Agency. (2000, July 5). China’s economy shows positive trend. Retrieved July 6, 2000, from Lexis-Nexis on-line database.
60.
Xu, X. (1995). Status quo and prospect of China’s apparel and accessories imports. Paper presented at the annual conference of CHIC’95 (China International Apparel & Accessory Fair), The Development Trends of China’s Garment Market of the 21stCentury, Beijing, China.
61.
Yamin, M. (1997). The dual risks of market exchange: The roles of marketing institutions and activity in the transition process. International Journal of Entrepreneurial Enterprise & Research, 3(1), 19-29.
62.
Yang, G. (1995, Jan. 30-Feb. 5). China’s rise: Threat or not? Beijing Review, pp. 23-25.
63.
Zhao, Y. C., Jiang, D. F., & Shen H. J. (1998). The updated regulations and policies on exports and imports in China (In Chinese, Zui Xin Jing Chu Kou Mao Yi Jian Guan Zhuo Shi Yu Zen Ci). Beijing, China: Aviation Industry Press.
64.
Zhongyang News. (1999, October 19). The World Journal (in Chinese, Shijie Re Bao), p. A7-A7.
65.
ZuHone, L. M., & Morganosky, M. A. (1995). Exchange relationships between apparel retailers and manufacturers. Clothing and Textiles Research Journal, 13(1), 57-64.
