Canada-based fashion footwear, handbag and accessories company Aldo has made an ambitious comeback to the China market by opening a flagship store in Shanghai on June 15.
The company plans to operate about 75 stores in China and expects up to 10 percent of its global revenue to come from China in the coming decade, said its founder.
Aldo had a branch in China in 2018, but closed all its operations, including retail stores in the country, in 2019 due to changes in the Chinese market dynamics and consumer demands.
Since then, it has taken cognizance of China”s rising middle-income group and Chinese people’s pursuit of a better life, said Aldo Bensadoun, founder of Aldo.
“We are very bullish and confident about the Chinese market. Basically, we want to open about two or three stores per year. In the beginning, we want to go very slowly, making sure that we serve our customers properly … Eventually, we will have about 75 stores in China,” Bensadoun said during an exclusive interview.
Bensadoun said today’s retail industry comprises both brick-and-mortar and e-commerce sectors, which Aldo will explore in China. Before opening the 151-square-meter store in Shanghai, the company had launched its Tmall flagship store in April.
Bensadoun said Aldo will seek about 70 percent of total sales revenue in China from online sales, against a global target of between 35 percent and 40 percent.
Aldo operates about 2,000 stores in 110 countries, with the United States as its largest market and the Middle East, Europe and Canada as other key markets.
Bensadoun said he is aware of China’s tremendous market potential and strong growth, and hoped China can account for between 5 percent and 10 percent of the group’s global revenue within the next 10 years.
China’s strong economic growth and huge consumption demand, backed by its gigantic population and ever-growing middle-income group, have given Aldo confidence to pursue rapid development of its business in the country.
“Obviously, China is a huge market. It’s a wonderful market, and Chinese people are wonderful people … They (have) an extremely good sense of fashion. The way they dress, the way they feel about the fashion are all incredible and even influence our own designs,” said Bensadoun.
The rationale for choosing Shanghai for the comeback was inspired by the eastern cosmopolitan city’s long history of being a center for trade, commerce and fashion of China, he said.
Shanghai boasts a long-standing charm for global brands. More than 4,500 brands from home and abroad made their China debut in the city between May 2018 and December 2023. Some 5,840 “first stores” of various levels were opened across Shanghai during the same period. Typically, a first store is a brand’s first brick-and-mortar shop in a specific area, city, country or region.
More than 80 of the 5,840 first stores in Shanghai were also the first ones not just in China but across Asia or beyond, said Zhu Min, director of the Shanghai Municipal Commission of Commerce.
Shanghai’s ambition of building itself into a highland of brand debuts was well received as 489 new first stores were opened from January to April, including three first stores across Asia or beyond, 55 debut stores in China or the Chinese mainland, hitting records in terms of both quantity and quality, said Ju Xinping, an official from the Shanghai Municipal Commission of Commerce.
China’s rapid economic growth and fast consumption upgrade offer bright market prospects for international brands. In addition, Chinese consumers’ willingness to try new consumption modes and innovative products encourages multinational companies to explore here, said Qi Xiaozhai, vice-chairman of the Commerce Economy Association.
Shanghai’s fine business environment and international business offerings make it an ideal place for global brands to start their journey in China, Qi said.
For Aldo, finding a reliable partner with an expertise in e-commerce is critical to reaching its ambitious goals, but building a perfect partnership that shares the same value was full of ups and downs.
“Aldo has previously made several attempts in finding a partner in the Chinese mainland and Hong Kong, and once opened a branch in China in 2018,” said Qiu Wenbin, founder, chairman and CEO of Baozun Inc, an e-commerce service provider for brands.
Bensadoun said he expects their cooperation will be a process of learning from each other. Aldo learns from Baozun how to operate an e-commerce business, and Baozun learns from Aldo how to run a brick-and-mortar store.
In 2013, Aldo opened its global sourcing center in Dongguan, Guangdong province, in charge of the company’s global suppliers, including its nearly 100 suppliers in China.
According to Bensadoun, 80 percent of Aldo’s 60 million products produced annually are managed by this sourcing office in Dongguan, including 60 percent that are produced by suppliers in China. The office also works with design teams in Montreal and London by taking responsibility for 90 percent of the products’ design, research and development.