LS&Co. Ramps Up Investment In China Market

Levi Strauss & Co.
April 23, 2018

Global brands are working hard these days to capture a share of the increasingly lucrative Chinese market, and Levi Strauss & Co. is no exception.

Nicolas Versloot, managing director of Greater China at Levi Strauss & Co., chatted recently with Chinese media about how the company is stepping up investment in its China operations.

Q: Fast fashion is a trend in China, but that’s not Levi’s®. How do you respond to that?

Nicolas Versloot: We will never be a fast fashion brand. Fast fashion products are about “here today, gone tomorrow.” We sell durable products, which is the responsible thing to do from a sustainability point of view. And we have 163 years of heritage to think about.

There are lot of companies that have used the fast fashion business model that are not around today. We want to be around another 160-plus years, and becoming a fast fashion brand is not the answer. But we are able to drop new product into our stores every six weeks, so we can be very responsive to local trends when we need to be.

Q: The digital environment here in China is very different from the rest of the world. How does that affect your digital strategy?

My strategy is to place China at the forefront of investment and innovation for LS&Co. The “shop of the future” that many global retailers talk about is really the “shop of today” in China. China is much more advanced, in terms of digital penetration and social media use.

We’re starting to make the investments that we need to really put us at the forefront of omni-channel capability. Because e-commerce isn’t the destination, it’s a milestone on the journey – the destination is really omni-channel. Consumers don’t wake up in the morning and say, “I’m going to shop in a store today,” or “I’m going to go online.” They want a seamless shopping experience. That’s what successful brands of the future will be able to deliver to consumers.

Q: In the last two years in China, what have been the biggest obstacles for LS&Co. and how have you overcome them?

One of the things I learned early on is that China requires a different business model, one that is faster and more agile. The sheer scale of China means you have to try things, because if you get it right, the opportunity for growth is huge. What’s great about that for Levi’s is that two of our core values are courage and originality, so that’s already part of our DNA. But one of the challenges was to get the investment dollars to innovate.

And secondly, the economy in China is structured differently. It’s like an accordion, expanding and contracting according to demand. Let me give you a small illustration: In China, 30 seconds before it rains, people appear on the street selling umbrellas. Supply is created almost in real time, so agility becomes critical. That’s one of the amazing things about China – and our challenge is to adapt our business model to tap that opportunity.