Berta Casagran Costal BA Fashion marketing and communication, level 6, 2020-2021 6FAMK002C
International branding and sustainability CWK2 Linda Marie Reichard, Rut Turrรณ Pascual 1500w
DION LEE
eelnoid@ moc.eelnoid
Dion Lee
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Introduction Why expand the business?
Internal Analysis Mission and vision Organizational structure
Company's local enviornment PEST Ethics and sustainability Foreign market PEST Ethics and sustainability Competitive analysis Porter's five forces SWOT Company and product analysis Market analysis Market entry strategy Marketing strategy Target Positioning Objectives Marketing mix Product Pricing strategy Distribution chanels Communication
Sustainability strategy Operation overview Conclusion References
Introduction Dion Lee is a designer brand from Sydney. Established in 2009, he debuted at Australian Fashion Week only a year after graduating from Sydney Institute of Technology.The presentation of his collection at the Sydney Opera House in 2010 gave the brand international recognition and acclaim.In 2012 the brand showed at London Fashion Week extending its exposure and leaving a positive response from the public. A year later Dion Lee was finalist in the international Woolmark Prize, at the same time the iconic Australian brand Cue Clothing Company acquired a shareholding in the brand’s company.Dion Lee is renowned for experimental construction combined with traditional tailoring, the aesthetic is technical and sensual, combining innovative construction with a consciousness of the female body. The designer takes inspiration from the architectural realm in form mixed with feminine fluidity.
“When you're designing clothes for a body, the anatomy of the body underneath the clothes becomes a really important dialogue. So much of what we're doing is sculpting around the physical form.” Dion Lee
Why expand the business
Dion Lee is a new brand based in Australia, starting to get recognition around the world with inluencers using its appareal. With the worldwide crisis situation due to Covid19, the market who is recovering fast is China. It is an opportunity to expand now to such country and take advantage on the fast economic recovery. Store numbers for top luxury brands there rose 4 percent in the first half of 2020. Helping stoke domestic demand, the Chinese government has long pursued to bring back some of the money spent by its citizens overseas. In 2018, the goverment cut import tariffs , enabling luxury brands to reduce their China prices, while this year in Hainan, it has expanded the amount of duty-free shopping allowed from 30,000 yuan to 100,000 yuan as well as the types and number of products allowed. China, unlike many other countries where luxury spending is mainly dominated by older generations, tilts younger with consumers in luxury fashion between 25 to 35 years old. Those consumers also prefer e-commerce which fits perfectly into the current global pandemic situation. Fitch ratings INC expects China’s gross domestic product to expand 8% in 2021. The analysts expect a greater recovery in domestic demand, and a better global environment as the covid-19 vaccine is deployed more widely in the second half of next year.
Store numbers for top up luxury brands in China rose four percent in the first half of 2020
Internal analysis
"Our core principles are built on innovation, quality and staying true to what feels authentic to the brand." Dion Lee
Dion lee brand’s core values are built in quality, innovation and authenticity from the beginning, with the aim of enhancing the product while evolving Dion Lee, Forbes 2017. Additionally, Dion Lee is trying to push boundaries of design innovation by working with people, encouraging and challenging. The brand do not have a mission or vision statement per se based on community but rather a strong value on architectual dress structure and innovation.
Structure Creative Director CEO Dion Lee
Production Lynn To
E-commerce PR + Donald Chung Social media
Retail Lorraine Abela
Pablo Villacis
Dion Lee is not a transparent company yet and the organizational chart was found through Linkedin
Local enviornment PEST Political China imposed 80% tariffs on its barley Rightwing thinktank launches legal challenge to Australia's travel ban Revised forecast on iron ore prices key as projections for growth rise while those for unemployment fall China to impose temporary anti-subsidies on Australian wine imports from Dec. 11 Economic Indonesian rupiah is still ‘undervalued’ and offers very strong yield appeal: ANZ Bank The Australian dollar is surging on record iron ore prices as tensions with China climb Social New Zealand agrees on two-way ‘travel bubble’ with Australia early 2021 Social media execs will face jail in Australia if their platforms host violent content Technologic Prime Minister Scott Morrison said Australia will create a code of conduct to address complaints that the technology companies have a stronghold on advertising. Australia to trial shark deterrent technologies
Ethics and sustainability The australian government is strong commited to sustainability protecting its Great barrier reef The Reef 2050 Long-Term Sustainability Plan is the overarching framework for protecting and managing it. After the Recycling and Waste Reduction Act 2020 commences, companies will only be able to export certain types of processed waste - and they will need a licence to export it. The Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and related Acts protect the environment by reducing emissions of ozone depleting substances and synthetic greenhouse gases. The Australian Government has introduced landmark legislation into Parliament to ensure Australia takes responsibility for its waste.
Foreign market PEST Political Tokyo feels threatened by China’s activity in the waters surrounding Japan, state minister of defense Yasuhide Nakayama said Climate change may help the U.S. and China find common ground under a Biden administration The U.S. and China are spiraling into an ‘alarming’ power play Economy China’s consumer price index (CPI) fell in November for the first time in about a decade as food prices dropped. Fitch upgrades its China growth forecast for 2021 Social From robotaxis to e-scooters, Covid is changing how people in China commute China’s Covid vaccine from Sinopharm is 86% effective, UAE says Technology China’s Huawei tested A.I. software that could identify Uighur Muslims and alert police, report says China’s experimental stock board gains 200th IPO just over a year after launching
Ethics and sustainability China has taken steps to dismantle coal-fired power plants, reduce overall emission levels and cut particulate-matter emission rates. The former Ministry for Environmental Protection has been transformed into the Ministry of Ecology and Environment (MEE) which will oversee all waterrelated policies and climate-change.
Competitive analysis
Threat of new entry
Porter's five forces
Supplier power Unique design
Brand loyalty Time and cost Barriers
Competitive rivalry 3 competitors Innovative designs
Threat of substitution Low threat of substitution
Buyer power Young generations Differentiation Price sensitive
Stella McCartney
SWOT STRENGTH Sustainable brand Heritage Well-known WEAKNESS Exclusive items online Collabs with not sustainable brands High cost OPPORTUNITIES Innovation Conscious target New lines THREATS Price Sustainability becoming a trend Higher costs
KEY SUCCESS FACTORS Well recognised in the fashion industry. Leading brand in sustainability, a benchmark.
COMPANY AND PRODUCT Luxurious products timeless in a socialenviorenmental concious company
Saint Laurent
SWOT STRENGTH Image codes Large portafolio Well-known Heritage WEAKNESESS Price range Restricted target OPPORTUNITIES Brand awareness New markets Expand vintage clothes THREATS Loyalty Competitors at lower prices Brand recognition
KEY SUCCESS FACTORS Strong heritage and well recognised in the fashion world.
COMPANY AND PRODUCT Luxurious products at high prices from an established company.
Jil Sander
SWOT STRENGTH Diverse Aesthetic High-quality fabric WEAKNESESS Overpriced No advertising Restricted target OPPORTUNITIES Celebrities endorsment New lines THREATS High street competitors Lack of sustainability No transparency
KEY SUCCESS FACTORS Strong niche community with specific aesthetic.
COMPANY AND PRODUCT Products at high prices from a fast expanding brand.
Market analysis
Consumer behaviour Millennials also known as “little emperors” or “little empresses” were born under the one-child policy and heavily spoiled by their families. This led to a sense of entitlement among this generation demanding highquality goods and services. Chinese millennials are less likely to save and spend most of their money on various products and services. They are more willing to spend on experiences and luxury goods than other generations. They are also the first digitally savvy generation meaning they are more likely to participate on social media and purchase through e-commerce. Gen-Z often spend their parent’s money and are a huge factor in influencing their parents purchasing habits too.
Characteristics of these chinese consumers are: 1. 2. 3. 4. 5. 6. 7.
Instant gratification Omnichanel shoppers Powerful woman Riding solo Phone obsessed Personal care Tradition
Market entry strategy The entry strategy will be through Alibaba Tmall market place, a luxury platform that already has brands such as Giorgio Armani or Alexander Wang. The reason behind is due to the uncertainty of the markets during the global pandemic. Physical stores are also being considered in a long run to transmit the values and experiance the company. The e-commerce platform is going to supply the company with a better and deeper understanding of the chinese culture that is based in traditions.
Marketing strategy Target, Positioning Millennials and Gen-Z will be the target of Dion Lee in China since they are the ones who spend the mostin such country. As mentioned before these generations seek high-end products, experiance and exclusiviti that the brand can offer.
Sustainable
Afordable
Expensive
Not Sustainable
Marketing mix Product Dion Lee will sell its products teaming up with DHL. The brand is currently using several distribution services around the world wich make it less efficient. The partnership with the new DHL enviornmental friendly service is going to give more coordination and sustainability image to the brand.
Price
As mentioned before, the chinese government has cut important tariffs enableingbrnads reduce their prices. Dion Lee as a luxury fashion will maintain its global prices in order not to drive sales outside the country. Given the consumer the option on buying the same item at the same price in and outside the country, Dion Lee believes the consumer will bet on the advantages getting from buying in the country.
Communication
Distribution
The target in the chinese market are millennials and gen-z. Since they are the ones who mosttime spend in social media, the brand will have specific accounts for the market on Instagram, Facebook, Tik-tok and WeChat. In a post-covid era, Dion Lee will open stores in the main cities of the country.
Since Dion Lee produces most of its garments in Australia the distribution is going to be made from the origin country itself. Producer --> Quality control --> Retailer --> Online/physical store --> Consumer
1 week 3 months
10 days planes pollute less
1 week get to the store and set up
Sustainability strategy
Dion Lee need to apply some changes to drive the brand into a more susainable one. The first step to do so itis the partnership with DHL to make the distribution more sustainable. Since the brand is a fashion brand that works with leather, a long-term proposition will be to fins more ethical resources to work with. Meanwhile, the brand is going to offer a service of maintenance and repair.
The international laws benefit consumers with a period of two years guarantee of the product, Dion Lee is offering a lifelong lasting warranty, for those consumers who purchase products, they can take them into one of the stores in order to be repaired if necessary at a price of free cost.
Operations overview
For the development of the International expansion plan it is advisable to follow some steps. The brand starts with an advantage to enter the market through Alibaba's platform that already know the market penetrating, nevertheless the brand needs to get to know their new consumer and country in order to benefit from it. it is also very important to find the suitable representative to transmit the core values of the company.
Conclusions According to the goodonyou.eco, Dion Lee has opportunities to improve their impact on social and environmental issues including ecology, logistics and labour rights. So far, Dion Lee shows lack of transparency and still uses inconvenient materials including leather. Therefore to improve its rating in the list of sustainable fashion companies, the company should include in their mid-term and long-term goals: More sustainable logistics due to the online focus in the current situation and the company's strategy. Not to forget packaging. More transparency in labour work showing working conditions at all stages of the product cycle. In a future perspective the brand should substitute leather materials with more ethical alternatives. Dion lee should find eco friendly manufacturers and suppliers.
References 2020. [online] Available at: <https://www.cnbc.com/china-markets/> [Accessed 17 December 2020]. 2020. [online] Available at: <https://www.linkedin.com/company/dion-lee/people/> [Accessed 17 December 2020]. 2020. [online] Available at: <https://www.cnbc.com/search/? query=australia%20social&qsearchterm=australia%20social> [Accessed 17 December 2020]. 2020. [online] Available at: <https://www.servicesaustralia.gov.au/organisations/about-us/corporatepublications-and-resources/environmental-sustainability-policy> [Accessed 17 December 2020]. Carter, F., 2020. Creative In Conversation: Dion Lee. [online] Forbes. Available at: <https://www.forbes.com/sites/felicitycarter/2017/08/14/creative-in-conversation-dion-lee/? sh=5e25d6aa253b> [Accessed 17 December 2020]. Dion Lee | Shop Online. 2020. Biography. [online] Available at: <https://www.dionlee.com/About/Biography> [Accessed 17 December 2020]. Dragon Social. 2020. Chinese Consumer Behavior: 7 Key Features For Brands To Know. [online] Available at: <https://www.dragonsocial.net/blog/chinese-consumer-behavior-7-key-features-forbrands-to-know/> [Accessed 17 December 2020]. Sustainable Australia Party. 2020. ENVIRONMENT. [online] Available at: <https://www.sustainableaustralia.org.au/environment> [Accessed 17 December 2020]. The Business of Fashion. 2020. The Business Of Fashion. [online] Available at: <https://www.businessoffashion.com/search?q=china%20market> [Accessed 17 December 2020]. The Guardian. 2020. Australia News | Australia-News | The Guardian. [online] Available at: <https://www.theguardian.com/australia-news/all> [Accessed 17 December 2020]. Un.org. 2020. Sustainable Development In China And China's Prospects For Rio+20 | Under-SecretaryGeneral Wu Hongbo - United Nations Department Of Economic And Social Affairs. [online] Available at: <https://www.un.org/en/development/desa/usg/statements/uncategorized/2012/06/sustainabledevelopment-in-china-and-chinas-prospects-for-rio20.html> [Accessed 17 December 2020]. World Economic Forum. 2020. Here's How China Is Going Green. [online] Available at: <https://www.weforum.org/agenda/2018/04/china-is-going-green-here-s-how/> [Accessed 17 December 2020].
REVISTAPRIMER.ES
Images 1. Dion Lee [Online image] Available from https://assets.vogue.com/photos/5d79596ecf30a200088d9ba2/master/w_1280%2Cc_limit/_SDR0013.j pg[Accessed 16 December 2020] 2. Dion Lee [Online image] Available from https://imagecdn.hypb.st/https%3A%2F%2Fhypebeast.com%2Fwpcontent%2Fblogs.dir%2F6%2Ffiles%2F2020%2F10%2Fdion-lee-ss21-lookbook-15.jpg? q=75&w=800&cbr=1&fit=max [Accessed 16 December 2020] 3. Dion Lee [Online image] Available from https://images.prismic.io/ap-studio/3db65b32-e2d1-46c3-97b7678d9c16a047_N373_23539_SMI_DionLee_36-07_V1.jpg?auto=compress,format [Accessed 16 December 2020] 4. Dion Lee [Online image] Available from https://www.marieclaire.com.au/media/55585/dionlee.jpg[Accessed 16 December 2020] 5. Australia map [Online image] Available from https://wwwnc.cdc.gov/travel/images/destination-mapaustralia.png [Accessed 16 December 2020] 6. Opera House, Sydnei [Online image] Available from https://upload.wikimedia.org/wikipedia/commons/5/5e/Australia_Day.jpg [Accessed 16 December 2020] 7. China map [Online image] Available from https://miro.medium.com/max/8000/1*Mwy3KP3RLU4admphfTrn-g.jpeg [Accessed 16 December 2020] 8. Chinese temple [Online image] Available from https://www.elrincondesele.com/wpcontent/uploads/2020/01/Portada-QuĂŠ-ver-en-China-1280x720.jpg [Accessed 16 December 2020] 9. Dion Lee, designer [Online image] Available from https://www.sydneydancecompany.com/wpcontent/uploads/2019/05/Dion-Lee-copy-1024x814.jpg [Accessed 16 December 2020] 10. Stella McCartney [Online image] Available from https://www.ecestaticos.com/image/clipping/bf1537c0c0c7d2f18be02c6ed1bc5001/stella-mccartneyo-como-la-sostenibilidad-cambio-la-moda.jpg [Accessed 16 December 2020] 11. Saint Laurent fashion show [Online image] Available from https://usagrlk5lagedl.stackpathdns.com/production/usa/images/1582730041992460SAINT_LAURENT_WINTER20_RUNWAY_38_HR.jpg? w=1920&h=800&fit=clip&crop=faces&auto=%5B%22format%22%2C%20%22compress%22%5D&cs=srg b[Accessed 16 December 2020] 12. Jil Sander, designers [Online image] Available from https://lh3.googleusercontent.com/proxy/H0b4ENhVi8b6lQOvgqAaGURZW_qUVVJclT--gL5feNSS3j6WZEj8A1sIjfj592qoJGenp6aLaFFt7MiH798W2fhIO9oRdNMwn2zfBVxVJZ9ydem7U_gX7v9qeAoQ [Accessed 16 December 2020] 13. Consumer report [Online image] Available from https://www.mckinsey.com/featuredinsights/china/china-consumer-report-2020-the-many-faces-of-the-chinese-consumer# [Accessed 16 December 2020] 14. Dion Lee [Online image] Available from https://fashionista.com/.image/ar_1:1%2Cc_fill%2Ccs_srgb%2Cq_auto:good%2Cw_1200/MTc2MjE0MD EzNzgzMzE5OTc3/dion-lee-monstera-dress-spring-2021.png [Accessed 16 December 2020] 15. Dion Lee store [Online image] Available from https://pbs.twimg.com/media/CsGWRbZWAAAKqJ.jpg[Accessed 16 December 2020] 16. Graphic consumer [Online image] Available from https://www.alizila.com/wpcontent/uploads/2018/01/millennial_luxury_products.png [Accessed 16 December 2020] 17. Map China and Australia [Online image] Available from https://upload.wikimedia.org/wikipedia/commons/4/40/Australia_China_Locator.png [Accessed 16 December 2020] 18. Dion Lee workshop [Online image] Available from https://cdn.shopify.com/s/files/1/0571/9261/files/IMG_2388_1024x1024.jpg?v=1505270543 [Accessed REVISTAPRIMER.ES 16 December 2020]