Peru as the next sourcing-hub of high quality alpaca knitwear to simply the European market by adriana seminario

ISTITUTO MARANGONI PROGRAMME MA LUXURY BRAND MANAGEMENT

Peru as the next sourcing-hub of high quality alpaca knitwear to supply the European market

Adriana Seminario Student ID 037463 Date: 03/12/2018 Word Count 15,673

Dissertation submitted to Istituto Marangoni as part of the work for the Manchester Metropolitan University degree MA Luxury Brand Management

Declaration I declare that this dissertation, submitted in accordance with the requirements of Istituto Marangoni and the Manchester Metropolitan University for the postgraduate program of Master in Fashion and Luxury Brand Management, is all my own work and has not been submitted previously to any other institution. All source materials used in the preparation of this dissertation, whether published or unpublished, have been acknowledged and referenced. All referencing is in accorfance with Institutional, Faculty and Departamental requirements. If awarded the above degree, I do not give permission for this dissertation to be considered for retention, consultation or any type of partial or total reproduction. I understand that, if required, I should make a copy of the dissertation for my own purposes before submission. The Institution is not under any obligation to return a copy of the work to me after submission.

Signed: Adriana Seminario

________________________________

Date: 27TH November, 2018

Abstract The aim of this research concentrates in determining whether if Peru could become the next global sourcing-hub for high qualitative alpaca knitwear. The alpaca yarn has been used historically in Peruvian textile tradition, from the Inca civilization up to modern times. Today, Andean communities along the Peruvian territory have inherited this craftsmanship and techniques through generations. Nonetheless, it takes more than high-quality yarn and ancestral weaving techniques to structure a supply chain capable of fulfilling the demands of highcompetitive fashion markets such as the ones established in Europe. In order to position a country as a sourcing-hub for high-qualitative knitwear, there is a series of aspects that need to be taked into account. Not only the country exporting organization and production capacity, but also the delivery times, high quality-standards and an overall understanding of markets in perfect competition. This research is structured on primary research, which mainly consist in qualitative data collected from semi-structured interviews with professionals from the fashion luxury industry in Europe, an official representative of the Commercial Offices of Peru in France, European luxury consumers, and a focus group with European fashion consumers non-involved in the fashion industry. Additionally, a visit to PrĂ¨miere Vision was held on September 2018, in order to scan the presence of Peruvian alpaca brands and their performance. The quantative data was collected through exportation charts of Peruvian alpaca brands provided by ADEX, the official Peruvian exportation Association, and reports on the advantages of using the alpaca fabric provided by Incalpaca, one of the key players regarding alpaca garments, alpaca yarn treatment and sourcing in Peru. This analysis concludes that, even though Peru holds the largest alpaca population in the world, an ancestral know-how for weaving techniques and an up and coming fashion premium market with alpaca-related products, this alone does not make the country a sourcing-hub for alpaca high-quality knitwear on the eyes of the European luxury fashion market. A route plan is elaborated at the end of this dissertation in order to draft the necessary steps for this sourcing-hub positioning to happen, according to the following research.

Table of contents DECLARATION…………………………………………………..……………..…...2 ABSTRACT………………………………………………………………....………..3 CHAPTER 1. INTRODUCTION…………………………………………………………..……..….7 1.1. Background history on the knitting industry………………..……..….7 1.2. Alpaca from Peru, a millenary textile………………………..……..…7 1.3. Problem statement…………………………………………..……..…...8 1.4. Research aim and objectives………………………………..……..….9 1.5. Research question and outline of study…………………..……..…...9 CHAPTER 2. LITERATURE REVIEW 2.1. Factors that make a country a sourcing hub………………..……..…...12 2.1.1. Competitive commercial advantage………………..……..…..15 2.1.2. Retail buyer’s purchase decision……………….……..….......17 2.2. The alpaca business in Peru and its direct competitor.……..….........20 2.2.1. European and European-based luxury fashion brands currently using alpaca from Peru……………………..……..…....24 2.2.2. Peruvian alpaca presence and awareness on key fashion events………………………………………….…..……..………….26 2.2.3. Direct competitor: the Australian alpaca industry.…………..27 2.3. Case studies: success of Mongolia cashmere in the European luxury fashion market………………………………….…..……..……………31 2.3.1. Validation of Mongolia as quality check sourcing for topquality cashmere……………………………….…..……..……………32 4

2.4. Sustainability: the plus of the alpaca fabric in the fashion luxury market……………………………………….…..……..…………….….33 CHAPTER 3. RESEARCH METHODOLOGY 3.1.

Introduction and Research Approach….…..……..………………37

3.2.

Research Design……………………….…..……..…………….….38

3.3.

Research Strategy and Data Collection..……..…………….……38

3.4.

Data analysis…………………………….…..……..…………….…40

3.5.

Ethical issues…………………………….…..……..…………….…41

3.6.

Limitations…………………………….…..……..…………….…….42

CHAPTER 4. RESULTS 4.1.

Qualitative findings………………….…..……..…………….……..44 4.1.1. Interview with industry professional of the European fashion luxury industry………………….…..……..……………….44 4.1.2. Interview with an official members of the Commercial Office of Peru in France………………….…..……..……………..47 4.1.3. Interviews with Peruvian sourcing and fashion brands of alpaca in Prèmiere Vision September 2018……..……………. ..51 4.1.4. In-depth interviews with European customers of luxury fashion brands and industry insiders….…..……..……………….56 4.1.5. Focus groups with French customers of premium and fast fashion brands…………………………….…..……..………….….59

4.2. Quantitative findings 4.2.1. Exportations key figures by ADEX…………………………62

CHAPTER 5. DISCUSSION………………………….…..……..…………….…..65

CHAPTER 6. CONCLUSION………………………….…..……..…………….…69

REFERENCES………………………….…..……..…………….….……………...71

BIBLIOGRAPHY……………………….…..……..…………….….……………...76

ICONOGRAPHY……………………….…..……..…………….….……………...77

APPENDICES……………………….…..……..…………….….…………….......79

CHAPTER 1. INTRODUCTION 1.1.

Background history on the knitting industry

The machine knitting industry dates back to the early XVIth century, and today it is still providing endless creative outcomes, enabling an independent and experimental approach to design. In an overview of knit fabrics, we find animalsourced yarns such as wool, hair and silk has been widely popular through time. (Sissons, 2010) From the animal-based ones, the most popular in the luxury fashion business are sheep’s wool, angora and cashmere because of their softness, warmth and light-weighted consistence, qualities that translate as highquality for the final customers. (Sissons, 2010) Amongst these fabrics, cashmere is the top-performer in the fashion business in Europe, frequently used by luxury brands such as Loro Piana, Ermenegildo Zegna and Brunello Cucinelli. There is a prevalent perception that cashmere yarn sourced from Mongolia is synonym of high quality. Worldwide, countries such as Mongolia, India and China are wellknown for being a sourcing-hub for top quality cashmere. In 2018, the Mongolian government launched a four-year program to boost the cashmere industry and the local jobs around it. (Xinhuan, 2018) Likewise, countries like Egypt and Turkey have a well-established reputation of not only growing top-quality organic cotton fiber, but also having the logistics of certified land, farmer’s associations and data on yearly productions that positions them as sourcing-hubs on this specific thread. (About Organic Cotton, 2016) 1.2.. Alpaca from Peru, a millenary textile In the South American continent, Peru is a country that holds a long historical tradition with top-quality knit fabrics. The alpaca and vicuña yarns were already 7

treasured by the Inca civilization 6000 years ago, and their fine fleeces were for exclusive use of the Incan royalty. (Incalpaca, 2018) Today, its commercial potential is recognized both locally and internationally. Every year PromPeru, the government institution in charge of promoting exports and tourism, organizes international events such as PeruModa, which generated $108 million worth of business deals on 2017. (Andina, 2018). Simultaneously, brand’s initiatives such as government-issued certifications, proposed by Peruvian-Danish brand Ayni and enabled by the Ministry of Employment of Peru, which certifies individuals in labour competencies within the fields of hand knitting since 2012 with the objective of giving recognition and value to their labour competencies, give a solid and official argument to Peru as a possible sourcing-hub for high qualitative alpaca knitwear. (Ayni, 2016)  However, alpaca is not necessarily contemplated as a first option on the European luxury fashion brands fabrics portfolio, as cashmere is. 1.3. Problem statement Cashmere is historically related to luxury in Western Europe. On the XVIIIth century, there was a rising popularity of cashmere pashmina shawls amongst European aristocracy and later on, iconic designer Hubert de Givenchy stated that: “All a woman needs to be chic is a raincoat, two suits, a pair of trousers and a cashmere sweater” (Yapar, 2017). On the same historical explanation thread, there has been many fibers that have been highly popular in the European market depending on the time period. The variety of textures comes from the nature of the yarns, the weave and the colours used, and in Europe, this variety developed as a result of the meeting of East and West. If we look at commonly consider luxury fabrics, we see that coveted silks were introduced to the European continent from India and China since the time of the Crusades. (Müller, 8

2008:237). However, due to the geographic distance, a lack of a historical trading routes between South America and Europe resulted in low awareness of certain yarns. As a result, alpaca has never had such a strong presence on the European fashion luxury system, nor has it been associated with Peru as a validation for high-quality. 1.4. Research aim and objectives The aim of the current dissertation is to analyse a strategy in order to create awareness and potential business-inquiries of Peruvian alpaca as a highqualitative fibre and knitwear product on the European luxury fashion market. Therefore, the objectives have been defined as the following: •

Define what makes a country as a sourcing-hub for top-quality knitwear.

•

Analyse what European customers are looking for when considering to purchase luxury knitwear and how alpaca could be positioned in this sector.

•

Analyse the results of the actions developed by Peru as alpaca suppliers so far and the reasons why certain brands have achieved an international presence.

•

Assess the commercial presence of alpaca fabric and alpaca knitwear garments in the European market and sustainability assets of the fibre.

•

Define the steps of a long-term route plan that would position the Peruvian alpaca knitwear in the top-quality European fashion market.

1.5. Research question and outline of study

The purpose of this research is to answer the following question: How to make Peru the next sourcing-hub for high qualitative alpaca knitwear to supply the European market?

In order to answer this question, the research will start with an insightful research on the factors that make a country a sourcing-hub for high-qualitative knitwear, the current state of the business of the alpaca yarn in Peru, the case study of cashmere sourced from Mongolia and India, and the sustainability plus of the alpaca fabric in the current international fashion industry. Further into the dissertation, the research methodology will provide a structured path based on the research methods adopted throughout data-collecting. Later on, the qualitative and quantitative findings will be stated through the different formats regarding each category. Whether it will be insights from interviews with fashion luxury brands insiders, fashion consumers of authorities in charge of the commercial trade between Peru and France.

Further on,

quantitative data on Peruvian alpaca exporting brands and their destination countries will be carefully analysed in order to determine the current international markets. Finally, the discussion will confront the results extracted from the analysis of the research and the literature review. From the interviews, focus groups, registered conversations with industry professionals and official reports, amongst further research that will be deployed further on this document, a strategy towards the aim of this dissertation will be elaborated. The findings of this study can be helpful for Peruvian alpaca knitwear brands that wish to reach the European luxury market, for alpaca sourcing companies that are looking forward to understand the dynamics of the European luxury market

and how to enter it, for the luxury brand buyers in order for them to be properly introduced to the advantages and processes of working with Peruvian alpaca, and for the Peruvian commercial offices and exportation associations.

The purpose of this dissertation is to be a route plan, which could be implemented partially or totally, in order to create a business-oriented relation between Peruvian fashion brands and sourcing companies using alpaca with the European luxury fashion market. It can also be used as reference to understand the current positioning of the European fashion market regarding luxury knitwear and the perceptions and opinions of European-based customers around this particular knit fabric.

CHAPTER 2. LITERATURE REVIEW 2.1. Factors that make a country a sourcing hub For this first sub chapter, it is considered appropriate to start by defining a sourcing hub. What is the definition of a hub? What exactly is sourcing and how does it work? A hub is a organizational technical term that can be in different fields such as engineering, electronics and transports. On these fields, a hub, also called a network hub, is a common connection point for devices in a network. Hubs contain multiple ports, so when a piece of information arrives at one port, it is copied to the other ports so that all segments of the chain can be aware of the information. (Webopedia, 2017) On a general vision, a hub is simply defined as the main part of something where there is the most activity. (Cambridge Dictionary, 2018) As for sourcing, Edward G. Hinkelman, author of â&#x20AC;&#x153;The World Trade Press Guide to International Outsourcingâ&#x20AC;?, defined it as the location, acquisition and management of all the vital inputs required for an organisation to operate. This includes raw materials, component parts, products, labour in all its forms, location and services (Hinkelman, 2008:578). Altogether, a sourcing hub for the retail industry would involve a organizational unit integrating and coordinating common items, materials, processes, technologies, designs and suppliers across worldwide buying, design and operating locations. (Trent and Monczka, 2005) It would also involve an advanced approach to sourcing and supply management that involves integrating and coordinating common materials, processes, designs, technologies and 12

suppliers across worldwide buying, design and operating locations. However, since most organizations do not have fully-developed sourcing strategies in place, improvement opportunities in this area are attractive and as yet largely unrealized. (Samli, Browning and Busbia, 1998 in Trent and Monczka, 2005) Distance wise, when going from domestic purchasing to international purchasing, organizations must contend with longer distances, increased rules and regulations, currency fluctuations, customs requirements, and language, cultural and time differences. Companies that then go on to pursue global sourcing must contend with the operational issues that affect international purchasing while also managing a higher level of cross-functional and cross-locational coordination. (Trent and Monczka, 2005) On their research, ‘Achieving excellence in global sourcing’, Robert Trent and Robert Monczka, identified a set of features characterizing organizations that are especially effective at global sourcing. The features can be classified into seven broad characteristics:

•

Executive commitment to global sourcing

•

Rigorous and well-defined processes

•

Availability of needed resources

•

Integration through information technology

•

Supportive organizational design

•

Structured approaches to communication

•

Methodologies for measuring savings

Few organizations demonstrate all the detailed features presented here. However, this profile can serve as a benchmark, allowing brand executives to 13

compare their companies current capabilities and features with best practices in global sourcing. (Trent and Monczka, 2005) To exemplify this in a concrete example, the main reasons behind China being the most attractive global sourcing hub is its beneficial government incentives, an abundance of low-cost labour, extensive infrastructural development, and industrial growth. China has seen extraordinary growth over the years and will likely remain one of the most sought after markets for manufacturing goods. (Business Wire, 2017) As for India, the knitwear industry is one of the largest of the world next to China. They rely in the fact that the export market follows quality systems that are fairly high on pricing and awareness because of international standards. Right from the yarn sourcing, the export market has demands that include laboring laws and factory space. (Tee Talkies, 2018) Countries like Morocco are jostling to become sourcing-hubs for denim, woven and knitwear due to it’s closeness to Europe and events like ‘Maroc in Mode’, which took place in Marrakesh on the 27th and 28th October 2017, raised international awareness by showcasing the nation’s best manufacturers. (Yarns and Fibers, 2017) Additionally, the Moroccan government has institutionalized textile cooperatives such as the ‘Association Morocaine des Industries du Textile et de l’Habillement’, which legitimates the sector even further. The events previously mentioned are part of an ambitious strategy to build up the industry by €500 million on 2020. Furthermore, leading Moroccan manufacturers have been chosen to act as consulting ambassadors, guiding and advising smaller companies on how to modernize and improve production capabilities. (Yarns and Fibers, 2017)

2.1.1 Competitive commercial advantages Raw materials are a significant part of a company’s sourcing costs. There are many companies that source their raw materials from different suppliers, but this kind of sourcing fails to recognize the common pool of suppliers which are actually upstream. A sourcing hub tries to integrate all these suppliers in terms of their commonalities. (Agrawal, 2014). A current example of the competitive commercial advantages of an international sourcing-hub for the European fashion market, not exclusively in knitwear but on different textiles and on a bigger scale, is Turkey. Market research firm Euromonitor reports that textiles accounted for 18.5% of total goods exported from Turkey in 2015, making it the greatest share of that year. On monetary terms, the value of clothing exported reached US$ 16.8 billion in 2015, according to the Turkish Ministry of Economy show. (Textile Excellence, 2017) Even though the country has faced political convulsions and has been subject to the terrorist activities that are affecting many countries around the world, its focus on supplying fashion to the European region shows no sign of slowing down. Short time leads, a fast and accessible geographic distance, and high flexibility from suppliers and factories are the main reasons why European companies prefer to place orders in Turkey rather than Southeast Asia or China (Textile Excellence, 2017). The never ending fast-pace of the fashion industry, including capsule collections and special editions every season, need a malleable supply chain in order to be launched on schedule. Journalist Suzanne Bearne stated in her ‘Buying and sourcing in Turkey’ article, published in the specialized fashion journal Drapers, that Stephen Taylor, senior manager of the American business-consulting agency Kurt Salmon, pointed out that while Turkey has a higher level of production costs compared to typical Far 15

East sourcing destinations, it does offer a favourable exchange rate. Overall, the higher production cost in Turkey can be levelled by the benefits of shorter delivery times and a faster reaction to the market developments. Cem Altan, board member of textile industry association ‘Istanbul Apparel Exporters' highlighted the fact that brands can make small orders, repeat on styles and do not need to carry extra stock. “They don't have to commit, so instead of ordering 20,000 pieces of the same garment they can try 5,000 instead”, stated the textile businessman on a 2017 interview by Textile Excellence, a specialized news portal for the textile industry in Asia. (Bearne, 2017) Simon Platts, sourcing director of Asos, one of the biggest e-commerce fashion stores, added that the key factor to sourcing is a fast-speed reaction to market. Orders can be placed and samples can be received five to seven days later, modifications on products can be turned around quickly and the ability to place small through to larger-scale orders gives flexibility, and the ability to try new products and trends. (Bearne, 2017) Ultimately, Turkey can offer customers vertical manufacturing capability, which makes a substantial difference in delivery times. And in addition to garment production, the country has a strong heritage in textiles. It remains a top 10 producer of cotton, wool and polyester. Furthermore, it has fabric, knit production and finishing capability. Overall, Turkey exported US$ 8.9 billion knitted garments in 2015, US$ 5.9 billion in woven ready-to-wear and US$ 1.9 billion in ready-toensemble clothing, figures indicated by the Ministry of Economy of the country. (Bearn, 2017)

2.1.2. Retail buyers purchase decisionâ&#x20AC;¨ The current subchapter will address two consequent parts. The first will address the theoretical side of the decision-making process, which is inherent when facing any new situation. The second will analyse the actual tasks and importance of the retail buyers, in order to land the theoretical part on the actual retail practice. For fashion brands and retail buyers, facing the decision of sourcing a different top-quality knitwear fabric, such as alpaca, from a new market, such as Peru, goes through a whole decision-making process. According to the consumer purchase decision-making process, buyers and consumers in general undertake a great deal of external search activity and spend a lot of time reaching a solution that satisfies the evaluative criteria previously set. This activity is usually associated with products that are unfamiliar, where direct experience and knowledge are low and where there is a considerable financial risk (Fill and Turnball, 2016). The buyer decision process can be explained in a framework of five stages. First introduced by John Dewey in 1910, these stages provide a general map of an individual's path from contemplating a need for a product and then reflecting on the experience after the purchase has been made. (Kotler, 2016) American economist and marketing specialist Philip Kotler pointed out that it all starts with a problem, also called a need recognition. In this first stage we recognize what the problem or need is, and proceed to identify the product or type of product that is required. The second stage is crucial: the information research. The consumer researches the product which would potentially satisfy the recognized need. Then comes the evaluation of alternatives, where the

consumer evaluates the searched alternatives by advantages and disadvantages depending on his requirements. Generally, the information search reveals multiple products for the consumer to evaluate and understand which product would be appropriate. The fourth stage is the actual purchase decision. After the consumer has evaluated all the options and would be having the intention to buy any product, there could be now only two things which might just change the decision of the consumer of buying the product that is what the other peers of the consumer think of the product and any unforeseen circumstances. The fifth and final stage is the post-purchase behaviour. The biggest risk on this final part is that after the purchase, the consumer may experience post-purchase dissonance, explained as the feeling that buying another product would have been better. Taking the necessary steps for avoiding post-purchase dissonance is extremely important, such as client follow-up and content that reinsures the quality of the product/service. Spreading a good word for the brand increases the chance of frequent repurchase. (Kotler, 2016) While many consumers go through these stages in a fixed, linear sequence, some stages such as evaluation of alternatives may occur throughout the purchase decision. (Rossiter and Bellman, 2005) The time and effort devoted to each stage depends on a number of factors including the perceived risk and the consumer's motivations. In the case of an impulse purchase, such as the purchase of a chocolate bar as a personal treat, the consumer may spend minimal time engaged in information search and evaluation and proceed directly to the actual purchase (Kotler et al. 2016) Concerning the role of the retail buyers in the fashion industry, it is safe to affirm that their role and skills have a direct impact on the storeâ&#x20AC;&#x2122;s sales volume and, ultimately, the brands success or failure on a long-term. They may buy for a 18

department store, multiple stores, or a chain of stores. Those who work for larger retail business often handle one or a few related lines of goods and are referred to by the type of goods they purchase, may it be sportswear, menswear, to buyer, etc. (Jacobsen, 2009:29) Central buyers work for chain stores and mail-order houses. They may be located in divisional headquarters, the parent store of a chain, or in offices in wholesale market areas. Resident buyers may be employed by one firm or they may sell their services to many firms. Buyers are often located in major cities or, in certain cases, overseas. (Jacobsen, 2009:30) Under the guidance of the Managing Director and within the company framework, the buyer is asked to develop a merchandising strategy for the department, division or store: analyse and understand targeted consumer demands, segregate merchandise classifications (fashion and trendy assortments, basic assortments, novelty assortments), improve on resource structures, maintain good relationships with key vendors, set pricing policies that fit the company structure, analyse trends and regularly review performance indicators with sales. (Jacobsen:2009, 33)

An ongoing duty of a retail buyer is to meet suppliers and negotiate prices and margins and, at times, terms of contract. This is an area that requires both skill and tact, and in which the buyer needs to be clear and concise in explaining what she wants without being too forceful or too arrogant. These relationships are a two-way arrangement. On one side, the buyer will seek out vendors who are progressive and innovative in meeting the needs o the company and its customer. On the other side, the vendor will look for retailers that offer the best platform to sell his product. (Jacobsen, 2009:33)

Probably, the toughest part of a retail buyer, specially in the fashion field, is forecasting. Buyers purchasing items such as food, appliances, household items and alike, are exposed to fewer risks than a fashion buyer. Fashion buyers are faced with many more, constantly changing variables such as colours, trends and styles, fabrics, etc., which require an in-depth knowledge of the consumer profile and trends-together with a good dose of gut feeling thrown in if forecasting is to be accurate. Forecasting becomes even trickier when the buyer needs to buy six months or more in advance, taking the possible risk that the colour emphasis may change in the interim. While past sales combined with fashion forecasterâ&#x20AC;&#x2122;s predictions are helpful, the buyer always needs to exercise sounds judgement. (Jacobsen, 2009:15)

2.2. The alpaca business in Peru and its direct competitors The exportation of Peruvian textiles incremented on 5,71% from January to November 2017, mainly fuelled by the alpaca fibre which settled trade arrangements valued on $68 million. China was the main importer of Peruvian alpaca yarn on this year, closing deals business of $48 million. (Peru Retail, 2018) PeruModa, the biggest event promoting Peruvian knitwear brands and yarn suppliers, got 50% of new international buyers coming to Lima on 2018. According to Luis Torres, director of exportations at PromPeru, most buyers that look for alpaca knitwear or alpaca fabric come from the United States and Brasil. European and Asian market, thought still relevant, are not the main targets of Peruvian alpaca knitwear exports. (Andina, 2018) The alpaca fiber is one of the main sources and identity and richness that Peru has to offer. This natively Peruvian animal is exclusively found in the Andes, and during the last years, its yarn has opened the doors to a number of promising 20

textile markets. Peru has the most important population of alpacas until today, with 83% of the worldwide population of this animal being found in the Peruvian territory. (Infoalpacas, 2015)

Figure 1 Chart on worldwide population of alpacas (Source: Ballón, V. and Laureano, M., 2017:p. 6)

More than four million of alpacas were registered in the Peruvian Andes region until 2015, according to the ‘Instituto Nacional de Estadística e Informática’ (INEI). Four types of alpaca can be found: Huacaya (78.9%), Suri (12%), Hybrid (7.2%) and Capon (1.9%). The first two ones are the ones usually requested for manufacturing alpaca garments. (Ballón and Laureano, 2017)

Figure 2 Population of Peruvian alpaca dated to 2017 (Source: Ballón, V. and Laureano, M., 2017:p. 9)

Regarding infrastructure, the ‘Ministerio de Comercio Exterior y Turismo’ registered 349,3 million dollars of imports in industrial machinery for confection, what represented an increase of 21% compared to the previous year. (Mincetur, 2015) The importations are mainly oriented towards the modernisation of the existent machinery, particularly, the ones involved in the last phases of the productive process: weaving, dying and tailoring. It is relevant to mention that the weaving and dying are key points in the process given the fact the tech equipment investment is higher. (Ballón and Laureano, 2017)

As the aim of this dissertation involves a sourcing hub for high-qualitative Peruvian alpaca knitwear, it is also pertinent to close this subchapter with key points around suppliers and their importance on the bigger picture. A supplier that performs well can help and organization be more efficient, producing higherquality products and services, reducing costs and increasing profits. (Jacobsen, 2009:265) A buyer’s success depends greatly on the selection of resources, which contribute to the company’s profitability through steady sales and uninterrupted by late deliveries, poor quality or the supply of merchandise that does not match the buyer’s requirements. (Jacobsen, 2009:266) Thus, the seriousness and stability of a supplier, and the main reasons why they can establish a business relationship with buyers and brands, is regarded under certain criteria’s. First, is the vendors attributes: vendors can contribute to your overall profitability through such things as their distribution policies, shopping and inventory

maintenance,

promotional

merchandise

policies,

advertising

allowances and competitive pricing. Second, the speed. Buyers are looking for suppliers who have the ability to react quickly to their needs and deliver the goods within a very short lead time. Today, big retailers are relying more and more on

automated data-linked technology. Electronic Data Interchange (EDI) technology helps retailers communicate purchasing data, sending electronic data in standardized formats between one organizationâ&#x20AC;&#x2122;s computers and anotherâ&#x20AC;&#x2122;s. It eliminates manual paperwork and possible mistakes. Last but not least, the purchase-order conformity. Buyers take time to carefully place purchase orders that have been planned in accordance with their budgets and planners. These orders will reflect buys by class or sub-class which, in turn, translate into actual styles, colours, sizes, inclusive of delivery dates, discount terms, packaging specifications and other arrangements. Conformity to the order specifications is necessary for the buyers to ensure that the right merchandise mix is on the selling floor at the time it is most needed, and it is vital that the chosen suppliers fulfil their part in this diligently. Though simple in theory, this is not always the case. Often, vendors will substitute fabrics, colours, sizes and styles in order to fulfil an order, but without complying with the buyerâ&#x20AC;&#x2122;s specifications. This not only causes delays, with the goods being rejected, but puts a real dent in the buyer-vendor relationship. (Jacobsen, 2009:267) For a wider vision of the buyer-supplier framework, please refer carefully to the next chart:

Figure 3 Supplier management framework (Source: Jacobsen, M, 2009: p. 67)

2.2.1. European and European-based luxury fashion brands currently using alpaca from Peru PromPeru has two textiles branding strategies in order to assure top-quality to current and potential international fashion buyers. The first is Perú Textiles, which certifies not only a standardized quality for the alpaca yarn but also for pima cotton and vicuña yarn. Perú Textiles is supported by the GOTS (Global Organic Textile Standard), the WRAP (Worldwide responsible accredited production), Fair Trade, amongst others. The second and most specific certification of the Peruvian government is “Alpaca del Perú”, an exclusive-alpaca branding which focus in the promotion of the yarn internationally. (Promperu, 2017)

These efforts have translated into concrete actions when, on 2016, buyers of Italian luxury fashion brands Versace and Prada assisted to the Alpaca Moda, celebrated in the city of Arequipa. (Andina, 2016) The Alpaca Moda is businessoriented trade show in which 80 alpaca companies from the Peruvian cities of Cusco, Arequipa, Puno, Huancavelica, Ayacucho, Junín and Lima, get together to held business trades with international fashion and textile buyers invited by PromPerú. (Andina, 2016) From the European standpoint, e-commerce luxury retailers such as MyTheresa.com, Matches Fashion and Net-a-Porter, showed a variety of brands featuring the fabric. In order to provide concrete brand names, styles and trends in which the alpaca fabric was used by this European luxury brands, we present the offer of the German-based retailer Mytheresa.com. The first image is the top 9 most expensive alpaca garments and the brands that feature them, as for November 2018. Amongst them, we find Italian brand Brunello Cucinelli, Max Mara and Gucci, as well as Common Leisure, Jil Sander and Balenciaga. The second image is the top 9 less expensive alpaca garments and the brands that feature them according to the search engines of the website. Amongst them we find French brand Isabel Marant and their more affordable line, Isabel Marant Étoile, as well as Missoni, Stella McCartney and 81 hours. It is relevant to mention that the high-priced items are exclusively long coats with lining and trendy cuts, and are often presented as a mix of alpaca and wool, in different proportions depending on the brand. On the case of the lower-priced items, they consist mainly in light sweaters, warm-season tops and a knitted beret.

Figure 4: Top 9 most expensive alpaca garments (Source: MyThereresa.com, 2018: online)

Figure 5: Top 9 less expensive alpaca garments (Source: MyThereresa.com, 2018: online)

2.2.2. Peruvian alpaca presence and awareness on key fashion events   Alpaca yarn and alpaca knitwear garments are present on various events around the world. In Europe, Incalpaca, one of the biggest alpaca groups of Peru, showcases their collections at Première Vision Paris, where they were granted an award on 2015. (Première Vision, 2016) Additionally, OCEX Belgica, the commercial office in charge of promoting Peruvian business in Europe, organized Alpaca Awards in 2018 in partnership with MAD Brussels, a renowned Belgianbased fashion school. (Diario Gestión, 2018) The aim was to exhibit the creative designs of young Belgium designers with the alpaca fabric, showing its versatility and potential as a quality fabric for knitwear design. In the United States, the 26

alpaca yarn was present at Magic Show in Las Vegas, Nevada, where Peruvian companies closed $6 million in trade arrangements and sales revenues, having Canada, United and Mexico as their main buyers. (Andina, 2016) An increase of 48% was registered on the Peruvian alpaca industry on the first semester of 2018, while the Ministry of Production confirmed that the volume of alpacas on Peruvian territory had increase by 30% (Diario Gestiรณn, 2018). This official announcement was made on October 2018 during the Alpaca Fiesta, an event promoted by the Peruvian government with the sole purpose of showcasing and promoting the business around this fabric. Held in the province of Arequipa, on the south east region of Peru and where the most important alpaca fabrics hold their headquarters, the 2018 edition of Alpaca Fiesta brought together the Ministry of Agriculture, the Ministry of Production and the Ministry of International Commerce and Tourism into certain agreements. (Diario Gestiรณn, 2018) For the first time, the three ministries accepted a proposal on good practice on the alpaca farming, presented by the Asociaciรณn Civil Alpaca del Peru (Ascalpe) and the Asociaciรณn Internacional de la Alpaca (AIA) to establish it as an official technical norm. The main objective is to create a strong link between the small and artisanal producers and a wider, international market, with higher standardized requirements and profit involved. (Diario Gestiรณn, 2018) 2.2.3. Direct competitors: Alpaca from Australia Australia represents one of the main competitors for Peru in terms of alpaca breeding and exportation. On the report of Commercial Viability of the Australian Alpaca industry, created by ACIL Consulting for the Australian Alpaca Association (AAA) in 2001, some well-structured guidelines already showed the clarity and organization of the Australian alpaca industry and their vision to have 27

a strong positioning in the international market. Officially, the alpaca industry in Australia started in 1989. However, it is only since 1999 that it has grown into a reasonably large-scale structured industry. With careful strategic management, they developed the potential to grow into an important natural fibre producer. On 2011, their industry association had an average of 2000 participants who managed a national herd of about 40,000 animals for a value of over $90 million. At the time of the ACIL report, their industry was primarily focused on breeding, but already aimed towards being fibre producers as their herd produced around 60,000 kg of yarn per year. They projected it at 200,000 alpacas by 2007, and a production of 500,000 of fibre annually. (ACIL Consulting, 2001) It is relevant to mention that this report was commissioned by the AAA, and its 1700 members at the time, to provide independent evidence in order to support applications to the Commissioner of Taxation, so they exercise on their discretion some specific changes under Division 35 of the Australian Taxation Legislation. (ACIL Consulting, 2001) As today we are considering the Australian alpaca market as a direct competitor for Peruâ&#x20AC;&#x2122;s positioning as the principal sourcing-hub of high-quality alpaca, we confirm this report, along with further actions taken by the AAA, had the impact desired. Furthermore, the report extends its objectives in long-term results on investment. For the registered breeders, they stated that it required an investment of at least 7 breeding females and a 7-year development period to become commercial viable. Commercially viable in the context of the registered breeder means achieving an annual turnover of $20,000. For fibre producers, an initial investment of at least 33 females was required to become commercially viable. Commercially viable in the context of the fibre producer means achieving a herd value of at least $100,000. (ACIL Consulting, 2001) 28

On the mentioned report, Peru is cited as the major producer, with exports over 3,000 tonnes a year of alpaca fiber in various forms. However, its stated that the Peruvian alpaca industry was static due to over-grazing, poor management and lack of commitment to selective breeding and not expected to increase its production. (ACIL Consulting, 2001) The following charts depicts the estimate of world alpaca herds and annual fibre production.

Figure 6: Estimate of world alpaca herds and annual fibre production. (Source: ACIL Consulting, 2001: online)

On 2001, the AAA knew that the major importing countries for alpaca fibre and products were China, Italy, Britain, Japan and Germany. Particularly, they emphasized that Asian countries had the potential to become the largest consumer of alpaca garments, while Europe should remain the main consumer of top end fibre. (ACIL Consulting, 2001) On an update to the current year 2018, ABC News reported that a transformation is underway within Australia's alpaca industry as it attempts to double the size of the nation's herd within the next few years. (Nichols, 2018) 29

Ian Firth, current president of the AAA, stated to the news journal that the Australian alpaca industry has become fully sustainable and has never been stronger. ‘It's really on an upward curve [and] fleece sales are excellent at the moment," he said. "Supply can't even meet demand which is very, very encouraging and the prices are good. Plus, there have been some very, very good animal sales into Asia by some of our breeders who've done an excellent job of promoting the alpaca industry overseas’. (Firth in Nichols, 2018) Moreover, Australian alpaca farmers are aware that they have earned a category as breeders, and as such, as exporters of the finest quality to the Asian and European markets. Maureen Piggott, an alpaca farmer from the Sunshine Coast Hinterland of Queensland, Australia, stated to ABC News that: ‘Early investors have scouted the world, purchased, and imported the best alpacas so we've had a really good running start in Australia.’ (Piggott in Romensky, 2018) Likewise, Prue Walduck, a Victorian breeder of alpacas, stated that even though the market of Australian alpaca is growing fast, she personally prefers to keep it rather niche and work on a long-term marketing plan which consists in positioning their animal’s genetic from a marketing point of view. ‘People are sourcing our genetics, they want our bloodlines because we’ve proven to be consistently competitive over a number of years’ (Walduck in Romensky, 2018) The Australian alpaca industry has proven to rely on strategic long-term planning, both in production and finances, in order to position themselves as breeders, producers and exports of the fibre internationally. They are also aware that the breeding selection they have is highly qualitative, even if Peru has a wider population of the animal, and that this gives them an advantage when negotiating with demanding markets.

2.3. Case study: success of Mongolian cashmere in the European fashion luxury market Ulaanbaatar, capital of Mongolia, with it’s showroom piled high with dresses, scarves, cardigans and pashminas, can claim to be the fibre’s fashion capital. After mineral resources, cashmere is Mongolia’s only other significant export: the country produces about a fifth of the global supply of raw cashmere. (Pyrkalo, 2013) Mongolian manufacturers acknowledged that after the financial crisis, global players in luxury fashion products would be looking to outsource even more their garment manufacture to emerging markets. Since Mongolia has one of the best-quality cashmere fibres, they have been developing their brand differentiation from China, the other big player and main competitor inside the Asian market. (Pyrkalo, 2013)

Mongolian companies like Gobi, a fully vertically integrated organization which supervises the whole process, from the purchase of raw material from local farmers to the final garments, both knitted and tailored, sell their products to Italian designers like Max Mara, Dunhill and Sergio Palatella, and can be also found in Bloomingdale’s while being highly popular from Russia to Washington D.C. (Pyrkalo, 2013)

In order to understand the positioning of the Gobi brand as an international referent of top quality Mongolian cashmere, its relevant to emphasize that the brand was a co-effort between the Mongolian and Japanese governments. Their shared goal was to produce the highest possible quality of cashmere and camel wool. Soon after this the construction of the Ulaanbaatar production facility, Mongolia’s capital, began and Gobi was officially settled for business. Since then, 31

it has become the iconic brand when referring to Mongolian top quality cashmere fabrics. (LeSouk, 2018) However, before Gobi opened started selling any textiles or even opened its door to the public, a team of 78 Mongolian textile engineers were sent to Japan to learn and study the art of cashmere and wool manufacturing. Their studies also focused on how to employ the latest technologies to ensure efficiency and quality to their fabrics and methods. Since the company was privatized in 2007, they have subsequently invested plenty of resources into developing sustainable production practices and creating a strong system of support or their employees. Today, Gobi tanks as one of the five largest vertically-integrated cashmere producers in the world. (LeSouk, 2018) In 2009, they opened a new branch store in Tokyo and purchased the latest production machinery around the world. These included blending and spinning machines from Italy, a fully-automated knitting machine from Japan and a Jacquard loom from Switzerland. In 2010, they became innovators once again in Mongolia by introducing the printing pattern technology in cashmere. (LeSouk, 2018)

2.3.1. Validation of Mongolia as quality check for top-quality cashmere Cashmere is historically related to luxury in Western Europe: in the XVIIIth century, there was a rising popularity of cashmere pashmina shawls amongst European aristocracy and later on, iconic designer Hubert de Givenchy stated that: ‘All a woman needs to be chic is a raincoat, two suits, a pair of trousers and a cashmere sweater’ (Yapar, 2017). In today’s fashion luxury market, one of the most expensive cashmere sweaters to be found is of the Italian brand Loro Piana, and they openly communicate they are the largest cashmere and baby cashmere manufacturers of the world. (Loro Piana, 2018) A simple, long-sleeve, baby blue 32

top-quality cashmere sweater is retailing for $1131 oh their website, while Loro Piana puts forward the Mongolian origin of their sourced fabric. Hence, they recognize the market has a high-value on the fabric. 2.4. Sustainability: the plus of the alpaca fabric in the fashion luxury market Alpacas have provided vitality, wealth and warmth to Peruvian people from different Andean regions for over 6,000 years. There are nearly three million Alpacas in Peru, representing about 80% of the entire worldâ&#x20AC;&#x2122;s population. Most of these animals belong to small, local herdsmen who continue to employ humane breeding and shearing techniques which have been passed down for generations. (Peruvian Connection: 2010) Alpacas graze between 10,000 to 14,000 feet of altitude on the harsh altiplano of the Peruvian Andes. As a result, these animals have incredibly natural coats that are warmer and stronger than wool, yet considerably lighter in weight. Their thick, luxurious fur grows naturally in over forty shades, ranging from white to black with all the greys, beiges, camel and browns in between. This provides a fine colour palette when undyed, although the lighter shades of fleece dye to beautiful shades as well. Alpacaâ&#x20AC;&#x2122;s unique durability and delicious softness makes it one of the most luxurious fibres in the world. (Peruvian Connection: 2010) In Peru, alpacas are sheared gently and humanely by hand, with each alpaca yielding about five pounds of fleece once a year during the summer season, between November and March. Once the shearing is completed, highly skilled and expert local women carefully sort and classify the fleece by hand into categories of alpaca, baby alpaca, and royal baby alpaca. This fleece sorting process is measured in terms of average diameter in microns, one micron being a thousandth part of a millimetre. Interestingly, the selection of fibre is a manual 33

process where the specialized "touch" of the Andean women that work it is the only way to classify it. These skills are handed down from one generation to the next and the women can easily distinguish between fibres whose fineness differs by only one or two microns. (Peruvian Connection: 2010) The softest, finest fleeces will have the smallest microns. Regular alpaca has an average of 25.5 microns for each hair, baby alpaca an average of 22.5 microns and baby alpaca royal an average of 19.5 microns. Baby alpaca does not necessarily refer to the fleece taken from a baby animal, although the younger animals tend to have more "baby alpaca" hair due to less exposure to the sun. Like human hair, alpaca hair becomes coarser with increased exposure to the elements and successive clippings. The finest, softest hairs are often found on the neck and underbellies of the alpaca and will usually be classified as baby alpaca or baby alpaca royal. Baby alpaca royal is considered the best pick of the baby alpaca, with the smallest microns and the softest touch. (Peruvian Connection: 2010) Once the harvest and sorting is completed, the fleeces are then processed for high-quality textile use. This can involve scouring, whereby the alpaca fibers are cleansed by using a very mild, biodegradable detergent. This eliminates any dust and grease that may have accumulated on the fibers. Once scoured, the fibres go through a carding process, which eliminates certain impurities and harsh fibres. These may also go through one last filtering process known as combing to remove any remaining impurities and short, tangled fibres. After all have been removed, the fibre can go on to be dyed and spun, where it will finally be ready for use in knitting or weaving. (Peruvian Connection: 2010) British brand Flora and Cesta states on their website that there are several 34

reasons why alpaca fiber is more sustainable than other animal yarns, and most of them are related to the physiognomy of the animal. Alpacas could be the greenest animals on the planet and are often associated with â&#x20AC;&#x2DC;regenerative agricultureâ&#x20AC;&#x2122;. When agriculture is regenerative, soils, water, vegetation and productivity continually improve rather than staying the same or slowly getting worse, something that many say is imperative to improve our degraded environment. The animals themselves leave minimal environmental impact as their hooves are softly padded and their eating and drinking habits are ecosystem friendly. Perhaps, one of the most importantly sustainable considerations is the fact that the alpacas are not harmed during the shearing process, and they can continue producing wool for many years. The process of alpaca farming does not require harsh chemicals either, meaning that alpaca farming is safe and natural for both the farmers and the environment. (Flora and Cesta, 2017) Moreover, alpacas browse on a variety of plants so there is no need to plant a mono crop for them to feed on. This enables pastures to recover more easily because they rely on natural techniques of survival that have been working for years on the same acreage. Unlike sheep and other animals, alpacas can also thrive in deserts and mountain plains because their conversion rate is better. This simply means they require fewer resources to live. One well-bred alpaca can produce enough wool to produce about four or five sweaters every year while it would take four cashmere goats to do the same in one 365-day cycle. (Bianco, 2016) Moreover, goats can graze a pasture to death, and this states clear limits to the sustainable production of raw cashmere. (Pyrkalo, 2013) There are nearly 3 million Alpacas in Peru, representing about 80 percent of the entire worldâ&#x20AC;&#x2122;s population. Most of these animals belong to small, local farmers who continue to employ breeding 35

and shearing techniques which have been passed down for generations. (Peruvian Connection, 2010)

3. RESEARCH METHODOLOGY 3.1. Introduction and Research Approach This research will be conducted through an inductive approach, as it looks forward on developing the theory after the data has been collected (Saunders, Lewis and Thornill, 2012:30) On this specific dissertation, the methodology won’t be as rigid as with the deductive approach, given the fact that collection of qualitative data, analysis of a very precise quantitative data, and new information will probably show up during the investigation process and bring new angles yet to be discovered. (Saunders et al., 2009) The purpose is to understand the nature of the problem in order to give a sense to the data collected in primary and secondary research. It starts from an observation to form a theory giving the fact there is information a priori. (Collins, 2010). This research is more business-oriented, and as such, its purpose of to be a fundamental research. In this type of research, knowledge was generated to understand a phenomenon of interest to the researcher. As UmaSekaran and Roger Bougie state in ‘Research methods for business’: “Most research and development departments in various industries, as well as many professors in colleges and universities, do basic or fundamental research so that more knowledge is generated in particular areas of interest to industries, organizations, and researchers. Though the objective of engaging in basic research is primarily to equip oneself with additional knowledge of certain phenomena and problems that occur in several organizations and industries with a view to finding solutions, the knowledge generated from such research is often applied later for solving organizational problems”. (Sekaranan and Bougie, 2013:7) The research objectives are the following: •

Define what makes a country as a sourcing-hub for top-quality knitwear.

•

Analyse the brands that have been successful in the European market 37

working with  alpaca and the key events where a fashion luxury brands is positioned.   •

Analyse a study case of Mongolia, a country which has positioned itself has sourcing - hub for top-quality cashmere.

•

Asses the awareness level of alpaca yarn and alpaca knitwear in the European market  and the competitive advantages and sustainability assets of the yarn.

3.2. Research Design The research design for this dissertation is exploratory, meaning it will facilitate the revelation of new data and insights. (Saunders et al., 2009) This approach is not intended to provide conclusive evidence, but helps to have a better understanding of the topic (Dudovsky, 2016). In this case, a business-oriented route plan that suggest precise actions that Peruvian brands and associations should take in order to become a sourcing-hub for high-qualitative knitwear will be drafted. The explorative angle tends to tackle new problems on which little or no previous research has been done (Brown, 2016) which is the case for this topic, where no exhaustive research has been conducted to date. 3.3. Research strategy and data collection Primary research will be structured using multi-mixed qualitative method and quantitative secondary data. It will include semi-structured interviews with industry professionals, as for instance, a Fabric and textiles assistant from the menswear department of a renowned French luxury brand. Also, designers and sales assistants of Peruvian and European brands that use alpaca as main fabric in their production and communication areas will be reached in order to know 38

their impressions on the market. Additionally, an official representative of the Peruvian government in charge of the commercial office of Peru in France (OCEX) will be reached in Paris for an in-depth interview. The interview will be conducted in a semi-structured format, which means certain questions shall remain as guidelines of the conversations. However, the interviewee is free to express himself without time or topic restrictions. (Collins, 2010). This interview format will also be applied on a round table conversation with three European consumers of high qualitative knitwear and knowledgeable on the fashion industry. Furthermore, the study contemplates a focus group with European consumers of fashion, in a broader sense that includes not only the luxury market but also fastfashion, vintage fashion, medium-range brands and premium brands. The focus group will be constituted by five participants. Informal interviews shall also be included in primary research: a visit to 2018 September edition of PrĂ¨miere Vision, the international event in fabrics and sourcing for the fashion industry, will contribute to sketch an overall panorama of the current state of alpaca inside the high-qualitative knitwear market. In addition, it will give the researcher a clear understanding on which knitwear fabrics are in high-demand amongst the fashion buyers and attendants to the event. The business-oriented and quantitative aspects of this study will be provided by secondary research. Articles from qualified journals and websites that refer to the alpaca fabric performance in the international fashion market shall be cited in order to provide different points of view on the topic. Additionally, a specialized study of the alpaca yarn, provided by Incalpaca group, shall be presented and analysed in order to understand the sustainability of the yarn. This research will 39

be concluded with the quantitative secondary data of exportations charts of ADEX, the official association of exports of Peru, to understand exactly how many companies are exporting the alpaca to the international market, to which countries and it what type of products or textiles. 3.4.

Data analysis

The collected data will be analysed in two parts. On the first phase, key insights shall be collected from each format. From the semi-structured interviews with official representatives of the Peruvian government, what are the commercial opportunities, strengths and weaknesses the country faces towards organizing an attractive sourcing-hub for European luxury brands. Regarding the European fashion luxury brands, the interview with the fabric and textile assistant of a French luxury brand will provide further information on why the fabric department of a fashion luxury company knows alpaca and its quality, and why they decide, or not, to purchase it on the first place. Concerning in-depth interviews with fashion luxury consumers, this study will focus into the precise features they look when contemplating to purchase a highquality knitwear garment. In the focus group, the reasons why a broader audience, that purchase fashion to a certain extent, will choose to purchase or not an alpaca garment will be discussed. Because of the number of participants, the focus group can be classified as a mini-group, which is limited to 4 or 6 people. Thomas Greenbaum described and stated the advantages of mini-groups in ‘The Handbook for Focus group research’ as the following:

‘Some researchers prefer to use mono-groups instead of full groups because they they can gain more in-depth information from a smaller group. The reason is that a group session lasts approximately 100 minutes; if 10 people are involved, the average individual gets only 10 minutes to participate. With the mini-group, the time per person is doubled, thus (theoretically) enabling the moderator to get more 40

information from each individual. Other researchers use mini-groups because they find that it is not feasible to recruit more than 6 persons for a particular group. The small size of the qualified participant universe, the cost of obtaining subjects, or the general unwillingness of some target groups to be involved in focus group research are factors that may limit the feasibility of larger groups. This is not uncommon with medical focus groups or with groups of highlevel executives of specialized businesses.’ (Greenbaum:1998, 3) In parallel, informal interviews were held during Prèmiere Vision 2018. Comments and impressions of the sales representatives of Incalpaca group and Tsonkiri group, a sourcing Peruvian brand of alpaca yarn that was approached during Prèmiere Vision 2018, were collected in order to gain further insights into the European buyer’s opinions on the alpaca fabric. The reports of Incalpaca group will provide the precise technical arguments to present to the European luxury fashion buyers. Physical characteristics of the fabric, ecological and social sustainability, the high performance on extreme weathers and the possibility to develop a wide range of products from it. Finally, an overview of the Peruvian brands that are relevant exporters of the alpaca yarn and the revenues they generated this year versus the previous year 2017 shall be contemplated in order to size the potential of the business.

3.5.

Ethical issues

Because of the business nature of this study, an Information Sheet was developed in order to be as transparent as possible with the participants. This document included the specifications and clear objectives of the research for academically purposes. (Refer to Appendix 1) Nonetheless, as this research has been developed with exclusive interviews from employees placed at French luxury fashion houses, as well as official representatives of the commercial office of Peru in France, the privacy of the information was priority. After having the 41

confirmation of the lecture of this document, a Consent Form was extended previous to every interview in order to have a written and formal accepting of their involvement.

The study will also contemplate a focus group with European consumers of fashion, in a broader sense that includes not only the luxury market but also fastfashion, vintage fashion, medium-range brands and premium brands. The focus group will be constituted by approximately five participants. Likewise, a consent form will be extended in order to assure that the results given by the participants can be analysed and referred to as reliable data for this academic project. 3.6.

Limitations

The main limitation for this academic project was geographical. Given the fact that some of the key interviewees are based in Lima, or in Arequipa, in Peru, a seven-hour difference and an impossibility to have a face-to-face conversation, which would have been the ideal in order to engage further into the topic, presented a challenge to the primary research. Besides, this impossibility to travel to perform the semi structured interviews did not allow the researcher to reach the highest spheres of official organizations such as Mincetur and PromperĂş. Besides, there was the impossibility to visit alpaca fabrics and headquarters of companies like Incalpaca or Mitchell group in Arequipa, Peru, and do interviews and participant observation. However, there was a possibility to do long-distance interviews, a formal presentation and a meticulous coordination of the dates and times of the interviews which permitted to have a suitable exchange. Another limitation was the accessibility to insiders of the fashion luxury industry. The interviewee on this category was reached due to the fact that she is doing 42

her Istituto Marangoni internship as fabrics and materials assistant at Louis Vuitton Homme. Therefore, she had first-hand information and exclusive access to the opinions of fashion luxury buyers, besides her own impressions on what she experienced as being part of the fabrics department. As for the participant observations in PrĂ¨miere Vision, there were actually limitations regarding the approach to the representatives and sales assistants of the Peruvian sourcing brands Tsonkiri and Incalpaca. Mainly, that a semistructured interview could not be conducted due to the fact that they conversations took place at the event, and frequently, potential buyers and visitors were coming to their stands, cutting the thread of the conversation. This was accepted from the beginning by the researcher, given the fact that companies were in the event to concrete business and establish further connections. While they agreed to give information, insights and opinions on the topic, the situation was not ideal for academic purposes and the conversations were constantly interrupted. In spite of this, there was valuable information as a result of informal interviews and direct observation of both of the companies. Finally, a clear limitation when reaching the end of the information recompilation was that to draw a line on where to finalize this stage. It became clear when drafting the Findings and Discussion chapters that the primary and secondary research was overwhelming and could not be fitted all into the structure of this study. An editing process was executed, in order to choose the most relevant information.

CHAPTER 4. RESULTS The following chapter is a selection of the most relevant qualitative and quantitative findings of the researcher regarding the topic. As mentioned in the limitations section of the Methodology chapter, further material, particularly semistructured interviews, was performed. However, the following edit is considered the most pertinent.

4.1. Qualitative findings

4.1.1. Interviews with industry professionals and European fashion luxury customers The fashion professional selected was Irune Barrenechea, a student from Istituto Marangoni at the Contemporary Fashion Buying Master. At the time of this research, Ms. Barrenechea was completing her internship at the Louis Vuitton Homme, for which she later got hired on a full-time job post. Specifically, she was assigned the role of Fabrics and Material Assistant at the Fashion Design department. The main objective of this interview was to understand the fashion luxury houses position towards the alpaca fibre, and the reason why they decide, or not, to use it on their seasonal collections.

From her role at the French fashion luxury brand and understanding of the business dynamic, Ms. Barrenechea considered that when it comes to alpaca, what usually happens is that the fabric is highly expensive and this reflects on the final costs. However, due to the fact that the fiber is not widely known for regular customers, as for example cashmere, they do not wish to purchase it. She confirms that professionals inside the fashion industry are well-aware of the the 44

fiber and it’s qualities, but that is rather complicated for designers and textile specialists to sell it to the brands final customers. The interviewee revealed that for the Fall Winter 2019 collection, the Louis Vuitton Homme design department was considering to work some specific pieces in alpaca. Nonetheless, she also stated that the brand does not buy the from Peruvian suppliers but from Italian ones, particularly Fratelli Piacenza. She has also noticed the fact that alpaca is not promoted nor commercialized as a Peruvian yarn, but as an Italian one, which is natural when the companies presenting, promoting and selling the fabric are, effectively, Italian. There relies the first detachment of the alpaca yarn from Peru, and, at the end, the final customer does not even take it into account in their decision buying process. They unawareness begins at the starts even before the design process has started.

Ms. Barrenechea states that this situation is also due to a European

problem on the current regulation of the origin of products. As for today, this regulation is not strict at all. A garment could be made 20% in China, 20% in Bangladesh, 40% in India and 20% in France and the label can affirm that the product is ‘Made in France’. From a marketing point of view, Peru founds itself left behind because it is not on the top of mind of fashion buyers as a country for luxury fabrics. It resembles more logical and immediate for them to talk about Italian luxury knitwear rather than Peruvian luxury knitwear.

“For me, the problem relies in the process between the yarn and the fabric. The yarn comes from place A, but the fabric is made in place B, and is in that in-between that Peru looses the opportunity to brand alpaca as their national luxury fabric.” (Barrenechea, 2018)

When asked on what type of promotion worked should be implemented in order to start creating an immediate association product-country as with what happens

with cashmere from Mongolia, leather from Morocco and fur from China, the interviewee emphasized that it would required a well-structured and long term branding and positioning work. Additionally, she stated that this initiative usually comes from the association of exporters or from the commercial offices of the countries who look forward to promotes their fibres and yarns business-wise. Today, Peru doesn’t have the required organization, structure and long-term planning for its alpaca industry. Finally, Ms. Barrenechea points out the technical sides that a French luxury brand consider whenever considering to purchase a new fabric.

“In order for a luxury brand to choose alpaca for a collection, there are some basic questions the buyers will take into account, such as What is the quantity of alpaca Peru exports annually? What is the quantity they export to European countries? Do Peruvian suppliers have enough capacity to deliver big orders in a determined amount of time? How do they promote their sustainability of their yarn?” (Barrenechea, 2018) Another major concern that buyer from a luxury fashion brand would have facing the decision of placing a relevant order of alpaca to a Peruvian supplier for the first time would be if they have the capacity to deliver a standardize quality of material on time. “If a brand like Louis Vuitton, for instance, decides to buy alpaca for a collection, they will need to buy at least 100 meters, when each meter has an average cost of 100 euros. Also, you don’t know how much alpaca is used on the fabric. Is it a mix of 20% alpaca and 80% of something else? Merino wool, silk, low quality cool? There is no strict regulation for that.” (Barrenechea, 2018) From the answers of the interviewee, it is clear that in the current state of the market, a European luxury fashion brand as big as Louis Vuitton would clearly hesitate to do a significant purchase of Peruvian alpaca. The main reason relies on the fact that they already have a regular supplier of high-quality alpaca that 46

fits its standards, and it comes from Italy, another European country recognized for its fine treatments of yarns and fibres.

(Refer to Appendix 2 for the interview’s transcription) 4.1.2. Interview with Sofia Carreras Polack, official member of the Commercial Office of Peru in Paris

The following semi-structured interview was conducted with an official representative of OCEX, the commercial offices of Peru abroad. In Paris, France, the reached representative was Ms. Sofia Carreras Polack, specialist in International commerce.

At the time of this interview, Ms. Carreras had just received a Peruvian brand team and official government organizations in Paris, that were involved in the exportation and promotion of the alpaca fibre in the European Market. They had gone to Prèmiere Vision as a main event, but Ms. Carrera and other delegates of OCEX Paris also took them to the most important Parisian department stores (Le Bon Marché, Galeries Lafayettes, Printemps) for them to see and understand the dynamics and offer of the premium and luxury markets. ‘Quality Peruvian fabrics such as pima cotton and alpaca can not be offered at massive stores like La Redoutte or Monoprix to start. Because of their elevated prices, they would have entered to the pret-a-porter and luxury brands and stores. But because these segment of the market has strict codes of quality, communication and positioning, I understand that many of the brands and representatives we brought from Lima were impressed by this, but it is the only way to enter this luxury market.’ (Carreras, 2018) According to the specialist in international commerce, Italians knitwear suppliers are the ones that are selling Peruvian alpaca to European brands and companies, 47

but they never mentioned the original sourcing country, also known as appellation of origin. She mentions her experience with an specific French luxury fashion brand, Maison Lener, who are also the owners of Chémins Blancs, a more affordable line, and Trench and Coat, which targets a younger audience. Ms. Carreras herself bought her latest winter alpaca coat from Maison Lener instead of a Peruvian fashion brand. The reason relies that she couldn’t find any Peruvian fashion brand that did proper long coats, suitable for the European winter.

‘The main reason why I haven’t bought alpaca coats in Lima is that they are too short. You can barely find long coats that will keep you warm in the European winter, and that is a problem. So I bought my alpaca coat at Chémins Blancs after discovering them at Who’s Next event. I was looking for a company to invite them to the business-meetings around the alpaca fibre that took place in Cusco, Peru, last year, in the SurExporta event. I discover Maison Lener and is top quality, perfect for European winter. Chémins Blancs is their more-affordable version, but even Maison Lener with their top-quality, their costs retail in average at 400-500 euros. So I talked to the director of Manteaux Lener and I invited him to PromPerú 2018, which took place in April this year in Lima.’ (Carreras, 2018) She states that after the event, Mr. Lener and his team were very excited about the prospective of working with Peruvian alpaca. Unfortunately, he told Ms. Carreras that he could not find a Peruvian alpaca supplier that offered him the quality he was looking for at a price that was more competitive than what he was already paying the Italian suppliers. He made clear that did not mind to import from Peru, which is far and outside the European Union, but the factors mentioned above were crucial to him and his business.

Ms. Carreras insisted throughout this part of the interview that the reason the French businessman was not convinced by the Peruvian suppliers was not exclusively a matter of price. It was because he wanted a finishing of the fabric with the same quality as the Italians usually did, and he couldn’t reach any 48

agreement with the Peruvian supplier companies he encountered.

The interview also highlighted an important angle for the potential of the whole alpaca luxury business. Ms Carreras stated that:

‘There is something I do not see on the European market, regarding the design possibilities of alpaca, and that could even enter the pret-a-porter category, is accessories. Scarves and gloves, mostly. One of the thing I see frequently, every time I go to Peru, just in our stand of the textile showroom we did on July 2nd 2018, there was only one brand specialized in alpaca scarves, and they was only one brand with a scarf design suitable for the European winter: big, wide, chunky and oversized. I myself have had difficult times to find alpaca scarves made in Peru warm enough for winter in Paris.’ (Carreras, 2018) She considers that possibility that Peruvian alpaca could enter the European luxury market not only with coats and sweater, but also with more accessible pieces that could reach a larger market such as hats, gloves and scarves and eventually bedding linen, cushions and knitted-pieces for home decoration.

“Alpaca de Perú” is the branding that today the Peruvian government promotes in order to push forward Peruvian alpaca. In New York City, the October window display of Bergdorf Goodman, one of the most important high-end department stores in Manhattan, featured an exclusive pop-up of “Alpaca de Perú” with the design of AYNI, Meche Correa, Anntarah, Alessandra Petersen and Escudo. (Greenstein:2018) When it comes to Paris, premium fashion brands like Leon and Harper are displaying the “Alpaca del Perú” tag on their collections. Even if we are not discussing the same range of awareness levels, Ms. Carreras points out that Leon and Harper have started to use Peruvian alpaca as a spring summer fibre.

‘Here in Paris the spring is still chilly, it is not like Peru. It rains and the temperature can be down to seven degrees. And alpaca for summer is not unthinkable either. In their Lima stores, Kuna has very light tops, tshirts and handkerchiefs for summertime, and that could also work for Europe. A communication and branding work needs to be done in order to implement the concept of alpaca also as a light fibre, suitable for spring summer season. It’s even better than linen, which is well-known in Europe to be a summer textile, but personally, I find it itchy and it wrinkles very easily. I think a light-version of alpaca is way more convenient. But all of that has to be communicated, presented and explained.’ (Carreras, 2018) The accessories proposal re-emerges in the conversation. There is a big market to present alpaca accessories in France. Foulards and écharpes are a classic in French wardrobes, and an accessory line of alpaca mixed with pima cotton or silk could have a strong response from the market. Additionally, the interviewee points outs all the range of knitted-products that widen the possibilities for promoting Peruvian alpaca: carpets, rugs, bedding linens, cushions, etc.

As far as the connection fibre-country, and when asked about how strong was the link in European customer’s minds of cashmere and Mongolia, Ms. Carreras stated that it should be mandatory that all foreign brands that wish to use Peruvian alpaca fibre state that its from Peru. Unfortunately, most of the luxury fashion brands do not do it. The interviewee considered there is a lack of information on the sustainability and social side of the fibre.

‘There is other country that are producing lots of alpaca fibre, Australia and New Zealand. Even in the last Alpaca Fiesta event that took place in Arequipa in October this year, there was an Australian brand that was participating. Today the alpaca has a real opportunity in the market because of its social sustainability side and the ethic treatment of the animal, specially since there was a big scandal in May of this year (2018) regarding the mohair wool. Long story short, PETA revealed that 12 farms of Angora goats in South Africa, which sources half of the mohair wool used in worldwide, had terrible conditions for the animals. Mistreatment, violence and death, and H&M and Zara came out publicly to say they would not use mohair on their collections anymore. The cashmere has been seen as a luxury fabric for a very long time and has 50

managed to enter the massive market in many ways. Look at the population of those Gobi cashmere goats versus the population of alpaca worldwide. Alpacas are way fewer. What Peru has to do is communicate that alpaca is a real sustainable fibre. There are plenty of technical reasons why it is superior, and even in the history of the fibre: the textile techniques of weaving alpaca garments in the Andes have existed since before the Incas. There definitely could be a better communication strategy.’ (Carreras, 2018) Ms. Carrera concludes that a branding plan and a long-term communication strategy has to be implemented in order to make Peru a sourcing-hub for Peruvian alpaca. Even though is it perceived as a luxury fabric for a small sector, she considers that it should also have a more affordable side, by pushing forward accessories and less expensive pieces, to make it more popular to a wider audience.

(Refer to Appendix 3 for the interview’s transcription)

4.1.3. Informal interviews with Peruvian alpaca sourcing brands in Prèmiere Vision September 2018

On the 21st October, Prèmiere Vision events was held at Paris Nord Villepinte. The event gathered a vast number of fashion suppliers, buyers and people related to the garment industry from around the world. Amongst them, the Peruvian family-owned textile company based in Peru, Tsonkiri, which also does garments for American fashion brands, and the Incalpaca group, the biggest sourcing group of Peruvian alpaca. Both offer high-quality alpaca fabrics and finished alpaca garments for a ready-to-wear.

Figure 7: PrĂ¨miere Vision 2018 entrance (Seminario, 2018)

The Tsonkiri stand was located on Hall 2, the Sourcing Connection section of the event. They provide textile technical support, product development, impeccable cut and sewing production and logistics for sourcing and exporting garments. With main customers as Rag&Bone, Rossie Assoulin, Billy Reid and American department store Barneys, they offer the expertise of their textile development team to provide the exact quality that international buyers are looking for. Additionally, their monthly production capacity is of 25,00 pieces of garments for fashion styles and 40,000 for basic styles, as they inform through their official website www.tsonkiri.com. Once in the event, Franko Garrido Huguet, the commercial representative of the brand, explained that they had been participating in fashion events since 2007, but on this particular occasion, he did not agree with the location they had been given inside PrĂ¨miere Vision. He considered Hall 2 was not the sector with the highest traffic, and it certainly did not attract the customer profile they were looking for. When asked about the country of origin of the potential customers, he mentioned Nordic countries and the United States, to whom he explained the 52

concept of Tsonkiri as high-quality alpaca fiber and an ancestral Peruvian savoire-faire techniques.

Figure 8: Tsonkiri stand at Hall 2 of Prèmiere Vision. (Seminario, 2018)

Figure 9: Tsonkiri garment offer for international buyers (Seminario, 2018)

Mr. Garrido Huguet stated that his brand was not given the appropriate financial support by the government organizations, and that this resulted in a big disadvantage, specially because the competition was quite high in Prèmiere Vision. Countries like Turkey had branded the event with the campaign “Turkey, discover the potential” sponsored by organizations such as the Aegean Apparel Exporters Association and the Istanbul textile and raw materials exporters 53

association. The Peruvian participant stated that such a communication and marketing campaign gave a clear push to suppliers from that country inside the event. Mr. Garrido Huguet considers that a joint effort should be made between OCEX Paris and Peruvian Ministry of Commerce and Tourism in order to push forward upcoming Peruvian sourcing companies such as Tsonkiri. Nonetheless, he stated that the exportation strategies of these same companies has to be optimised in order to meet the times and high-standards of international fashion buyers.

Figure 10: “Turkey, discover the potential”, on Hall 6 entrance (Seminario, 2018)

Figure 11: “Turkey, discover the potential”, outside the Gare du Parc des Expositions. (Seminario, 2018)

The stand of Incalpaca, one of the biggest sourcing companies of Peruvian alpaca, was to be found at the Tailoring section of Hall 6 at Prèmiere Vision. The assistance was significantly higher than at Hall 2, and the constant presence of potential customers did not allow a formal interview with the members of Incalpaca staff. However, Fernanda Chirinos, marketing manager of the brand, briefly explained the story-telling on how Incalpaca supports more than 50,000 families in Peru, and how a coordinated marketing strategy is very much needed 54

from the three main actors that thrive the alpaca business today: the Asociación International de Alpacas (AIA), PromPeru and the ministry of Commerce and Tourism.

Figure 12: Incalpaca stand at Prèmiere Vision 2018. (Seminario, 2018)

Figure 12: Incalpaca textile offer at Prèmiere Vision 2018. (Seminario, 2018)

When consulted about the main sustainability arguments to present the Peruvian alpaca as a competitive fibre to European fashion buyers, Ms. Chirinos referred to the ‘Why Alpaca’ report, a internal document created by the Incagroup, the corporate to which Incalpaca belongs.

(Refer to Appendix 4 for the report of ‘Why Alpaca’) 55

On this report, we can find the ecological, social and technical aspects that make the Peruvian alpaca highly competitive when compared to other fibres. Concerning the ecological arguments, alpacas do not damage the pasture when grazing, alpacaâ&#x20AC;&#x2122;s feet do not damage the land and the animals nibble the tops of grasses and do not rip the plants out of the ground, resulting in less disturbance of the vegetation allowing opted to grow back. In contrast to goats and sheep, which have sharp hooves that damage pasture and soil, alpacas have two toes with toenails on top and a soft pad on the bottom of each foot that minimizes their effect on the land. In other words, the grass system is not disturbed by alpacas, allowing the soil and their habitat to remain intact. Furthermore, the natural colours of alpaca are undyed, hence, environmental issues associated with the dyeing process are minimized, the treatment system for the water used on the washing process requires less chemicals than for another fibres and the alpaca fibre is an excellent insulator of heat. Overall, Ms. Chirinos considered that the long-term ecological advantages of alpaca, plus the support the formal industry gives to Andean communities and their cultural history, not to mention the high-quality of their product and the finishing standards that made several European, East-Asian and American buyers come to their stand during the event.

4.1.4. In-depth interviews with European luxury fashion customers and industry insiders Three European fashion luxury consumers were interviewed in order to know their perceptions and opinions on alpaca made-garments. They were Irune 56

Barrenechea, fabric and textile assistant at Louis Vuitton Homme; Laureen Gazio, former sales assistant for Proenza Schouler at Le Bon Marché; and Patricia Kanclerz, a regular fashion luxury consumer. The conversation was held around the semi-structured interview questions presented in Appendix 4.

First three words that come to mind when thinking of high-quality knitwear ( 1

I.Barrenechea

Cashmere

Vicuña

Loro Piana

P. Kanclerz

Softness

Price

Good-mood

L. Gazio

Softness

Quality

100% pure fibre

For one of the participants, cashmere was the first I concept that came to mind, a fabric. For the other two participants, the soft texture of the garment was the most important feature to consider. It is important to note that for one participant, the Italian brand Loro Piana was synonym for high-quality knitwear. When discussing further on this, other brands such as Isabel Marant, and Brunello Cucinelli were also mentioned as a guarantee of luxury knitwear, even though Brunello Cucinelli was tagged as “too traditional and boring in terms of design”. Independent and upcoming brands such as Paloma Wool, from Spain, and Iris and Ink, were considered as a premium and affordable option. Japanese retailer Uniqlo was accepted as an even more affordable and wearable option. All three of them agree that buying a luxury knitwear piece from a brand relies basically on the positioning and quality of the brand.

Favorite material regarding high-quality knitwear I.Barrenechea

None. Would prefer synthetic fibres or recycled materials

P. Kanclerz

Cashmere. If not, merino wool.

L. Gazio

Merino wool or something equally soft. 57

Cashmere appeared once again as top referent for high-quality knitwear, even though merino wool was mentioned as a second option.

Do you think that high-quality cashmere comes from a specific region or country? I.Barrenechea

Difficult to be sure.

P. Kanclerz

Australia

L. Gazio

Mongolia, but also other south-east Asian countries

Only one of the participants stated that she made a direct link between cashmere fibre and Mongolia. Australia was also mentioned as a region for quality knitwear.

Do you know alpaca knitwear? And if you do, what do you know about it? I.Barrenechea

Yes, that they are very qualitative

P. Kanclerz

Never heared of it.

L. Gazio

Yes, from a Ecuatorian designer that had a brand with alpaca.

Regarding her personal experience with the alpaca fibre, Laureen Gazio, who lived in Ecuador for three years, stated:

â&#x20AC;&#x153;I worked with a girl from Ecuador who was building a brand around high quality alpaca. So I was very surprised because she told me, most of the time is not used by luxury brands. And what she wanted was to create was a brand with interesting designs, using the fibre. (â&#x20AC;Ś) The touch is really nice and I was surprised with all the designs she had because it was something really different: coats, sweaters, very different things. And I was surprised with all the things you can create from it. For her, traditional designs with alpaca were very folkloric, also because she is from Ecuador and she wanted to use a fabric from her country but not to sell it exclusively to tourists who go to Ecuador. She wanted to build a brand around a national product but 58

that can be sold to everyone without looking too folkloric.â&#x20AC;? When asked if they heard reviews regarding alpaca knitwear, they all answered no. Immediately, a selection of three different alpaca garments, a chunky oversized burgundy sweater and a light beige turtleneck sweater from the brand Ayni, and a red scarf from a local Peruvian brand based in Cusco, were shown to the participants.

The first question, by Ms. Barrenechea, was if they were 100% made of alpaca. None of them were, but the proportion was at least 70% of alpaca on each piece. If only one pleased them, they were asked to specify.

Would you wear the alpaca-garments shown to you? I.Barrenechea

Yes for the chunky oversized burgundy Ayni sweater, but she was worried the piece was too heavy.

P. Kanclerz

Yes. Design wise, she liked the Ayni sweaters but was worried on the fact that the baby alpaca scarf felt itchy.

L. Gazio

Yes for the a light beige turtleneck sweater of Ayni.

(Refer to Appendix 5 for the the full transcription)

4.1.5. Focus groups with French customers of a broader range of fashion brands A focus group of six French customers of premium and fast fashion brands was selected for this study. All of them are currently living in Paris, an although they are not highly familiared with the universe of luxury knitwear, it was considered relevant to also have insights on this audience. Specially, regarding the comments of Ms. Carreras Polack about a long-term strategy scenario on the implementation of high-quality Peruvian alpaca in Europe, when it reaches a more massive market audience. 59

What is the main feature you look for when shopping? J.N. Chaintreuil

Quality

Audrey Rissier

Original design

Anna Rollet

Design and fabrication

Yann GrĂŠgoire

Price and quality

Janeth Chavez

Quality

Eva DaCosta

Price

Quality was the most important feature in the decision-making process for a high quality knitwear purchase. Design and price were also mentioned as relevant features.

What is your favourite material when you are looking into buying high-quality knitwear? J.N. Chaintreuil

Cashmere

Audrey Rissier

Cashmere and hemp

Anna Rollet

Cashmere

Yann GrĂŠgoire

Cashmere

Janeth Chavez

Cotton or similar

Eva DaCosta

Cashmere

Cashmere almost made the 100% of the answers when asked for their favourite knitwear material. When asked about what was the first brand that came to their minds when talking about cashmere, the unanimous answer was the French retailer Eric Bompard. Do you have an idea that high-quality cashmere comes from a specific country or region? J.N. Chaintreuil

India

Audrey Rissier

Mongolia

Anna Rollet

Mongolia 60

Yann Grégoire

Mongolia

Janeth Chavez

Mongolia

Eva DaCosta

Mongolia

It was clear that for a wider audience, Mongolia and cashmere are two concepts strongly fixated on customer’s minds as a validation of top-quality. When asked about high-quality alpaca knitwear, Anna Rollet, Audrey Rissier and Eva DaCosta had a notion about it. The last one pointed out that it seemed very expensive.

Impressions on the chunky oversized burgundy sweater of Ayni. If presented the opportunity, would they buy it? J.N. Chaintreuil

Liked it, but immediately wanted to know how much alpaca was in the sweater’s composition. He would buy it.

Audrey Rissier

If it was vegan, she would buy it.

Anna Rollet

Thought it was warmer than cashmere. She would buy it.

Yann Grégoire

Didn’t made comments but said he would buy it.

Janeth Chavez

Said it was warmer than cashmere and did not mind the thickness or weight. She would buy it.

Eva DaCosta

Thought is was soft, but not as soft as cashmere. She would buy it.

Most of the participants were totally unaware of the fiber, its design possibilities and the fact that it could be worked in different thickness, weights and compositions.

If a garment costs more because it is certified that is sustainable, would you agree to pay a bit more for it? J.N. Chaintreuil

He would pay, from 20 to 50% more

Audrey Rissier

If it is certified and vegan, yes.

Anna Rollet

He would pay, up to 50% more

Yann Grégoire

No comment

Janeth Chavez

Yes, but wouldn’t buy alpaca every time.

Eva DaCosta

No comment

The link between price and sustainability was directly confronted with the participants. From all six of them, four of them stated they would pay more for a sustainable alpaca garment.

(Refer to Appendix 6 for the full transcription)

4.2.

Quantitative findings

4.2.1. Exportations key figures of Peruvian brands by ADEX (Peru’s Association of Exporters) Ms. Flavia Sanz, exportation manager at ADEX, was reached in order to obtain precise data regarding exportation of Peruvian companies, their products and their destination countries. The periods selected for this quantitative analysis in order to compare exportation shifts were January to August of 2017 and January to August of 2018. The charts contemplate three categories: textiles exportation, finished garments exportation and textiles and finished garments exportation altogether. This will allow to have a clear overview on how Peruvian alpaca is exported the most, as a fabric or as finished garments, and to which countries. As a fiber, alpaca is the #1 exportation, with Michell y CIA SA with $65,6 million on exportation on 2018, with an increase of $15,858,004 comparing it with 2017 62

key figures. The current price in 2018, $25,67 per kg, also increase $6,48 regarding the previous year. Inca Tops SA figures as number 2, less than $26 million dollars in value, and Incalpaca SA features the list in number 14. It is important to note that Incalpaca SA has the highest price per kilo on the alpaca fiber, almost the double of Michell y CIA SA. In the list of the first 20 countries where alpaca fiber was exported, Italy, Norway, United Kingdom, Germany, Ireland and Sweden are highlighted as most relevant. Italy figures as the number one European buyer, having purchased 4,417,905 kg. of alpaca on the January-August period of 2018. The most exported fibers was alpaca fine yarn, treated for clothing production.

As finished knitwear garments, Incalpaca features as #17 on the ranking, having exported $1,844,494 more on 2018, an inferior figure when compared to the alpaca fibre reach with Michell y CIA SA group seen previously. Regarding European countries, their garments reach Germany, France, United Kingdom, Italy and Netherlands. Concerning volume, alpaca knitwear garments did not feature on the top 20 ranking of exportation knitwear on 2018 nor 2017.

As textiles and finished knitwear garments combined, Michell y CIA SA and Inca Tops SA lead the ranking on value of exportation and price per kilo. Italy is number and Germany number 8 when it refers to European buyers, and the fine alpaca yarn ranks in position 3 when combining both charts. 63

The previous analysis reveals that today, the Peruvian alpaca has a higher reach on the European market as a high-quality textile than as finished knitwear garments. Regarding European countries that purchase alpaca the most, Italy is at the top of the list, which confirms the comments on Ms. Carreras Polack on how Italians are working the finest Peruvian alpaca fibres and selling the final products without appellation of origin. (Refer to Appendix 7 for the complete ADEX charts)

CHAPTER 5. DISCUSSION The purpose of this research was to analyse if Peru could become the nextsourcing hub for high qualitative alpaca knitwear. From the outcomes of this study, several points shall be discussed.

From the focus group findings and the comments of the luxury fashion consumers and industry insiders, it is clear that cashmere is praised as the top-of-mind high quality fabric in the European market. Several luxury fashion brands, mainly Italian, and premium stores in France, as Eric Bompard, have firmly installed the notion that cashmere is the ultimate luxury knitwear for autumn-winter season. It was also confirmed that the appellation of origin was directly linked to Mongolia, as proposed at the beginning of this study, with mention to another south eastern countries as India.

In the matter of positioning in the European market, Peru has not implemented concrete and coordinated actions to raise awareness of the alpaca fiber in key events of the industry such as PrĂ¨miere Vision. Furthermore, associations from countries like Turkey have branded the event in various way, and by doing so, putting forward their offer with an appellation of origin.

Today, Peru complies with the raw material as it holds the largest population of alpaca in the world. However, this is not enough as many luxury fashion buyers prefer to purchase the fabric already treated from Italian suppliers, which they consider more reliable in terms of delivery times and high quality standardization of their order. Peruâ&#x20AC;&#x2122;s main competitor, Australia, has followed a financial and marketing plan to promote alpaca since 1990, backed by a formal organism such 65

as the Australian Alpaca Association.

As the analysis of the ADEX business charts reveal, the alpaca fabric has a significant higher demand in exportation volume than alpaca finished garments. From 2017 to 2018 the three companies that featured the ranking had a significant growth. Mitchell y CIA SA group had a 31,8%, Inca Tops is 26,82% and Incalpaca had a 30,53%. As garments, Incalpaca showed an increase of 30%. As fabric and garments combined had the following increase: Mitchell y CIA SA had 21,31%, Inca Tops 26,82% and Incalpaca, 30.21%. Overall, Peruvian alpaca is currently more relevant in the international market as sourcing fabric than as recognized Peruvian-branded garments with an added-value. This study contemplates the position of Peru as a sourcing hub of high quality alpaca knitwear, and that is not the current scenario with the actual exportation figures.

The in-depth interview with Ms. Carreras Polack, representative of OCEX Paris, shows that even before implementing a business-oriented communication plan to promote Peruvian alpaca in the European market, some previous steps have be taken into account. A co-effort between the Peruvian government and the private sector is needed in order to officialise the appellation of origin, which needs to be mandatory whenever a foreign brand purchases alpaca fabric or alpaca garments as sourcing. This would incentive European sellers of Peruvian alpaca, particularly Italians, to state the source of the fabric in their productions.

Once the appellation of origin is officially stated, a long-term communication, branding and promotion strategy of the Peruvian alpaca needs to be implemented

by an entity with a deep-understanding of both the Peruvian alpaca industry and the European fashion luxury market.

Rosario Pajuelo, the director of the Commercial Office of Peru in Brussels in 2018, stated that there are three key points towards a high-positioning of Peruvian-alpaca fabric and brands in the European market. The first is the foundations for the promotion of the fiber and the story-telling. The creation of content is crucial in this phase: videos, catalogues, photos, testimonies, infographics. And they have to be in several languages: English, French, German, Italian. She says that, today, there is not a pool of official content to use in a solid communication strategy. Second, is understanding the consumer. Because of its quality, durability and sustainable characteristics, the alpaca is not a mass-market fabric. European customers buying alpaca are usually in an age range of 28 to 60 years, with a certain socioeconomic status and purchase power above the average consumer. Third, is putting a heavy emphasis on the Peruvian-alpaca garments as ethically-produced and sustainable-certified. The sustainability trend is projected to have a heavy impact in the decision-making process of consumers.

As for punctual actions, the presence in fashion trade shows, particularly Prèmiere Vision and Who’s Next, and a possible branding of an event such as the case mentioned previously with Turkey, would be appropriate if there is a large number of Peruvian-brands participants involved in the alpaca business. A strong and clear communication, highlighting the technical features shown in the ‘Why Alpaca’ report and the opinions of European customers, such as the ones gathered in this study, would help to sell the fabric and garments to luxury fashion

buyers, and ultimately, potential customers. The softness of the fabric, the superior quality when compared to other fibres such as cashmere or merino wool, the natural fiber colours which do not damage the environment, the versatility to compose a wide brand portfolio, the ancestral weaving techniques from Andean communities and the sustainability factor would be solid arguments when presenting and implementing the Peruvian-alpaca positioning in the European market in a structured, massive scale.

On the long-term, the projected scenario would present Peruvian alpaca brands being placed in strategic wholesale showrooms, fashion boutiques and department stores in Paris and other European fashion cities such as Amsterdam, Berlin, London and Milan. Although this study makes an emphasis on the promotion of Peru as a sourcing-hub of high quality alpaca knitwear, it is important to mention that Peruvian brands that currently use alpaca and choose to put it forward as part of their communication plan, should be able to decide which way is more appropriate to do so while respecting their own identity. A brands identity is crucial in the luxury fashion business, and any pre-fabricated speeches will stand out not in a positive way, specially when used by several brands trying to break into a new market. The brands identity should be put forward, as the pret-a-porter luxury market works with different concepts than the textile luxury market. An umbrella strategy is strongly suggested, where the guidelines and official information of Peruvian-alpaca fabric and garments are promoted from a single source, and every brand under this umbrella gets to communicate their proposal in their own marketing terms while maintaining the ethos of the umbrella strategy. The aim of creating a red-thread transversal to Peruvian brands of alpaca fibre,

sourcing and garments is to generate a strong awareness and high positioning in the European knitwear industry, and, ultimately, in their customers.

Finally, a wide range or products could be a starting point to insert Peruvian alpaca knitwear in the market. Gloves, scarves and socks can be part of a product portfolio that shows the versatility of the yarn and is priced at ranges that are more affordable than long winter coats, which is the most expensive item in terms of knitwear clothing. Simultaneously, the potential of light alpaca garments for the spring-summer season is yet to be exploited inside the European market.

CHAPTER 6. CONCLUSION Today, Peru is not considered a sourcing hub for high quality knitwear garments. Is it not on the top-of-mind of final European customers, both in the luxury as in the fast fashion sector. Even if there is an awareness of the high-quality of the fabric by professionals inside the fashion luxury industry, for the average fashion customer, the fabric is still unknown. Likewise, this does not help to justify the fact that they price is often as high as cashmere, if not higher, when cashmere has been a long-time renowned luxury fabric in the eyes of the European fashion industry. Regarding the fashion buyers that eventually choose to purchase Peruvian alpaca fabric as sourcing, there is no further incentive, either from a price perspective nor from an appellation of origin standpoint, to put forward the fact that the fabric used in their clothing line is â&#x20AC;&#x153;Alpaca del PerĂşâ&#x20AC;?. Synchronised initiatives, both from the Peruvian government as from the organizations that have direct contact with alpaca companies, mainly the medium-size and upcoming, are crucial in order to establish the foundations of a long-term strategy. However, the key action in order to starting unravelling this long scale project, is having the appellation of origin of Peruvian alpaca as mandatory requirement for any foreign brand, company or retailer that wishes to purchase either the yarn, the fabric or the garments for sourcing purposes. As part of the communication strategy, it is considered there are three main points to be put forward in order to reach the final customer: high comfort and softness, modern and contemporary design, and ethical sustainability, both ecological and social. Overall, a transversal story-telling narrative based on the ancestral origin of the fiber and its millenary weaving techniques passed by generation in several Andean communities, can homogenise the starting point of this strategy. The 70

branding should firmly remain as “Alpaca del Perú”, and a more fluent relation should be established between fashion luxury buyers and specialized fashion journalists that are invited to events such as PeruModa in Lima or AlpacaFiesta in Arequipa. Generating awareness on a fiber in the international fashion market with an appellation of origin is not a plan that can be fulfilled in a short-term vision. Today, Peru is not considered a relevant sourcing-hub of high-quality alpaca knitwear. Nonetheless, with the two main steps mentioned previously, implemented in a time lapse of at least five years, some concrete results would start to be tangible. Not only in terms of exportation, but in awareness of the fibre and its origin, which would bring further business and high positioning to Peruvian alpaca knitwear sector.

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Rossiter, J and Bellman, S. (2005) Marketing Communications: Theory and Applications. Pearson Australia. Samli,A.C., Browning, J.M. and Busbia, C. (1998) The Status of Global Sourcing as a Critical Tool of Strategic Planning. Journal of Business Research Saunders, M., Lewis, P. and Thornhill, A. (2012) Research Methods for Business students. Pearson Education Limited Singh, B. (2017) Gobi: Revolutionary cashmere from Mongolia.[Online] [Accessed on August 3rd, 2018] https://www.lesouk.co/articles/virtualsourcing-trips/gobi-revolutionary-cashmere-from-mongolia Sissons, J. (2010) Basic Fashion Design, Knitwear. Ava Publishing Tee Talkies (2018) How to source for quality knitwear apparel manufacturer? 13th March [Online] [Accessed on 28th May, 2018] https://teetalkies.com/howto-source-for-quality- knitwear-apparel-manufacturer/ Textile Excellence (2017) Turkey has its advantages as a sourcing hub in Europe. 1st May, 2017. [Online] [http://www.textileexcellence.com/news/details/1869/turkey-has-itsadvantages-as-a-sourcing-hub-for-europe Trent, R. and Monczka, R. (2005) Achieving excellence in global sourcing. MIT Sloan School of Management. [Online] [Accessed on 2nd November 2018] http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.465.7508&rep=rep1& type=pdf Walters, M. (2015) How your cashmere is made? Bloomberg.17th September 2015 [Online] [Accessed on April 9th 2018] https://www.bloomberg.com/news/articles/2015-09- 17/how-your-cashmere-ismade Xinhua News Asia & Pacific edition (2018) Mongolia moves to boost cashmere industry. 8th February. [Online] [Accessed on 25th May, 2018] http://www.xinhuanet.com/english/2018-02/08/c_136959900.html Yarns and Fibers News Bureau (2017) Morocco jostling to become sourcing hub for European fast fashion industry. 8th November [Online] [Accessed on 28th May, 2018] http://www.yarnsandfibers.com/news/textile-news/moroccojostling-become- sourcing-hub-european-fast-fashion-industry#.Ww6mAi-B2CQ Yapar, Z. (2017) Cashmere, from mountains to luxury fashion Skylife Business. March 2017 [Online] [Accessed on 28th March, 2018] https://www.skylife.com/en/2018-02- business/cashmere-from-mountains-toluxury-fashion

BIBLIOGRAPHY Brun, A. and Castelli, C. (2008) Supply chain strategy in the fashion industry: Developing a portfolio model depending on product, retail channel and brand. Elsevier BV. Bryant, F.C., Florez, A. and Pfister., J. (1989) Sheep and alpaca productivity on high andean rangelands in Peru. Journal Animal Science Ghauri, P, and Gronhaug, K. (2010) Research Methods on business studies. Fourth Edition. Prentice Hall. Haul, L and Chung-Yee L. (2007) Building supply chain excellence in emerging economies. Springer Science and Business Media. Jankowicz, A.D., (2005) Business Research Projects. Fourth Edition. Cengage Learning EMEA McCraken, G. (1998) The long review. London: SAGE.â&#x20AC;¨ McGregor, B., and Butler., K. (2004) Sources of variation in fibre diameter attributes of Australian alpacas and implications for fleece evaluation and animal selection. Australian Journal of Agricultural Reserch McGregor, B. (2006) Production attributes and relative value of alpaca fleeces in southern Australia and implications for industry development. Small Ruminant Research. Rickman, T. and Cosenza, R. (2007) The changing digital dynamics of multichannel marketing. Emerald Group Publishing Ltd. Seminario, A. (2014) AYNI. The Androgyny. 28th April 2014. [Online] [Accessed on 30th October 2018] http://theandrogyny.com/ayni/ Seminario, A. (2016) AYNI: Invierno en alpaca. The Androgyny. 28th June 2016. [Online] [Accessed on 30th October 2018] http://theandrogyny.com/ayniinvierno-en-alpaca/ Wang, H., Liu, X., and Wang, X. (2005) Internal structure and pigments granules in colored alpaca fibres. Zaccagnini, J, and Foster, I. (2009) Research Methods for the fashion industry. Fairchild Books.

ICONOGRAPHY Figure 1: Ballón, V. and Laureano, M., (2017) Chart on worldwide population of alpacas. Ponticia Universidad Católica del Perú. [Online image] [Accessed on 2nd November, 2018] http://tesis.pucp.edu.pe/repositorio/bitstream/handle/123456789/9463/BALLON _LAUREANO_ESTUDIO%20DE%20PREFACTIBILIDAD_TESIS.pdf?sequence =1 Figure 2: Ballón, V. and Laureano, M., (2017) Population of Peruvian alpaca dated to 2017. Ponticia Universidad Católica del Perú. [Online image] [Accessed on 2nd November, 2018] http://tesis.pucp.edu.pe/repositorio/bitstream/handle/123456789/9463/BALLON _LAUREANO_ESTUDIO%20DE%20PREFACTIBILIDAD_TESIS.pdf?sequence =1 Figure 3: Jacobsen, M, (2009) Supplier management framework. The Art of Retail buying. John Wiley & Sons. Pte. Ltd. Figure 4: MyTheresa.com (2018) Top 9 most expensive alpaca garments and the brands that feature them [Online image] [Accessed on 3rd November, 2018] https://www.mytheresa.com/euro_en/catalogsearch/result/index/?dir=asc&mytrs =1&order=price&q=alpaca Figure 5: MyTheresa.com (2018) Top 9 less expensive alpaca garments and the brands that feature them [Online image] [Accessed on 3rd November, 2018] https://www.mytheresa.com/euro_en/catalogsearch/result/index/?dir=asc&mytrs =1&order=price&q=alpaca Figure 6: ACIL Consulting (2001) Estimate of world alpaca herds and annual fibre production. [Online image] [Accessed on 3rd November, 2018] https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=12&ved= 2ahUKEwi85r2EzMzeAhVFKBoKHWbMCbQQFjALegQIBRAC&url=https%3A% 2F%2Fwww.aph.gov.au%2FDocumentStore.ashx%3Fid%3D185d1e11-5bb64385-ac76-594cd33298b6&usg=AOvVaw2jou_6np_HrFE3grcKwCGQ Figure 7: Seminario, A. (2018) Prèmiere Vision September 2018 entrance at Paris Nord Villepinte. Figure 8: Seminario, A. (2018) Tsonkiri stand at Hall 2 of Prèmiere Vision.

Figure 9: Seminario, A. (2018) Tsonkiri garment offer for international buyers at the Sourcing Hall of Prèmiere vision. Figure 10: Seminario, A. (2018) Advertising “Turkey, discover the potential”, on Hall 6 entrance, sponsored by Aegean Apparel Exporters Association. Figure 11: Seminario, A. (2018) Advertising “Turkey, discover the potential” outside the Gare du Parc des Expositions. Sponsored by the Istanbul textile and raw materials exporters association. 21st September, 2018 Figure 12: Seminario, A. (2018) Incalpaca stand at Prèmiere Vision 2018. Figure 13: Seminario, A. (2018) Incalpaca textile offer at Prèmiere Vision 2018.

APPENDICES Appendix 1: Information sheet format INFORMATION SHEET You have been approached to participate in an academic dissertation for an MA Luxury Brand Management program from Istituto Marangoni Paris fashion school and the Metropolitan Manchester University. We ask you to read the following information carefully and do not hesitate to ask any questions if you have doubts on the objectives, procedures or final outcomes of this research. The current dissertation project is being worked by MA student Adriana Seminario, Peruvian journalist, published author and digital influencer from Lima, Peru. Currently based in Paris, she is looking forward into understanding the international potential of her country through the fashion industry. The topic of the dissertation is: Peru as the next sourcing-hub of high quality alpaca knitwear to supply the European market The secondary research for it includes a series of interviews with key professionals of the industry regarding the topic, buyers from luxury and premium European fashion brands, official members of the Peruvian government in charge of the exportation and international projection of Peruvian products, focus group with regular European consumers of high-qualitative knitwear and a visit to PremiĂ¨re Vision, the renowned international event for fabrics and materials around the world. As for primary research, we will incur into a comparative case study with the cashmere from Mongolia, the main reasons that make a country a sourcing-hub for high qualitative alpaca knitwear, the current state of the alpaca business in Peru and the sustainability side of the yarn as a plus to the fashion industry.

The main purpose of this dissertation project is educational. Nonetheless, we will propose a concrete action plan as part of the Discussion section of the project. A long-term objective of this dissertation is to be implemented or consulted as an academically point of reference for luxury brands that would consider using alpaca as part of their collections, and as an overview for Peruvian companies and the commercial offices of the Peru state. We consider your participation would highly contribute to the quality of information and precision of this dissertation. Therefore, we would look forward to concrete a information recompilation in one of the formats specific on the lines above.

After you finish reading this information sheet on the study, we will ask you to sign a consent form to show you agreed to take part. You are free to withdraw at any time. (if applicable â&#x20AC;&#x201C; this will not affect the standard of care you receive).

Contact information: Adriana Seminario adrianaseminario90@gmail.com +(33) 06 33 72 30 64 Istituto Marangoni Paris MA Luxury Brand Management Program

Appendix 2: Semi-structured interview with Irune Barrenechea, Fabric and material assistant at Louis Vuitton Homme Date: 10th September, 2018 Interviewer: Irune, which are the main reasons you think, working as fabrics assistant at a luxury brand like Louis Vuitton, that fashion buyers don’t choose alpaca for their collections? When confronted with the question of why Alpaca, what usually happens is that the fabric is way too expensive and this reflects on the costs, but final customers don’t know it. Therefore, they don’t want to pay for it. People that work with fabrics know about it, for sure, but they don’t buy it because often people are not willing to pay the price. The designer or textile specialist have very much difficulty to send that to sell it to their public. For the fabric buyers of luxury houses, this yarn is difficult to get, is certainly delicate regarding the treatments you can do to it and is expensive. That’s why is not often used. Finally, in the luxury/premium market there is an opportunity for alpaca to get popular, but not in the fast fashion, to say, the mass market. Interviewer: Do you use Peruvian alpaca in the fabric department of Louis Vuitton Homme? Working in the Louis Vuitton fabric department, I can tell you they use some alpaca on the Fall Winter 2019 collection. But we don’t buy it from Peruvian suppliers but from Italian ones, in our case Fratelli Piacenza. And, in any case, alpaca fabric is not sold as it was a Peruvian yarn but an Italian yarn. There relies the detachment from Peru, and at the end, the final customer doesn’t really care because he is unaware. Interviewer: Why does this happen? Does it depend on Italian suppliers or in Peruvian suppliers to state the origin of the yarn? That’s actually a problem of regulation. In Europe, this regulation on the origin of products is not strict at all. A product could be 20% made in China, 20% made in Bangladesh, 40% in India and 20% in France and they can say the product has been made in France. Because the idea that France is guarantee of good quality is acknowledged across the world. From a marketing point of view, Peru founds itself left behind because it’s not in the top of mind of fashion buyers as a country for luxury fabrics. It makes more sense for them to talk about Italian luxury fabrics. Interviewer: In what point of the supply chain do you think the problem relies? For me, the problem relies in the process between the yarn and the fabric. The yarn comes from place A, but the fabric is made in place B, and is in that inbetween that Peru looses the opportunity to brand alpaca as their national luxury fabric. In order to make an association product-country, as with what happens with cashmere from Mongolia, leather from Morocco and fur from China, there has to be a branding work. And this usually comes form the association of exporters or from the commercial offices of the countries who have the yarns in abundance and that have been historically related to them. Today, Peru doesn’t have that level of branding with alpaca. 82

Interviewer: What are the usual inquiries that a buyer from a brand like Louis Vuitton Homme has when faced to the possibility of buying a mew fibre? In order for a luxury brand to choose alpaca for a collection, there are some basic questions the buyers will take into account, such as what is the quantity of alpaca Peru exports annually? What is the quantity they export to European countries? Do Peruvian suppliers have enough capacity to deliver big orders in a determined amount of time? How do they promote their sustainability of their fibre? Interviewer: That’s quite a lot of questions. So specifically for Louis Vuitton Homme, what is the most important feature to be taken into account? Alpaca doesn’t produce massive amounts of yarn per year. If a brand like Louis Vuitton, for instance, decides to buy alpaca for a collection, they will need to buy at least 100 meters, when each meter has an average cost of 100 euros. Also, you don’t know how much alpaca is used on the fabric. Is it a mix of 20% alpaca and 80% of something else? There is no strict regulation for that. If a supplier tells you that a textile is 70% made of alpaca and it turns out its more like 20%, they will never buy from them again, and probably, from any other Peruvian alpaca supplier. These are expensive fabrics, and you do not want to take your chances at this level of luxury products. Interviewer: Does Louis Vuitton Homme currently use cashmere for its high-quality knitwear? Do they source it from any country in particular? Yes, we use cashmere we source from India and Pakistan. However, even if cashmere is well-known fibre, we do not necessarily use it more at LV Homme, Virgil Abloh, the current creative designer of the brand is known to be someone with a taste for street wear. And, honestly, even if we can use cashmere in some of the pieces of the collections, it is not a fabric that is priority to us right now. We use more sportswear textiles.

Appendix 3: Semi structured interview with Sofia Carreras Polack, Commercial Advisor at OCEX Paris, the Commercial Office of Peru in France Date: 16thOctober, 2018 The transcription of this interview is not available for further reading and/or research. The interviewee has not granted permission to this dissertation project to make it public in case of publication.

Appendix 4: WhyAlpaca, internal report developed by Incalpaca y CIA

Appendix 4

QUESTIONS For focus-group and in-depth interviews The main objective is to gather information on the perception of high-qualitative alpaca knitwear on two different groups: European customers of luxury fashion brands and European customers of brands, not necessarily fashion nor luxury, but more mass market. o What is your favourite material regarding high-quality luxury knitwear? o What are the luxury brand that pop into your mind when talking about high-quality luxury knitwear? o Do you have an idea that high-quality cashmere knitwear comes from a specific country? o Do you associate high-quality cashmere knitwear with Mongolia in any way? o Do you know alpaca knitwear? What do you know about it? o Do you have, or have you ever heard, of bad reviews regarding alpaca knitwear? Which ones? o Do you have a personal conception that this fabric itches, scratches or is just doesnâ&#x20AC;&#x2122;t feel luxurious enough? o (Present 3 alpaca garments. One light sweater, one chunky knitwear XL sweater and a knitted-scarf) What do you think of this alpaca pieces? Would you use them? o Does the fact that a knitwear piece has a sustainable plus wants you want to buy it more?

Appendix 5: Interview with three fashion luxury customers and industry insiders Date: 7th October, 2018 Participants: • Irune Barrenechea. Assistant at the fabric department of Louis Vuitton Homme. Nationality: Spanish. • Patricia Kanclerz. Regular fashion luxury consumer. Nationality: Polish. • Laureen Gazio. Sales assistant at Le Bon Marché Rive Gauche. Nationality: French. Adriana Seminario (Interviewer): So, I am going to read to you this small paragraph that actually summarizes the objective of the dissertation. The main objective of this interviews is to gather information on the perception of high-qualitative alpaca knitwear on European and European-based customers of luxury brands. The convocation has been made on European and European-based women between 23 and 32 years-old who are regular customers of luxury brands and who have basic notions of the international fashion industry. (previously, the three interviewees were asked to write on a small piece of paper the first three words that appeared on their minds when referring to high-quality knitwear) Irune Barrenechea: The first one is cashmere. The second one is vicuña and the third one is Loro Piana. Adriana Seminario: Ok, two fabrics and one brand. What about you Pats? Patricia Kanclerz: I wrote softness, price and good mood. Because basically it’s such a good feeling to touch a good fabric and have it in your hands. Price, because it matters to everybody. And well, it puts you in good mood to wear something you enjoy right? Adriana Seminario: Alright, and Laureen what about you? Laureen Gazzio: Soft, quality and 100%, like not mixed with another fabric. AS: Ok. Are you talking about the yarn, right? Hundred per cent something? LG: Yes, exactly. AS: That’s interesting. So, my first question is: what is your favorite material regarding high-quality luxury knitwear? When you look for a knitwear piece in a luxury or premium brand, what’s the material you usually go for? Or you buy without even noticing maybe? PK: Well, I try to go for cashmere if possible, but it’s not always possible. And as I told you, I bought several knit pieces of cashmere recently and I was hand washing them cold, and they were shrinking and shrinking and finally I end up giving them away to family members. Kids, basically. So, cashmere, but this was what will make me think twice from now on. Ever since I bought very simple wool, not even paying much attention on what was the fabric. AS: But when you pay, it used to be cashmere. PK: It is cashmere, usually. AS: What about you Irune? IB: Sorry, I know you are going to hate me, but I’m a fan of synthetic textiles. For illogical reasons. AS: No, but actually there is a question that will touch that point. So if you can avoid it, you prefer not to go for knitwear? 93

IB: Not really. It’s that I find myself buying either recycled materials, that kind of things. Because, of course is nice to the touch, probably one of my favorite fibers if I have to choose it will be vicuña. It’s super nice to the touch. But, at the same time, there are many things that concern me regarding the farming or the treatment of the fiber itself. So I end up buying mainly synthetic fibers. AS: Ok, I understand. And what about you Laureen? Do you look for a specific fabric when you buy knitwear? LG: Not really because I don’t have the budget so I never bought cashmere. But now that I’m working for Proenza Schouler in Le Bon Marché I can really look at the product and how it’s made and most of the times I find that cotton is very nice but I actually don’t pay much attention. It’s more about the feeling. Because sometimes wool can be very soft and sometimes not, so it’s important when I try it. How does it feel? Does it scratch me or not? PK: A fabric scratching the skin is such a bad feeling… AS: Ok. And what are the luxury brand or premium brand that pop into your mind when talking about high-quality knitwear? Well, actually there was a brand in one of your answers Irune, Loro Piana. Everyone: Yes, Loro Piana. AS: But does a French brand or a non-Italian brand comes to your mind? PK: Isabel Marant? I mean, she is making really nice jumpers usually. Then, Brunello Cuccinelli. I mean, when I think of buying those is so expensive usually. Is either when you found it in discount. IB: Also the design is a bit… unexciting. When you think about Brunello Cuccinelli. Ok, it’s super high quality but it’s all the time the same design. AS: In terms of design? PK: In terms of design is just too traditional in a way. IB: It’s boring. AS: So if you would see a design that is more interesting, would you buy it? IB: Definitely. Specially in knitwear I think is very difficult to find innovation. Not regarding the material, but regarding the design. AS: You have something to add Laureen? LG: I was looking at an Instagram account, Paloma Wool, a Spanish brand. They also do accessories but they started with knitwear and it’s nice. So I think I’ll rather buy small brands that are trying to do something different. Rather than high-end luxury brands that are well-known but it’s nothing new, very classic design. AS: A bit boring, I understand. PK: Do you know Iris and Ink? I love their jumpers, so nice. It’s such a nice feeling, you touch them and it feels so soft to the touch. You are very keen to buy it. AS: That’s very nice. And, is it more of a luxury brand or more in the range of premium? PK: Is somewhere in the middle. It’s easy to find them on sales or buy them on The Outnet. IB: Also I think by now there are other brands that are not luxury at all and that are actually could be considered fast-fashion that have high-quality knitwear at super good prices. So, if you look what Uniqlo is doing, for example. They have quite good quality, quite good fit and design, and they are not expensive. So I don’t think it’s very much justified in terms of design and in terms of excitement of purchase to go for a luxury brand and that you are buying something very specific. You are buying a cashmere jumper or you want something that is very basic or classic. 94

AS: Exactly, let’s say a Loro Piana coat for forty thousand euros. PK: Or you are in the case where you don’t have to mind the price at all. IB: Yes, but I don’t feel it’s really really justified. LG: That’s true. AS: Ok, that was an interesting point. Now, going forward with the questions. Do you think that high-quality cashmere comes from a specific region or country? Because I’ve got the feedback from many French people that the idea of high-quality cashmere is strongly related to Mongolia. Or sometimes India. Because countries like China has it, but it’s not perceived as exclusive. And, because the Gobi goat is originally from Mongolia, do you have this link on mind or you just don’t think about it at all? IB: Yes, definitely. Cashmere comes from those places but it’s very difficult to source it. It’s difficult to be sure because even if in your mind you have the idea that it comes from Mongolia, who really knows? PK: It’s true. For me it would be Australia because you always think of sheep’s and all these herds. And they have some kind of championships on trimming the sheep’s and else (laughs). That was my first thought. AS: Ok, so Australia pops into your mind when thinking about cashmere. LG: We learned at IFM that it came from countries that right now I don’t remember (laughs) IB: It happens a lot. LG: Well, I know it’s not only from Mongolia, it’s also sourced from another country. AS: So, time for the obvious question. Do you know alpaca knitwear? And if you do, what do you know about it? IB: Well, yes, for obvious reasons (laughs) PK: Well, I like alpacas as animals (laughs) They are fluffy and they don’t spit like llama. AS: But what about alpaca knitwear? More about the animal than the fabric. PK: Never heard of anything made of alpaca knitwear, you know? So I would just have to touch it, wear it, get to know it. LG: For me, I worked with a girl from Ecuador who was building a brand around high quality alpaca. So I was very surprised because she told me, most of the time is not used by luxury brands. And what she wanted was to create was a brand with interesting designs, using the fiber. So, I don’t know. The touch is really nice and I was surprised with all the designs she has because it was something really different. Coats, sweaters, very different things. And I was surprised with all the things you can create from it. AS: Did they looked modern to you? Do you have in mind the idea that some of the designs regarding alpaca are too ethnic and that is something that may be a constraint for alpaca when entering new markets? LG: For her, traditional designs with alpaca were very ethnic, yes. Because she is from Ecuador she wanted to use a fabric from her country but not to sell it exclusively to tourists who go to Ecuador but build a brand around a national product but that can be sold to everyone without looking too folkloric. But I don’t know much about it. But from what she told me most of the time the designs were too folkloric and you wear it when you are at holidays and you use it to be at home. PK: Do they do blankets of alpaca? Like wool blankets? AS: Of course, you can scarves, blankets, gloves, socks, ponchos, you name it. If it can be knitted it can be done in alpaca. But yes, the classic idea of an alpaca garment is super colorful and with an ethnic design. I do think is 95

beautiful but… LG: If it could be a design like all-white with a few details it would be very nice but you are not going to wear it in the streets. It would be something to wear more at home. I couldn’t see myself wearing it in Paris for example. IB: Well, my mom is Peruvian, of course I know alpaca (laughs). And my family has traded with alpaca for quite a long time. However, it’s interesting that you would not wear it knitted because it’s very folkloric. And it’s funny because when I think of alpaca I think about alpaca coats and many brands have them that maybe to the eye it’s not obvious they are from alpaca but when you feel it you know it. LG: Exactly, that’s what my Ecuadorian friend told me, because I had no idea about it. The design she proposes is more modern. PK: But can you tell that a garment is made from alpaca from just touching it? IB: You can tell its alpaca; you can feel it. AS: Yes, you will feel it. Just in case someone doesn’t have it in mind, something too ethnic or too folkloric would look like this (shows picture of typical Peruvian women of the Andes highlands wearing a vernacular alpaca poncho). Of course it’s beautiful because it carries centuries of tradition, and besides it comes with a debate about cultural appropriation… PK: But it’s just not everyday wear. AS: For them it is, but not for us. Just to clarify in case any of you didn’t had it in mind. For the next question. Have you heard reviews regarding alpaca knitwear? Which ones? PK: Not at all. Not on my side. Barrenechea and Gazio nod their heads as a negative gesture. AS: Next question. Have you ever had the idea that this fabric itches, scratches or it’s just doesn’t feel luxurious enough? PK: But first we need to touch it. AS: Just to know if someone had this idea. So going directly to the next question, these are three alpaca garments. This chunky knitted maxi size burgundy sweater and this lighter sand tone sweater are from a Peruvian brand called Ayni, which is a quechua word, one of the official languages in Peru, and means “today for you, tomorrow for me”. The brand was created by a Peruvian girl and a Danish girl, and it’s very high-quality and a minimal and Nordic design. The detail in the neck, the sleeves. And the colours are homogeneous, the quality is even. They brand is showcasing this month at Bergdorf Goodman in New York. This other one is a baby alpaca knitted scarf, I got it in designer store in Cusco. It was retailing for 90 euros approximately. Usually it’s not the price a regular Peruvian customer would pay for a winter scarf, that’s why I position it as premium/luxury product. So, after touching, feeling them… IB: Are they 100% alpaca? AS: No, actually they are mixed. One with silk, the another one with cotton. The red scarf, I don’t know the designer but I’m pretty sure it’s mixed because it’s baby alpaca. When it’s just 100% alpaca is a bit rough to the touch. PK: Oh, the baby alpaca scarf was the least itching for me, in the neck. Because I’m super sensitive on that area. The other two I would feel annoyed wearing them. Or would wear something underneath, like a turtle neck top. AS: Ok. PK: But to the hand it’s a good touch. Otherwise, that’s why I always test on the neck any knitwear before buying. 96

AS: What do you think of the pieces? Would you use any of them? PK: Well, design-wise, I would wear the jumpers, but not after finding out that they would itch my neck. But design wise, I like it. I like classics, they go well with everything, just have to combine it in different ways with a few interesting pieces. IB: I was very surprised, the second jumper was super heavy. That’s why I was asking, what is this? It’s actually very heavy compared to the other one. AS: Yes, the knit is actually quite chunky. It’s also because of the design. PK: That was my thought. If you are packing only for a weekend, it’s making your luggage too heavy. AS: Yes, so it would have to be very cold for you to take it. But I can confirm it works pretty well in hard winter times. IB: One of the most interesting things of a fiber to me is when you knit it, the ability to give you more heat with less weight. That is the most interesting thing. That’s why I think cashmere is such a thing, because you can have a very light jumper that warms you up really well. So, that for me that is a very nice piece —the burgundy jumper— but I would be annoyed because it feels so heavy… AS: And what about the clear one? IB: The clear one is very nice to the touch and I like that it feels lighter AS: Ok, so weight in knitwear is a factor. IB: Yes, definitely. AS: Some thoughts Laureen? LG: I would wear the clear jumper, the scarf no because of design. The burgundy one is really pretty. Not my style but I’ll like to see it in someone else. For the scratchy part, I’m not very sensitive so I can wear pretty much anything. The weight doesn’t bother me; I didn’t notice that detail. PK: Well, we all have something, right? Thickness, or softness or whatever. AS: And one last question. Does the fact that a knitwear piece has a sustainable plus wants you to buy it or invites you to buy more? Does it affect your decision? On this question, I explain the fact of environmental sustainability because the Gobi goat plucks the grass from the roots and it devastate the areas. The alpaca, on the other side, cut the grass with their teeth. Besides that, they give work for Andean families and entire communities, preserving an ancestral technique of weaving that goes through generations. All these facts influence in any way your purchase decision? IB: I would care that is sustainable but not because of the feeding of the animal. I would care more about the way they are sheered or make a choice on the way they are farmed. AS: Ok, if everything is done in a correct practice, the farming, the sheering, not hurting nor killing the animal. IB: Exactly. PK: Well, there are people that just don’t care that the luxury product they are buying is sustainable or not. LG: Yes, but let’s say the mid-point is a customer that cares about the sourcing of the fabric in the garment and also is willing to spend more. And of course, have transparent information given by the brand. I think people are concern but it takes so much time to get information. You need to go to internet, search and that takes a lot of time. For me personally I’m very concerned but I don’t think about this 100% of the time. IB: Yes, you cannot get one ticket to go to Peru to confirm that the alpacas 97

are being treated nicely. You pretty much have to trust the brands and many brands could do green-washing regards this. PK: Definitely. But I do think itâ&#x20AC;&#x2122;s a plus when you look at the information displayed here on alpaca. AS: Perfect. Thank you very much ladies for your answers.

Appendix 6: Focus group with French customers of premium and fast fashion brands Date: 8th October, 2018 Participants: Anna Rollet, Eva DaCosta, Audrey Rissier, Jean-Noel Chaintreuil, Janeth Chavez, Yann Grégoire. Interviewer: What is the main feature you look at when you go shopping? Is it color, is it price, is it brand? Jean Noel: It’s quality! Audrey: I would say original design and that is black. Anna: Design and fabrication Yann: Prize and quality. Janeth: Quality Eva: Price Interviewer: What is your favorite material when you want to buy a high-quality knitwear? Like a proper winter sweater or coat? All together: Cashmere. Audrey: Also, hemp. Janeth: Also cotton or similar. (Jean Noel and Audrey discussing in French) Jean Noel: We are having a discussion on hemp versus cashmere, because cashmere is very soft, and hemp is a vegetal fiber that can be very harsh. So, I don’t know if we can have luxury knitwear with hemp. Is there a luxury or premium brand that pops into your mind when you talk about luxury knitwear? Anna: Yes; Eric Bompard. The rest: Eric Bompard. Janeth: No idea. Anna: There is one girl I know that is doing premium cashmere, I think its cashmere studio, and is based on Amsterdam. Interviewer: She is French? Anna: Yes, she is French but living in Amsterdam. Audrey: I know this brand from Chicago or New York, who makes luxury clothes for winter including pullovers and coats, and it is all vegan. They are called VOAT. Anna: The brand of the girls is called Extreme Cashmere. Eva: Yes, when talking about high-end knitwear, I would say American Vintage, but it is not luxury of course. Anna: Or Uniqlo, they are doing super nice cashmere Eva: But it is not luxury Jean: But the cashmere is wonderful! I bought cashmere in Uniqlo five years ago, a sweater from their very first collection, and it lasts until now! Anna: I have five and they are all perfect until now; Interviewer: Do you have an idea that high-quality cashmere comes from a specific country or region? Eva: Well, Mongolia 99

Everyone: Yes, it is true. Mostly Mongolia. Jean: Argentina! Everyone: Mainly Mongolia, sometimes India. Jean: Yes, but in Argentina they have too, right? Interviewer: I do not have the information to confirm that, but I haven’t heard much about it. It is interesting though. Jean: Ok, then for cashmere for me is India. Interviewer: Ok, so you would say India is also in the picture. Interviewer: Do you know alpaca knitwear, and if you do, what do you think about it? Anna: Yes, and my first thought is that it is super expensive. Janeth: I don’t know about it. Audrey: I know that is soft and warm, but it is not vegan. Eva: I know about it, but I have never owned one. Yann: Expensive is the first idea that comes to my mind. Interviewer: Have you ever heard reviews regarding alpaca knitwear? If so, which ones? Anna and Audrey: No, don’t think so. Jean: For me the alpaca is more related to the lining of a coat or a garment like this, more than the garment itself. I bought one in China; in Beijing; before trekking in the Great Wall. Me and my friends agreed to buy alpaca sweaters to wear under our jackets because it was under 20 degrees. Interviewer: And did it work? Jean: Absolutely. Interviewer: Do you have a personal conception that this particular fabric is itchy, or it scratches, or it just doesn’t feel soft enough? Anna: Well, I tried it once and it was super comfortable. Like cashmere. Jean: A bit itchy, yes. Eva: For me that doesn’t make it not luxurious, the fact that it could itch a little bit. Jean: For instance, in my mind, cashmere is softer than alpaca. Interviewer: That’s an interesting perception. Anna: Animana, it is the name of a big store in Saint Germain des Pres where I tried the alpaca I was talking about before. Right next to Le Bon Marché. Interviewer: And do you remember the price range, in average? Anna: Yes, I tried it and it was like 400 euros or a bit more. And I was like… ok… *Interviewer presents to the focus group a chunky, oversized alpaca sweater in burgundy from the Peruvian-Danish brand AYNI.* Interviewer: This is an alpaca chunky sweater, which is a bit heavy; specially for winter. It’s from a Peruvian brand AYNI, who are showcasing right now in Bergdorf Goodman, in New York. And I would like you to feel it, to touch it, tell me what you think about it and tell me if you would wear something like this. Or not. Jean: My question is what the exact is the percentage of alpaca in this specific sweater. 100

Interviewer: It is 70% alpaca and 30% silk if I am not mistaken. Jean: Ok, that’s why I wanted to know. Because if it is 50% of silk and 50% of alpaca, then it is bias. Interviewer: Yes, I understand the implications of the percentage of alpaca in a consumer’s decision, of course. Interviewer: As you get to feel this alpaca sweater and give me your impressions, I would like you to know that this is the brand of a Peruvian girl and a Danish girl, both based in Lima but constant travelers, specially coming to Paris, New York, Copenhagen and cities around the world where they see suitable to promote this kind of brand. Eva: It feels very soft, but it’s not as soft as cashmere. Anna: It feels warmer than cashmere to me. Eva: I don’t know… it feels thicker. Janeth: It’s thicker, yes, but sometimes in wintertime I feel that’s more important than just feeling something soft. For me being warm is really important, so I would prefer something like that rather than just a piece of clothing that looks good. Anna: Yes, anyway you could wear Uniqlo HeatTech underneath it and it would be fine. Jean: Just; the weight… is a bit heavy. I don’t know what would happen if some water gets to the sweater. Would it shrink? Would it be ruined? Interviewer: No, nothing happens. You can even hand-wash it in cold water, but absolutely no washing machine and no machine dryer for this fabric. Anna: Yes, I imagine that to hand wash something like that it must take some time… Interviewer: So, do you think it you were presented the opportunity to buy a piece of alpaca knitwear, would you do it now that you have this information on the fabric? Anna: I would. Jean: Yes, I would. Audrey: If it was vegan, I would too. Eva: Yes, in a cold winter. Janeth: Yes. Yann. Probably, yes. Interviewer: And, does the fact that a knitwear piece is sustainable, do you consider it a plus when it comes to your purchase decision? Audrey: Yes, definitely. Anna: Yes. Jean: Me too. Eva. Not necessarily. Janeth: Yes, why not? Yann: Not really consider it. Interviewer: Let me rephrase that for you. Does the fact that garment costs some more because it is certified that is sustainable, would you agree to pay a bit more for it? Knowing that, with your purchase, you are supporting a supply chain that benefits communities and families in Peru? Anna: Depends on how much is ‘a bit more’. 101

Janeth: Yes, it depends. But if it is for good quality then I would go for it. Jean: And if it’s good for the environment. Because look at this: if you have two sweaters, there are the same quality. One is 100 euros and the other one is 120 euros… Anna: No, no, in this case is more like 100 euros and 150 euros, at least. Jean: And the 150 is good, is made in Peru, is good for the environment; is made with ethical labor, etc. Yes, I am referring to brands that produce ethically, that don’t exploit communities and the work of farmers on the high lands, that don’t harm the animals, and also companies that respect all the environmental requirements. Janeth: If you have the chance to pay it, I would pay it. But I wouldn’t buy alpaca every time I buy a knitwear garment. Jean: I would pay 20% more, without a doubt. Janeth: If I would have the money for that, if course I would do it. Interviewer: Ok. Well, after this question I would like to share with you the following information on sustainability. In the case of cashmere, the Gobi goat pastures in a way that it harms the lands in which they feed. They pull the grass in a way that they depredate the soil. In contrast, the alpaca pastures on a way that they cut the grass with their teeth, hence, the lands remain fertile. Jean: But you have to take a look at Patagonia and Cotopaxi. Anna: It’s even better! Interviewer: They are in Argentina, right? Jean: Yes, Argentina or Chile, I don’t remember exactly right now. They have a sustainable plan for the project, for the people inside, so it’s great. For me it’s very important and I would be ready to pay for a Patagonia bag, maybe 20% more, because I know they do things right. Eva: But I think it’s also a lot about branding… they can brand it like “we help thousands of children when you purchase our products” but you don’t have any way to confirm that is true. Jean: Yes, there is the branding but behind the brand everything is true. Anna: Patagonia is super famous and that’s why it’s a strong brand in the hype style. But I bet 70% of people buying Patagonia, they have no clue it’s a sustainable brand. They like it because it’s hype, there is the logo and else, but they don’t the story. Jean: Really? You think so? Eva: I do think that. Anna: And how much is it? This burgundy chunky sweater? Interviewer: It is retailing for 350 dollars, which would be roughly 300 euros. And as I explained is mostly alpaca, blended with silk. Anna: Well, when you think about it you have cashmere of all types, from luxury cashmere to Monoprix cashmere, which I am sure it hasn’t 80% of pure cashmere (General laughs) Jean: But that alpaca sweater it’s expensive for a sweater Interviewer: Yes, but it has last for many years, and I expect to last some more. Jean: Fair enough, then it looks good.

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Appendix 7: ADEX official charts on textile, fabrics and textiles and fabrics exportations of Peruvian alpaca. Finished garments charts

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Textiles charts:

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Textiles and finished garments combined charts:

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ETHICS CHECK FORM FOR POSTGRADUATE PROJECTS INVOLVING HUMAN PARTICIPANTS This form should be completed for all relevant projects. It is used to identify whether there are any issues requiring further ethics approval. This form must be completed the primary research starts. To complete this form, please refer to the University’s Academic Ethical Framework (www.rdu.mmu.ac.uk/ethics/mmuframework) and the University’s Guidelines on Good Research Practice (www.rdu.mmu.ac.uk/rdegrees/goodpractice.doc) . Project and Applicant Details Project Title:

Peru as the next sourcing-hub of high quality alpaca knitwear to supply the 106

European market Name of Researcher:

Adriana Seminario

Status:

Student postgraduate

Email address:

a-----@gmail.com

Contact address:

Paris

Telephone Number:

+33 06 -- -- -- --

Programme of Study

MA Fashion and Luxury Brand Management

Supervisor’s Name: Contact address/telephone

Patrick Vacher

Supervisor email address:

p-----@gmail.com

Methodologies and Sources: Provide an overview of the main sources and what methodologies you are using to obtain information. (Be explicit regarding the number of people involved, how they will be selected, addressing consent and confidentiality issues.) • The research design for this dissertation is exploratory, meaning it will facilitate the revelation of new data and insights. This approach is not intended to provide conclusive evidence, but helps to have a better understanding of the topic. On this case, the strategy to turn Peru into a sourcing-hub for highqualitative knitwear. • This research will adopt an inductive approach. The purpose is to understand the nature of the problem in order to give a sense to the data collected in primary and secondary research. It starts from an observation to form a theory giving the fact there is information a priori. The methodology won’t be as rigid as with the deductive approach given the fact that collection of qualitative data and new information will probably show up during the investigation process and bring new angles yet to be discovered. 107

• The semi structured interviews for this dissertation shall be addressed in advance and given an information sheet with the specifications and clear objectives. A consent form will be also extended to the interviewees in order to certify the information given can be used for the purpose of this academic project. • Regarding the quantitative research, official exportation charts provided by ADEX, the official organization of Peruvian exporters, will be presented as secondary data. The charts are internal information that was provided after several exchanges with official representatives of the organization. An information sheet as shown in the appendix was extended in order to clarify the objectives of this study. • As for the focus group involving European customers of highqualitative knitwear, an information sheet will be also provided in advance in order to clarify the purpose of it. Likewise, a consent form will be extended in order to assure that the results given by the participants can be analysed and referred to as reliable data for this academic project. • Regarding the secondary research, books, government reports, brand reports and international statistics and data from qualified companies will be consulted and referenced with the MMU Harvard Referencing system to avoid any plagiarism.

Student Undertaking: I confirm my intention to carry out this research project in the manner described. I undertake to bring any proposed changes (including any changes to the participant group) in the research plan to my supervisor before these changes are implemented. I understand that failure to do his may affect the assessment of my project work. Signed:

xxx

Date: 03/12/2018

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Supervisor Agreement: I have reviewed the ethical issues with the student and confirm that the proposed research complies with the MMU Ethical Framework.

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Date: 03/12/2018

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Peru as the next sourcing-hub of high quality alpaca knitwear to simply the European market

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Peru as the next sourcing-hub of high quality alpaca knitwear to supply the European market