Research Proposal: Will Zara's Sales increase at TMAll

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Executive Summary
As the online shopping gives more convenient shopping experience to online shoppers, there is no argument that it is slowly replacing the physical stores. But with the easiness of access to products and the ability to compare goods or services online without going to the physical shopping stores of these companies, companies face tight competition and need to handle the online shopping with care such as choosing the right platform, determining the shopping behavior of a group of people which can be divided by age, culture, nationality and the like. Zara is one of the fashion design retail stores which started to sell to Chinese online shoppers, online shopping platform owned by Alibaba. Our research is designed to find whether sales will increase and what are the key success factors to ensure it. To do the analysis we formulated research questions whose answers would provide us with the opportunity to find answers to these questions and to identify the current feelings of online shoppers in China. A questionnaire will be developed in English and translated to Chinese, and will be initially administered as a pre-test to small group of participants at Zhejiang Normal University. The actual study population will consisted of a total of 1000 individuals, located in Beijing, Shenzhen, Shanghai, Guangzhou, Wuhan, and Shandong. The questionnaire contained questions designed to collect information on demographics, Internet usage, brand knowledge and e-commerce activities (frequency of commerce and type of purchase, means used for purchase, transaction experience, and perceptions of e-commerce in China). The data will be analyzed first, demographic information is analyzed using descriptive analysis, second factor analysis is used for each variable and its indicators, third the general hypothesis is tested using independent sample t-test and at last, canonical analysis is applied in order to investigate the casual relationship between online ecommerce and sales. The research is intended to support Zara in securing profit and winning Chinese online shoppers.

Introduction

Zara is one of the world’s most successful fashion retailers, operating in 59 countries. Established in 1975, Zara is the flagship of Inditex (Industria del Disen˜o Textil, SA), a holding company located in Galicia (Northwest Spain). In a relatively short time frame Inditex has become the world’s second largest clothing retailer with 2,692 stores spread across 62 countries worldwide by the end of January 2006. In addition to Zara, which accounted for 66 percent of the group’s turnover in 2005, Inditex owns seven other clothing chains: (1) Kiddy’s Class (children’s fashion); (2) Pull and Bear (youth casual clothes); (3) Massimo Dutti (quality and conventional fashion); (4) Bershka (avant-garde clothing); (5) Stradivarius (trendy garments for young women); (6) Oysho (undergarment chain); and (7) Zara Home (household textiles).

As part of its expansion and internationalization strategy Zara entered China in 2006 and now operates in 146 stores. The fast-fashion brand began to sell online to Chinese shoppers on its own site, Zara.cn, in 2012. In 2014 Zara opened online store on Tmall, a Chinese website owned by Alibab Group Holding Ltd (BABA), where companies such as Nike Inc, Burberry Group Plc., and Gap Inc . sell their ware.

Zara is one of the strongest Western retailers in China, where Inditex has 456 stores. But its two-year old Zara.cn, which will continue to exist, isn’t even among the 10,000 most popular Web destinations in China, while Tmall is No. 7 (Alexa, 2013). Several Inditex competitors already have stores on Tmall that complement their bricks-and-mortar stores in China. They include U.S.-based Gap Inc., Forever 21 Inc., and Uniqlo Co. of Japan. Hence, the objective of this proposal is to study whether Zara’s sales will increase in Chinese market with Tmall. Information from this research will be...