Lectra eyes larger share of Chinese market

Lectra, the world leader in integrated technology solutions for industries using soft materials, plans to inject 110 million euros ($146 million) into R&D and marketing promotion in the next three years to augment its global sales.

"Focus will be placed on the Chinese market with about 10 percent of the investment to be spent," said Daniel Harari, chief executive officer of Lectra, at the China International Sewing Machinery & Accessories Show which will close on Saturday at the Shanghai New International Expo Center.

Harari said the funds will be used to promote sales in the Chinese market in a bid to increase Lectra's share in China from its current 10 percent of global revenue to 15 percent by 2015.

Lectra has invested 170 million euro in R&D in the past decade, accounting for nine percent of its revenue.

Harari presented his strategic vision during the show for Chinese apparel manufacturing companies, which are continuing to capture the country's evolving consumer market.

"We offer solutions for them seeking ways to expand their business activity," said Andreas Kim, managing director of Lectra China.

Many of these companies were traditionally manufacturers but are now evolving into what Lectra calls a hybrid business model which means companies with manufacturing roots that now also count design, development and retail as part of their activities, Kim said.

Lectra has distributed a white paper to explain how a company can make the transition from simply producing apparel to a true fashion brand. It explores how the changes taking place in China are contributing to a shift in focus from manufacturing to design and development, emerging areas of expertise and how advanced technology can support this transition, he said.

The paper said increasing wages and growing purchasing power are giving rise to a powerful, new consumer base that is hungry for fashion. Western brands have led the way, but this maturing consumer is demanding innovative style and increased product choice.

"These will be key points of differentiation as companies battle for their share of China's domestic market," said Harari.

His words were echoed by Lectra Fashion Marketing Director Anastasia Charbin, who said Chinese consumers are now becoming true fashion aficionados. Clothing oneself is no longer enough and there is definitely demand for fresh styling, improved sizes, and overall better fit and quality.

"There has been a seismic shift in the fashion landscape and more and more manufacturers are now dabbling in branding and retail," she said.

Those who have already made this transition are finding that the Chinese consumer has evolved and is far more sophisticated than 10 years ago, Kim said.

"They are now more design sensitive, which means that anyone aiming to sell to the Chinese market needs to compete in a drastically different way," he added.