Online fashion shops booming

"Low prices, convenience and abundant choices are the advantages of online shops," said Qian Feng, founder of Lesies.

"After we released new-season collections, we would see copycat designs online a week later. It was almost impossible for us to stop it," said Qian, who is also president of the Hangzhou Garment Designers Association.

A manager at Taobao.com pointed out a solution. He just asked: why don't you start your own Taobao shops? After hearing that, Gu figured out that they might have found a way out.

"Many of my peers were complaining about sluggish business. It was not that we hadn't considered doing business online. It's just that there were so many things to worry about," Qian said.

Online challenges

Hu Changcai, Na Wain's general manager. The brand's online sales are soaring. Provided to China Daily

For brand owners like Qian, the biggest concern about e-commerce was how to maintain the brands' high-end positioning.

Qian launched the Lesies brand in 1993. After almost 20 years of hard work, he turned it into a high-end label. And even though Lesies' online shop was established at the end of 2011, Qian is still worried about whether the brand will be seen as a low-level product because it has an online presence.

"The prices of clothes sold in online shops are only half or even a third of those sold in brick-and-mortar stores," he said.

Although Qian was initially reluctant about e-commerce, the sales revenue of Lesies' online shop in 2012 reached 50 million yuan ($8.13 million), accounting for 10 percent of the company's total sales.

Gu said that at first, many brand owners, like Qian, were unwilling to set up online shops, but since the brands had already made their names in China, once their online stores were launched, the sales results were satisfactory.

Last year, two Hangzhou brands were in Taobao.com's top 10 list for women's clothing sales in terms of revenue, according to a report released by the China E-commerce Research Center.

One of the two brands, Na Wain Garment Co, ranked fifth with an annual sales revenue of 190 million yuan.

Hu Changcai, general manager of Na Wain, said that it was fortunate that the company caught the e-commerce train at the last minute.

The company established an e-commerce department in December 2010.

"Before 2010, we regarded Taobao shops as distractions, hampering the healthy development of the industry, because there were so many shops that didn't do business according to the rules," Hu said.

However, after Hu had a taste of e-commerce, he had to admit that the field offers significant opportunities.

"Last year, the sales revenue of our online shop grew four times year-on-year. That's an unimaginably high figure for brick-and-mortar shops," he said.

To maintain a good relationship with the company's fast-growing customer group, Na Wain launched more than 150 online chat rooms for clients. Employees also get in touch with regular customers for suggestions and advice.

But, just like Qian at Lesies, Hu worried about brand positioning before the company launched its online store.

"Our solution was to diversify our products online and offline. Our target customers for the online shop are five to 10 years younger than those for the brick-and-mortar shops," Hu said. "High-end customers can still enjoy our services in brick-and-mortar shops, while younger ones can select more affordable clothing online."

Meanwhile, to maintain the design advantage of the online shop amid the fierce competition, Na Wain established a design team with 15 people. For this year's spring collection, for instance, a total of 96 new designs were released within two months.