Zippo refines ambitious retail strategy in China

China's second- and third-tier cites will be a top priority for the most iconic windproof lighter producer in the United States.

But instead of marketing its lighters, Zippo is focusing on its new line of apparel. It officially launched the collection at the 20th China International Clothing & Accessories Fair on March 27 in Beijing, making China the first international market to have access to its apparel.

China is the company's largest international market outside the US. In 2011, Zippo's sales grew by 52 percent in China to become its biggest overseas market. The company sells its products to 32 Chinese provinces, autonomous regions and major cities.

Mark Paup, Zippo's vice-president of sales and marketing, said the company has high growth expectations for China.

"The customers have been enthusiastic. I am very impressed by the number of people and the quality of people that have been coming through and how interested they are in our brand," he said. "Zippo's strong brand awareness unaided throughout China gives us a lot of credibility for at least to have people come and see what we are offering for menswear."

Zippo recently opened an office in Beijing's CBD area and Paup said the prospects are bright for the company to build upon its reputation as a lighter-maker with large Chinese customer base to create a top-tier lifestyle brand.

Zippo's menswear line is tailored to young Chinese men between the ages of 25-34 years old. Clothes are designed in the American classic style of ruggedness and durability.

"If you say there are one or two brands to which we are similar, I'd pick Timberland or even Marble Classic," Paup said. "We have currently four winter collections and one spring and summer collection. With that we have a pretty aggressive portfolio of shirts, jackets, hats and of course all the accessories, like bags."

Last year, Zippo opened its first apparel store outside the US in Qingdao, East China's Shandong province. The price range in Zippo's new store is between 1,300 and 2,500 yuan ($206 and $397) for the clothing line. A number of the clothes, like the lighters, are water- and wind-resistant.

Brent Tyler, Zippo's global brand manager, said Zippo selected Qingdao for its first apparel store because of the Qingdao people's keen fashion sense. The city has seen a dramatic economic growth in recent years and was viewed by Zippo as one of the most dynamic cities in China.

"We realized that Qingdao is a very culturally diversified city that has a large number of young people and foreign population," Tyler said. "We also found a dealer who really shares our vision of what we want to do in this city. It is the best option for us."

He said it is a fairly common strategy for companies to start new businesses in tier-two or-three cities to gain experience for a possible future expansion in top-tier markets such as Shanghai and Beijing. Zippo and its Chinese distributors are currently deciding on a location for its next apparel store, though more than likely it will be in a second-tier city.

Expecting a market boom, Zippo is planning to open another 15 apparel stores by the end of this year and 50 retail outlets throughout China in 2015. The company currently has a logistics and distribution center in Shanghai and more than 800 outlets and sales points across the country.

"We're also looking beyond China's tier-one cities by placing priority on tier-two and-three cities where more and more consumers are looking to trade up in terms of apparel purchases," Paup said.

Besides China, Zippo's other major overseas markets include Japan, the United Kingdom, Germany, France and Italy. India and Indonesia are two emerging markets for Zippo, whose global sales grew by 19 percent in 2011.

"Back to 2010, we thought we could do about $10 million in lighter sales in China in 2012, but our sales went way past that. The market this year will be way past our original projection. Top and second-tier cities so far have consumed most of our lighters," Tyler said.

Traditionally, the company has product catalogues that are specific for the US, Europe and Asia. At the end of last year the company introduced a specific catalogue for China and hopes these products can be appealing to more men around the ages of 21-35.

Zippo also established an account on China's popular micro blog site Weibo (similar to Twitter) to promote its business and target the young Chinese consumer.

"As we grow, diversify and learn everything from the China market, we will continue to develop the market with more products such as fragrances, bags, pens, watches and apparel," Tyler said.

Contact the writers at zhongnan@chinadaily.com.cn and zhanglei@chinadaily.com.cn