Fukushima, Japan-based clothing company, Honeys Co., which makes casual wear for young women, is expanding its operations in China with its “kawaii,” meaning cute, clothing line, according to The Japan Times.
Known as Haolizi in China, Honeys entered China in 2006 and now has 570 stores in the country, many more than competitor Fast Retailing Co., the owner of Uniqlo. Founded in 1978 in Iwaki, Fukushima prefecture, and operating 870 stores in Japan, Honeys relies solely on word-of-mouth advertising, and avoids paying for advertisement.
This lack of advertising in China, however, hasn’t slowed down business. During the 2012 fiscal year, Honeys made more than ¥10 billion in sales in China, which accounted for 17 percent of its sales.
Xu Feng, the head of product development for China, noted that the company’s clothes sold in China must match the tastes of Chinese consumers, which favor brighter colors than Japanese consumers. Furthermore, to further its integration into the Chinese market, Honeys has hired Chinese workers to produce these clothes.
Despite the company’s rapid expansion into China, Honeys does not expect to turn a profit from fiscal year 2013, which ends this May, due to competition from European and American casual retailers such as Zara, H&M, M&S, and Old Navy. The company plans to offset losses by closing unprofitable operations. Michiro Ono, the head of Honeys in China, said “Some companies may be forced out of the market, it’s time for us to hold on.”
image source: honeys co.