Evolution Patterns of Apparel Brands in Asian Countries

Abstract

Evolution of apparel brands constitutes an important role in the process of apparel industry development in a nation. However, brand evolution patterns are not included in most existing models of industry development, and very limited information is available in the literature on brand evolution patterns. As an earliest attempt, and based on an extensive literature review, the authors analyzed the emergence timing and order of three types of apparel brands (international brand, national brand, and private brand) and the socio-economic background that is related to the emergence in Korea and India. By juxtaposing the emergence of the three types of apparel brands with the textiles and apparel industry development stages in each country, five propositions are suggested with each describing when and how each type of apparel brand emerged. Academic and practical implications are provided based on the findings.

Keywords

brand evolution Korea India

How and when do national brands emerge in a developing country? Many assume the availability of apparel brands across a nation and fail to understand that not every developing country has national brands as seen in advanced nations. The existence of a national brand indicates that the nation’s apparel industry has reached a certain economic level, since the development of a national brand requires certain conditions such as a set of knowledge and skills needed for apparel products development, an understanding of consumer demands, financial capital, marketing concepts, and so forth. Emergence of a national brand is an important part of the apparel industry development in a nation. Accordingly, the apparel brand evolution pattern may be related to that of the textile and apparel (T & A) industry development within a nation. Nonetheless, most theories and models concerning industry development disregard the brand evolution patterns in their analyses and very few explain the timing of apparel national brand emergence. In analyzing the development patterns of the T & A industry, Toyne, Arpan, Barnett, Ricks, and Shimp’s (1984) model has been largely utilized. While the model serves as an important basis to predict the development patterns of the T & A industry by providing the distinctive characteristics of each stage, it fails to explain the evolution patterns of apparel brands. For the sake of analysis, we classify apparel brands into three types: international brand, national brand, and private brand (PB). Given that each brand type requires a different set of conditions for its emergence, an understanding of the emergence as well as the emergence order among the three brand types will shed light on apparel industry development patterns more comprehensively.

As a preliminary attempt to understand the development of apparel brands in a nation, this study explores when and how three types of apparel brands emerge and evolve in two Asian economies with differing levels of economic development (i.e., Korea and India). The when aspect will be analyzed by juxtaposing the emergence of the three apparel brand types with the apparel industry development stages and the how aspect will be estimated by relating social and industrial changes to the emergence. South Korea (from now on, Korea) was chosen because in the last six decades the country has undergone all six apparel development stages suggested by Toyne et al. (1984) and has witnessed the entry of international brands and the development of national brands and PBs; thus, Korea provides a good setting to observe the evolution process of the different levels of apparel brands. India was selected since it shows a dissimilar pattern of textile complex development compared to the East Asian newly industrialized economies (NIEs; i.e., Korea, Taiwan, and Hong Kong; Tewari, 2008); yet, India’s apparel industry shows significant growth and the three types of brands have been developing rapidly. By comparing the different levels of apparel industry development, common apparel brand evolution patterns and socioeconomic backgrounds contributing to the evolution will be identified across these two countries.

To map the emergence of apparel brands in Korea and India, an extensive literature search was conducted, which included government websites, reports from trade organizations, company websites, and academic and trade journals. Information available from these sources was compiled and consolidated. Based on the analysis, five propositions are suggested, followed by implications for practitioners and theory development.

Industry Development Models

The basic assumption of this study is that the apparel brand evolution pattern is related to a country’s T & A industry development pattern. Therefore, it is important to understand models with regard to industry development. In the literature, two approaches have been used to explain industry development. The first approach focuses on understanding the pattern through the industry life cycle. Examples of this approach include Rostow’s (1960) stages of economic growth model, Toyne et al.’s (1984) six development stages in textile complexes, and Akamatsu’s (1962) flying geese model. The other approach explains why and how an industry upgrades. Gereffi’s (1994) global commodity chain (GCC) is an example of this approach. The next section briefly introduces each model.

Rostow’s Five Stages of Growth Model

Rostow (1960) explains a nation’s economic growth with five sequential stages in very general terms. The five stages include: the traditional society, the preconditions for takeoff, the takeoff, the drive to maturity, and the age of high mass consumption. The intent of Rostow’s model is to exhibit an economic way of looking at how whole societies evolve; thus, it offers an extremely macro perspective but is limited in giving an idea of how the sequential developmental pattern can be applied to understanding the growth pattern of a particular industry.

Toyne et al.’s Six Development Stages of the T & A Industry

Compared to Rostow’s (1960) general approach, Toyne and his colleagues focus on the textile complex development and specifically classify it into six stages: embryonic, initial export, rapid expansion and upgrading, The Golden Age, full maturity, and significant decline. The six stages can be observed in various parts of the world as a country belongs to one stage and then moves to the next. The characteristics of each stage and when Korea and India experienced each stage is summarized in Table 1. As with other developing economies, the apparel industry was the starter industry for Korea and played a major role leading the country’s early export growth, which began in the 1960s. Now the country has grown enough to successfully sell its own branded apparel goods to international markets, representing the significant decline stage (Jin & Moon, 2006; Korea Federation of Textile Industries, 2012). India’s early export of apparel stage began in the 1970s, but the country is now one of the world’s top 10 exporters of apparel and textiles (Tewari, 2008) and the fifth country from which the U.S. imports apparel goods (American Apparel & Footwear Association, 2009), representing the Golden Age stage.

Table 1.

The Apparel Industry Development in Korea and India by Toyne et al. (1984)’s Six Stages.

Stages	Characteristics	Korea	India
Embryonic	Produce simple fabrics and garments made from natural fibers for domestic consumption and import fiber, fabric and apparel	1950s	1960s
Early export of apparel	Export of low-end, mature varieties, native apparel, or apparel requiring elaborate handwork	1960s	1970s Handloom garments and clothing of indigenous cotton fabrics were the major export items
More advanced production of fabric and apparel	Domestic production of fabric increases sharply in terms of quantity, quality, and sophistication and export of fabric begins Apparel exports are rapidly expanded and upgraded. Textile complexes become large, more diversified, more concentrated, and more internationally active Movement to this stage is typically spurred by investment, contracting, or the provision of marketing or managerial assistance by large manufacturer and retailers in more developed countries as well as local government policies of import substitution and export development	1970s The export of apparel and textiles increased by 13 times during the 1970s, accounting for about 40% of Korean total exports in 1971 (Kang & Jin, 2007)	1980s–1990s Between 1985 and 1990, India’s apparel export surged at an average compound rate of 19% per year after the deregulation of the textile industry by the government happened after 1985 (Tewari, 2005)
Golden Age	Consolidation and diversification in product mix continue; A huge trade surpluses result Textile complexes spread internationally via foreign investment and contractual arrangement	1980s Trade surplus increased. Textile companies established factories in Central America to export to the U.S. market	Since mid-2000 Investment in manufacturing capacities overseas and small design centers in Italy and U.S. started (Tewari 2005)
Full maturity	Employment in the complexes decline especially in the apparel sector; however, total outputs may be increasing Industrial concentration continues and production and process sophistication reach high levels The complexes move toward more capital-intensive production	1990s Employment in the apparel sector was decreased due to declining of apparel export. Development of value added textile products was emphasized (Korea Federation of Textile Industries, 2011)	—
Significant decline	Employment and the number of firms decline substantially Offshore production increase significantly Significant trade deficit appears in many sectors, especially in apparel and fabric	Since 2000s A significant increase in offshore production. Significant fall in the number of firms and employees (Jin & Moon, 2006)	—

Note. Developed by authors based on Toyne et al. (1984) and literature review.

As with other stage models, Toyne et al. (1984) also views the development process as sequential; however, not every country passes through the proposed sequential stages. It is important to note that due to government intervention, fiber and textile production in India occurred earlier than the rapid increase of its apparel exports. This is a contrast to Toyne et al.’s (1984) view in that the increase of apparel exports and textile production took place at the same time as the more advanced production of fabric and apparel stage. As early as 1965, two decades before India became active in apparel exports (1985), India’s textile exports had a 7.3% share in the global market, ahead of the United States (6.6%) and Hong Kong (2%), while the rankings were totally changed later. This is because of the Indian government’s variety of regulatory policies on the T & A industry with the intent of job creation and local development starting in the late 1960s and lasting until the mid-1980s (Tewari, 2005). Despite this exception, the six development stages model provides a clear understanding of the directions that textile complexes follow within a nation.

Akamatsu’s Flying Geese Model

While Rostow (1960) and Toyne et al. (1984) illustrate the development process within a nation, Akamatsu (1962) considers the influence of other nations on the process in the flying geese model. On the basis of Japan’s experiences in catching up with the West, Akamatsu explains national economic development with three-series curves, representing import, production, and export, respectively. In this model, the import–production–export activities usually occur sequentially for each product category with the passage of time. During the first wave, the follower economy starts to import foreign goods from the advanced economies, which instills the formation of local industrial development. The second wave begins with actual production of the imported manufactured goods with either local or foreign capital or a combination of the two. When the local production becomes excess, the third curve, export, starts (Kasahara, 2004). The original three curves model was later extended to explain the dynamic change of different industries in the same country and further to explain the shift of industries from an advanced country to less developed countries (Kwan, 2002). For example, industry development in a country starts with textiles, followed sequentially by chemicals, iron and steel, automobiles, and electronic/electrical industries. In addition, most economies start industrialization with the textile industry, but as they lose their competitive advantages the industry moves to less-developed countries (Kwan, 2002). As with the geese flying in an inverted V shape, in the textile industry Japan was the lead goose. The next tier geese, such as the NIEs (e.g., Taiwan and South Korea), follow the lead goose. The third tier, Association of Southeastern Asian Nations (e.g., Thailand), are followed by the next tier, China, then India, and Vietnam. The basic driving force of such a shift is emulation; a latecomer economy emulates the industries of advanced economies in pursuit of development (Kwan, 2002). Even though the flying geese model has drawbacks, it is regarded as a very effective tool to describe the regional economic development patterns in East Asia.

Gereffi’s (1994) GCC Framework

The above stage models suggest the characteristics of each stage and roughly project the direction, but they are largely limited in explaining why and how each stage moves to the next. In the 1990s, Gereffi (1994, 1999) addressed the why and how aspects of the change dynamics with the GCC framework. GCC refers to “the whole range of activities involved in the design, production, and marketing of a product” (Gereffi, 1999, p. 38). The research focus of GCC has been governance structure (i.e., how lead firms determine and control the factors under which others operate in a given chain). Buyer-driven versus producer-driven commodity chains are two classifications of GCC by governance structure, and the apparel industry is a typical example of a buyer-driven commodity chain.

With the framework of GCC, Gereffi explains why and how the apparel commodity chain in East Asian NIEs (e.g., South Korea, Taiwan, Hong Kong) upgrades from simple assembly to full package supply or OEM (original equipment manufacturing) production and then to OBM (original brand name manufacturing) production. Such industrial upgrading involves organizational learning gained through participation in GCC (Gereffi & Tam, 1998). In other words, applying the GCC framework Gereffi contends that in large measure, apparel firms in East Asian NIEs were able to improve themselves by establishing close linkages with various lead firms (e.g., big U.S. buyers such as J.C. Penney and Wal-Mart) that serve as the primary learning agents, and that provide material inputs and technology transfer, and coordinate the production networks.

Propositions

Through the extensive analysis of literature, the approximate timing of emergence, growth, and decline of three types of brands were identified. The findings are summarized in Figure 1 with the juxtaposition of Korea and India’s developmental process of the apparel industry. Timing here means the approximate periods when a group of brands show significant patterns of development. In other words, the emergence of one or two brands or negligible numbers is not considered a clear pattern. Based on the analysis, the three stage models, and the GCC framework provided above, five propositions were proposed and the socioeconomic background and underlying dynamics that propelled the evolution were identified.

Figure 1.

Evolution patterns of apparel brands in Korea and India. Note. Developed by authors.

Proposition 1: In developing countries, international brands are launched in the more advanced production of fabric and apparel stage, earlier than national brand emergence.

Our literature review revealed that the entry of international brands in Korea and India began when export activities took off—the mid-1970s for Korea and the late-1980s and early 1990s for India (i.e., more advanced production of fabric and apparel stage in each country; see Figure 1). In developing countries, traditional dress is more prevalent as everyday wear, and Western style dress is introduced with the start of modernization, meaning that traditional and Western style dress coexist until a certain level of modernization. In the case of Korea, it took 20 years for every Korean woman to adopt Western style dress as everyday wear (Delong, Koh, Nelson, & Ingyoldstad, 1998).

When both countries were in the more advanced production of fabric and apparel stage, the traditional forms of dress (Hanbok in Korea and Sari in India) were still seen in the street; in fact, Sari is still used as everyday wear in India. The domestic apparel market was largely served by tailor shops for traditional forms of dress and ready-to-wear apparel for Western dress was just being introduced by local manufacturers, meaning that the domestic market was not ready for developing apparel brands in terms of demand and supply. Regarding demand, ready-to-wear clothes were only partially demanded by the population. Concerning supply, the skills and knowledge required for developing apparel brands were not developed yet. Because an apparel industry in the more advanced production of fabric and apparel stage focuses only on OEM production for foreign buyers, the industry has not had opportunities to develop the skills and knowledge needed for apparel brand development. This means that the branding concept is new and innovative and needs to be learned from more advanced economies.

In most developing countries, the government discourages imports in order to protect domestic development. Korea and India were no exception. Nonetheless, for the purpose of learning from foreign apparel companies, both governments partially allowed foreign brand entry via licensing or technical contract. However, direct import of finished apparel goods and direct investments from foreign companies were limited. Thus, at the early stage of international brand entry, most foreign branded goods were produced under a licensing agreement. In Korea, 43 international brands were licensed by 26 companies between 1979 and 1983 (Min et al., 1986). The French apparel brand Cacharel was licensed in the late 1970s and the U.S. brand Arnold Palmer in 1981 (Jung, 2005). Many U.S. jeans brands, including Jordache, Levi’s, and Lee, were introduced in the early 1980s as well (Delong et al., 1998).

In India, international brand entry became more active in the early 1990s due to India’s economic reforms that released trade barriers. The U.S. brand Van Heusen entered in 1990, and Reebok, Lee, Nike, and Levi’s all entered in 1995 (Son, 2007). Here it is important to note that a couple of ready-to-wear brands, such as Bando Fashion in Korea (started in 1974) and Park Avenue in India (started in 1986), existed when international brands entered the countries; however, most of these initial domestic brands were available only in major cities and focused on men’s suits for high-end customers (Hwang & Jung, 1993). Therefore, it is more accurate to understand these brands as the beginning of ready to wear as opposed to tailor shops, not national brands that require established distribution channels and merchandizing functions across the nation. The development of national brands in its true definition took place after the presence of international brands in each country.

Proposition 2: When international brands are first introduced in developing countries, they are positioned as premium brands since they have the competitive advantage in high quality and design.

In most developing countries, aspects of design and quality are largely lacking as apparel companies focus on offering simple assembly or OEM for foreign buyers; thus, international brands have a competitive advantage over domestic apparel goods in terms of design and quality (Hwang & Jung, 1993; Min et al., 1986). Owing to this competitive advantage, international brands are typically positioned as a premium image in developing countries, even though the brand is not necessarily a premium brand in the home market. For example, Levi’s and Tommy Hilfiger are currently considered premium brands in India while their premium image has been lost in the United States. All brands launched by Korea’s E-land Group in China—E-land, Scofield, Teenie Weenie, Roem, Prich, Scat, and Teresia—are regarded as premium brands with the average price of an item about 2 times higher than that of the average worker’s monthly income, while in fact they are perceived as mid-priced brands in the Korean market. E-land group is phenomenally successful in China, ranking second in the Chinese apparel market by revenue and achieving a 63% annual average growth rate since 2000 (E-land, 2012). As with the E-land group’s brands in China, the Korean brand TB2 is a huge success in China with its premium positioning strategy, while it is sold in the mid-priced range in Korea (Lee, 2012, June).

Consumer preference toward international brands over domestic brands in developing countries is well documented and widely accepted in the literature (e.g., Batra, Ramaswamy, Alden, Steenkamp, & Ramachander, 2000). For example, in India the Levi’s brand was evaluated positively for its quality and emotional benefits compared to local jeans (Kumar, Lee, & Kim, 2009). The preference was even more fervent when international brands first became available, since they were a scarce commodity and served as a status symbol (Ger, Belk, & Lascu, 1993). Using international brands to exhibit one’s social standing is more prominent in developing countries where status mobility exists (Kottak, 1990). Ownership of an international brand is thus perceived as a sign of success and empowerment among consumers (Willis, 2006). Among Indian consumers, an international brand is a sign of “foreign envy,” so “if you own something that’s from abroad, it sets you apart from your peers” (Kavilanz, 2007, May 1). The significant amount of newspaper and media coverage vigorously reports consumers’ willingness to buy international brands regardless of their high prices. In India, in particular, foreign brand popularity is such that about half of working women’s salaries is often spent on purchasing international brand apparel (Hasan, Issar, Ojha, & Singh, 2006, November 6).

Such popularity of international brands encourages domestic players to develop their own brands for domestic markets, as the flying geese model explains. However, the premium image of international brands may not last forever, as countries develop their own national brands and the quality and design aspects of national brands continuously improve. With the development and enhancement of domestic national brands, the premium image of international brands may progressively wane (Alden, Steenkamp, & Batra, 1999).

Proposition 3: In response to the influx of international brands, major apparel manufacturers and exporters start to develop national brands. The emergence of national brands occurs in the Golden Age stage in developing countries.

Our extensive analysis revealed that the emergence of national brands in each country happened during the Golden Age stage after international brands were introduced in the market—the early 1980s in Korea and the mid-1990s in India (see Figure 1). The socioeconomic background around the national brand emergence can be explained by both the demand and supply sides. From the demand side, consumer demand for branded apparel goods is augmented during the time international brands are introduced in the market, owing mostly to growing middle-income consumers. In the case of Korea, the 1980s witnessed a large trade surplus and remarkable economic growth achieving gross domestic product (GDP) per capita of $6,303 in 1990, up from $1,660 in 1980 (Cho, Park, & Kang, 2012). This means Korea experienced a 280% increase in GDP per capita during one decade, resulting in rising income as well as a growing number of middle-income consumers. This economic success led to the hosting of the Asian games in 1986 and the Seoul Olympic Games in 1988. As a result, consumer demand for active sportswear and leisure wear increased. In addition, the liberalization in the early 1980s of the decades-long tradition of school uniforms allowed consumers to look for more casual clothes (Korea Federation of Textile Industries, 2012). Taken together, Korean consumers’ demand in the 1980s became more diversified and sophisticated. India’s economy has grown steadily since 1990 after the economic liberalization of 1991. Responding to this growth, the introduction of organized retail formats such as department stores and shopping malls started in the mid-1990s and increased the demand for high quality brand goods (Tewari, 2008).

From the supply side, major apparel manufacturers and exporters were able to cultivate the knowledge base needed for developing an apparel brand through direct production of garments for foreign buyers (Ha-Brookshire & Lee, 2010), indirect observation of the international brand management launched in the market, or both. This is in line with Gereffi’s GCC model in which learning gained through participation in GCC is shown as a major asset that helped Asian NIEs upgrade from OEM to OBM (Gereffi & Tam, 1998). National brand development was, in fact, a viable growth strategy for many apparel manufacturers and exporters because of the growing penetration of international brands and pressures to develop their own brand. With well-matched supply and demand sides, the two countries’ prominent national brands emerged. A commonality found in both countries during the analysis was that national brand development evolved first in the men’s suits for high-end markets and then gradually expanded to women’s apparel and mid-priced casual wear.

Korea’s three major apparel brands emerged in the 1980s: women’s formalwear brand Deco, by Deco, Inc.; Mine, by Handsome, Inc.; and mid-priced casual brand E-land targeting young consumers (Deco, 2012; E-land, 2012; Handsome, 2012). The E-land, Brenntano, and Underwood casual wear brands developed in the 1980s were especially a huge success, which eventually helped with the establishment of the E-land Group that later expanded to retail sectors. E-land Group is now Korea’s largest fashion company by revenue, and it owns more than 60 apparel brands in Korea (E-land, 2012).

Starting in the late 1980s, Korean apparel exporters lost their competitive advantage in exporting goods owing to labor cost increases, which made them turn to domestic markets. Leveraging their decades-long export experience, access to new technologies, and knowledge of world-class finishes, fabrics, colors, and styles, Korean apparel exporters were able to successfully turn to the domestic market. The Parkland mid-priced menswear brand, developed by Parkland, Inc. in 1989, is a good example. Based on the knowhow acquired through dress shirt exports since 1973, the company successfully launched the Parkland brand, targeting a mid-priced menswear market that had not existed before (Parkland, 2012). The women’s brands Bestibelli and Si by Sinwon, Inc. and Mercoledi by Yulim, Inc. (all launched in 1990) were the next examples developed by export houses (Park, 1990, August 27).

Since the mid-1990s, the emergence of national brands in India has been steadily growing, and the top 20–30 T & A firms have all introduced their own national brands (Tewari, 2005); Color Plus in 1993, Flying Machine relaunched by Arvind Mills in 1997 after a fail, Parx by Raymond in 1999, and Indian Terrain by Celebrity Fashion Limited (CFL) in 2001 are a few examples (Arvind Mills, 2012; Color Plus, 2012; Kamath, 2010, March 5; Raymond Group, 2012).

Color Plus is a leading national brand that ignited the evolution of national brands in India. The brand was developed in 1993 by Ambattur Clothing Company, a leading apparel exporter, and was bought a few years later by the Raymond Group, India’s foremost vertically integrated apparel company established in 1925 (Raymond Group, 2012; Tewari, 2005). The brand has made continuous growth with 350 stores now across the country (Color Plus, 2012). Flying Machine is India’s representative jeans brand, developed by Arvind Mills, the flagship company of the Lalbhai Group. Headquartered in Ahmedabad, Gujarat, India, the company is India’s largest denim manufacturer and the world’s fourth largest producer and exporter of denim. The company not only retails its own brands like Flying Machine, Newport, and Excalibur but it also licenses international brands such as Arrow, Lee, Wrangler, and Tommy Hilfiger through its nationwide retail networks (Arvind Mills, 2012). Another leading national brand in India is the premium menswear brand Indian Terrain established in 2001 by CFL. CFL, established in 1988 in Chennai, is an exporter producing both shirts and trousers for Gap, Timberland, Dockers, Nautica, The North Face, Ann Taylor, Armani Jeans, and Eddie Bauer, as well as for European union markets (Kamath, 2010, March 5). In summary, national brands emerge in the Golden Age stage when developing countries grow enough economically to form diversified and sophisticated consumer demand for branded apparel and when the skills and knowledge required for apparel brand development are learned from export experiences and observation or participation in international brands’ management in the country.

Proposition 4: Internationalization of a national brand begins when a country’s industry transfers to the significant decline stage from the full maturity stage.

Our analysis discovered that Korea’s national brands began selling goods with their own brand names in international markets in the late 1990s when the country’s apparel industry transitioned from the full maturity stage to the significant decline stage. However, internationalization of national brands has not yet emerged in India since the country has not reached the full maturity stage.

In the 1990s in Korea, virtually all the apparel companies, including mid-sized exporters, catered to the mid-priced casual sectors, responding to increased demand for sports casual apparel after the Seoul Olympic Games in 1988 and the significant apparel export decline, which led to an explosive launch of apparel brands. In 1990 alone, more than 10 mid-priced casual wear brands were launched. Launched brands included J vim by Sungdo Apparel Inc., Ompalos by SG Corporation, Tipi Cosi by Bando Fashion, Cascade by Kolon Ltd., and Caspi by Sun Kyung Ltd. (Mid-priced apparel is struggling, 1991). The surge of national brand development in the 1990s made the domestic market overheated, which led companies to turn their attention to international markets. This finding is consistent with the flying geese model that specifies the sequential occurrence of import–production–export activities in each product category. The model contends that export starts when local production becomes oversupplied. That is, when the local market is full of brands (i.e., oversupply), the export of apparel brands (i.e., internationalization) becomes the next strategic focus to survive. This view also supports Singleton (1997), who suggested that internationalization is a viable strategy in the decline stage, and Rostow (1960), who suggested that international activities begin in the drive to maturity stage.

According to a recent survey of more than 2,000 Korean apparel companies, approximately 180 Korean apparel brands have entered international markets with 80% operating in China. These internationalization activities have become very active since 2000 across all apparel sectors including men’s, women’s, children’s wear, sportswear, and innerwear (The status of internationalization, 2007). China was the first country that most Korean apparel companies chose to enter because of proximity in culture as well as geography, but the scope of the international countries has been diversified ever since. Not every Korean apparel brand that expanded to international markets succeeded, but E-land Group and Beaucre Merchandising Co., Ltd. are two leading Korean companies successfully operating in various international markets.

E-land Group is the earliest company to escape the saturated home market and expand to international markets. After opening a concession store in Shanghai in 1997, the group continued to expand its operations in China, commanding 1,084 concessions located in 428 department stores in 119 cities and 29 provinces in China as of December 31, 2007. The company now operates in the United States with Who.A.U. launched in 2007, as it continues to open more stores (E-land, 2012).

Beaucre Merchandising Co., Ltd. started its internationalization in China in 1999 with its brand On & On. Now the brand has 187 stores with 757 employees ranking within the top five international brands in Chinese department stores in terms of sales volume (Jean, 2012, May 3). On & On entered Russian and Singaporean markets in 2011 (Beaucre Merchandising, 2012). The brand W, another successful brand of the company launched in Korea and China simultaneously in 2004, is now operated in Vietnam, Hong Kong, and Taiwan (Beaucre Merchandising, 2012). In summary, the internationalization of national brands starts when the domestic market becomes competitive with an oversupply of national brands in the middle of the transition from the full maturity stage to the significant decline stage.

Proposition 5: The emergence of a PB happens after national brand development.

Our analysis found that the emergence of PBs in Korea happened in the early 1990s during the full maturity stage, but in India they emerged in the late 1990s during the Golden Age stage. However, the emergence order (i.e., development of PBs follows national brands) was found to be identical between the two countries; thus, Proposition 5 only specifies the emergence order not the emergence stage in apparel development.

PBs (store brands or private labels) are developed by retailers for the purpose of differentiating their stores from competitors by carrying unique products that do not exist elsewhere, as well as for generating higher margins. Retail stores carry both national brands and PBs, and the proportion varies by retail format and country. It is generally known that PB development is practical only when the retailer has high levels of volume; thus, retail concentration is a key factor in private label development (Lincoln & Thomassen, 2009). In Korea, a PB was not introduced until the early 1990s, probably because of the late development of mass retailers and the small number of branch stores that enable retailers to take advantage of economies of scale owing to the country’s small geographical size. Examples of PBs developed in Korea include Ottman Elegance by Lotte department store in 1990, Peacoco and Sharday by Shinsegae department store in 1992 and 1993, respectively, and Milano Story by Hyundai department store in 1997 (Kim, 1999).

PB development in India came early, right after national brand development in the Golden Age stage, as opposed to occurring in the full maturity stage in Korea. The reason for the early development of PBs in India can be explained by the rapid rise of department stores and shopping malls across urban areas of the country starting in the mid-1990s; this development was led by leading retail groups that are mostly subsidiaries of Indian conglomerates (Tewari, 2008). Starting in 2001, modern retail space in India increased dramatically. In 2003 alone, roughly 10 million square feet were added (Deloitte Development, LLC, 2007). Such abrupt establishment of retail malls required a large volume of high quality branded goods to fill the sales floors; however, national brand development was not as fast as retail sector development, which motivated department stores to develop their own labels (Tewari, 2008). Therefore, the emergence of a department store meant the emergence of a PB in India. As a result, Indian department stores carry higher proportions of PBs than do Korean department stores. For example, the retailer Westside carries 90% of its goods as a PB, meaning only 10% of goods are national brands in the store, followed by Reliance at 80% and Pantaloons at 75% (Muralidharan, 2009, September 1). One unique aspect of PBs in India is that the name of the PB and the store are the same. For example, Pantaloons is a store name as well as a PB name. PBs in three major department stores in India include: Shoppers’ Stop (Chandru L. Raheja Group) developed in 1991, Pantaloons (Future Group) developed in 1997, and Westside (Trent, a subsidiary of Tata Group) developed in 1998 (Pantaloon retail India, 2012; Shopper’s Stop, 2012; Trent, Ltd., 2012).

Discussion

Through the five propositions postulated on an extensive literature review, the authors were able to identify the emergence timing as well as the emergence order of three types of apparel brands in the development of the textiles and apparel industry in Korea and India. Emergence facts were further explained by the socioeconomic background information associated with the development.

The identified emergence timing and order of apparel brands largely support existing industry development models. In particular, at the brand level, we identified the same sequential emergence pattern of import–production–export that the flying geese model (Akamatsu, 1962) suggested. The concept of apparel brand in developing countries is first debuted via importing of international brands from economically advanced countries (Proposition 1) and then domestic production of the countries’ own national apparel brands follows (Proposition 3). Once the apparel brands are oversupplied, internationalization of a country’s national brands begins (i.e., export; Proposition 4). We also discovered that the development of national apparel brands occurs in the Golden Age stage after extensive OEM export activities happen in the more advanced production of fabric and apparel stage (Proposition 3). This finding supports the GCC model (Gereffi, 1994) that explains the industry upgrade pattern from OEM (i.e., apparel production per buyers’ specification) to OBM (i.e., apparel production of their own brands). The model maintains that the upgrade is possible because of learning gained via participating in GCC. The findings could not be explained by Toyne et al.’s (1984) model since the model did not specify the brand emergence timing or order. However, as posited, we found that the emergence patterns of three apparel brand types are, to a large extent, related to a country’s T & A industry development as Toyne et al. (1984) suggested. As shown in Figure 1, relationships were found between emergence and the apparel industry development stages. When both T & A production increases greatly in terms of quantity, quality, and sophistication (i.e., more advanced production of fabric and apparel stage), international brands from economically advanced countries are launched (Proposition 1). In the Golden Age stage, national brands emerge (Proposition 3), and in the significant decline stage, internationalization of national brands starts (Proposition 4).

The authors also found that in both countries, international brands emerged first, followed by national brands and PBs (Propositions 1 and 5). In addition to this emergence order, a common premium branding strategy of international brands entering developing countries (Proposition 2) was provided. In each type of brand emergence, social, economic, and industrial changes led to the brand emergence, but the changes were not necessarily the same by country. Each country has a different export policy, industry structure, country legacy, and dynamics in the T & A complexes, thus it is important to understand the background that impacted the evolution of apparel brands.

Overall, the two countries are similar in emergence timing and order except the emergence timing of PBs. PB development happened in the full maturity stage in Korea but in the Golden Age stage in India. Compared to Korea, PB development came earlier in India because of the varying differences in speed, scope, and timing in retail development between the two countries. Therefore, Proposition 5 proposes only the emergence order (i.e., PB development occurs after national brand development), not the timing in certain developments of the T & A industry. The timing of PB development merits further studies with more country cases.

Theoretical and Practical Implications

As an initial attempt to understand apparel brand evolution patterns in developing countries, the authors proposed five propositions. Existing literature largely focuses on sequential patterns of industry development and overlooked the dynamics of apparel brand development in the process of the apparel industry development in a nation. For example, Rostow (1960)’s model is quite macro and does not specifically explain the developmental patterns of the apparel industry. Both Toyne et al. (1984) and the GCC model (Gereffi, 1994) explain the pattern within the T & A industry but from the production perspective. The flying geese model (Akamatsu, 1962) also explains a country’s development pattern in various industries, but again from the production perspective. Because of the focus on production, brand development patterns are largely disregarded. In that sense, this study contributes to the literature in at least identifying several points around apparel brand development with empirical cases in two countries; not every country, however, has apparel national brands. Apparel brands evolve at a certain stage of T & A industry development. The timing of national apparel brands occurs when demand for branded apparel goods and supply for the development are met, which takes place after a country’s economy reaches a certain level. Three types of apparel brands emerge in a certain order, and the five propositions proposed in this study specify when and how these three types of apparel brands emerge. Since no industry development models specifically suggest the emergence timing and order of the three types of apparel brands in the process of apparel industry development in a nation and the socioeconomic background related to the emergence, the findings of this study serve as a basis on which more refined industry development models can be established. It is hoped that more dialogues and case studies are conducted around the propositions so that more accurate propositions toward a theory can be developed.

The findings of this study provide important implications for the apparel industry in developing countries as well as in developed countries. Based on the findings, the apparel industry in developing countries can decide what strategies and investments they should make at different periods of their evolution as this study projects when and how three types of apparel brands emerge. For examples, the Golden Age stage provides a good time for apparel national brands to be developed (Proposition 3) because demand and supply for the development matches and the socioeconomic and industry environment matures. PBs can be developed after national brand development (Proposition 5). When the industry reaches the significant decline stage, it is time to internationalize national brands (Proposition 4).

For apparel companies in advanced economies, the findings can be utilized to determine internationalization timing, countries to enter, and a pricing strategy. In specific, the findings suggest that a T & A industry in the significant decline stage will need to internationalize its national brands (Proposition 4), and it is most appropriate to enter countries in the more advanced production of fabric and apparel stage (Proposition 1) as demands for branded apparel goods emerge. In such cases, a premium pricing strategy will work best (Proposition 2) as design and quality of international brands serve as a huge competitive advantage over T & A industries in the more advance production of fabric and apparel stage. In addition, apparel firms in advanced economies will encounter competition with local players by the time the T & A industries reach the Golden Age stage as local businesses will develop their own national brands. Thus, more refined pricing and merchandizing strategies need to be developed to compete with local players. Each branding development requires a certain set of skills and knowledge. The required resources, together with suggested branding strategies based on the propositions, are summarized in Table 2.

Table 2.

Suggested Branding Strategies Based on Propositions and Required Resources for Each Stage.

Stages	Suggested Branding Strategies Based on Propositions	Required Resources
More advanced production of fabric and apparel stage	Need to cultivate the knowledge base needed for developing an apparel brand through direct OEM production for foreign buyers, indirect observation of the international brand management launched in the market, or both	Financial investment for large volume OEM production is needed
Golden Age	National brand needs to be developed since demand and supply for the development matches and the socioeconomic and industry environment matures (Proposition 3). Private brand can be developed after national brand development (Proposition 2)	A skilled workforce that can lead design, branding, and marketing is needed
Significant decline stage	Internationalize its national brands (Proposition 4) Where : To the countries in the more advanced production of fabric and apparel stage as demands for branded apparel goods emerge (Proposition 1). How : A premium pricing strategy will work best as design and quality of international brands serve as a huge competitive advantage (Proposition 2). However, more refined pricing and merchandizing strategies need to be developed when local players develop their own national brands	A workforce with good understanding of global markets is needed for the internationalization of its national brands

Note. OEM = original equipment manufacturing.

The findings of this study can also be effectively used for governments in developing countries in shaping the direction of their apparel industry. The development for each apparel brand type requires a different set of skills and knowledge; thus, governments in developing countries will need to provide appropriate support for the necessary skills and knowledge development and release regulations that inhibit the industry from further development.

Limitations and Future Studies

The suggested propositions are based on an analysis of two country cases; more cases should be analyzed to validate the propositions and fully understand the patterns. Developing countries in Latin America or Africa may provide different patterns since the countries differ in terms of socioeconomic background, cultural orientations, and so forth. Thus, analyses on developing countries other than Asian countries are recommended. While not proposed, the authors found that export timing and volume, influx of international brands, and the level of retail development are largely dependent on government policies. Therefore, for future studies, it is recommended that a nation’s government policy related to the apparel and textile industry be taken into account when analyzing apparel brand development patterns of the industry.

Footnotes

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors received no financial support for the research, authorship, and/or publication of this article.

References

Akamatsu

(1962). A historical pattern of economic growth in developing countries. Journal of Developing Economies, 1, 3–25.

Alden

D. L.

Steenkamp

J. E. M.

Batra

(1999). Brand positioning through advertising in Asia, North America, and Europe: The role of global consumer culture. Journal of Marketing, 63, 75–87.

American Apparel & Footwear Association. (2009). An annual statistical analysis of the U. S. apparel & footwear industries annual 2008 edition. Arlington, VA.

Arvind Mills. (2012). Retrieved from http://www.arvindmills.com.

Batra

Ramaswamy

Alden

D. L.

Steenkamp

J. E. M.

Ramachander

(2000). Effects of brand local and nonlocal origin on consumer attitudes in developing countries. Journal of Consumer Psychology, 9, 83–95.

Beaucre Merchandising Co. Ltd. (2012). Overview: Global fashion leader. Retrieved from http://www.ibeaucre.co.kr/kr/company/overview.asp.

Cho

Park

Kang

(2012). The economic growth in Korea and changes in social indicators. Seoul, Korea: The Bank of Korea.

Color Plus. (2012). Raymond brand offerings. Retrieved from http://www.raymondindia.com/off_brnd_cp.asp.

Deco. (2012). Deco great heritage and new vision. Retrieved from http://www.deco.co.kr/.

10.

Deloitte Development, LLC. (2007). China & India: Comparing the world's hottest consumer markets. Retrieved from http://www.deloitte.com/assets/Dcom-Global/Local%20Assets/Documents/China%20and%20India_July%202007.pdf

11.

Delong

Koh

Nelson

Ingyoldstad

(1998). Jeans: A comparison of perceptions of meaning in Korea and the United States. Clothing and Textiles Research Journal, 16, 116–225.

12.

E-Land. (2012). Fashion business overview. Retrieved from http://en.eland.com/fashion/fashion01.html

13.

Ger

Belk

R. W.

Lascu

D.-N.

(1993). The development of consumer desire in marketizing and developing economies: The cases of Romania and Turkey. In McAlister

Rothschild

M. L.

(Eds.), Advances in consumer research (pp. 102–107). Provo, UT: Association for Consumer Research.

14.

Gereffi

(1994). The organization of buyer-driven global commodity chains: How U.S. retailers shape overseas production networks. In Gereffi

Korzeniewicz

(Eds.), Commodity chains and global capitalism (pp.96–122). Westport, CT: Greenwood Press.

15.

Gereffi

(1999). International trade and industrial upgrading in the apparel commodity chain. Journal of International Economics, 48, 37–70.

16.

Gereffi

Tam

(1998). Industrial upgrading through organizational chains: Dynamics of rent, learning, and mobility in the global economy. Paper presented at the 93rd Annual Meeting of the American Sociological Association, San Francisco, CA.

17.

Ha-Brookshire

J. E.

Lee

(2010). Korean apparel manufacturing industry: Exploration from the industry life cycle perspective. Clothing and Textiles Research Journal, 28, 279–294.

18.

Handsome. (2012). The leader of fashion world. Retrieved from http://www.handsome.co.kr/main.html.

19.

Hasan

Issar

Ojha

Singh

B. P.

(2006, November 6). Indian retail: The Indian retail bazaar. Brand Strategy, p.36.

20.

Hwang

S.-J.

Jung

C.-J.

(1993). An exploratory study on apparel distribution system and its countermeasure in the view of market liberalization. Journal of the Korean Society of Clothing and Textiles, 17, 265–279.

21.

Jean

(2012, May 3). Exploring overseas fashion market with global business strategy. Sisa today. Retrieved from http://www.sisatoday.co.kr/board/today.php?board=today2&code=read&uid=13671&page=6&key=&key_1=

22.

Jin

Moon

H.-C.

(2006). The diamond approach to the competitiveness of Korea’s apparel industry: Michael porter and beyond. Journal of Fashion Marketing and Management, 10, 195–208.

23.

Jung

B. O.

(2005). The study for the effective management of overseas imported brands. (Unpublished master’s thesis). Yonsei University, Seoul, Korea.

24.

Kamath

(2010, March 5). Indian terrain to tee off on its own; to associate with golf. Business line—The Hindu. Retrieved from http://www.thehindubusinessline.com/todays-paper/tp-marketing/article985708.ece.

25.

Kang

J. H.

Jin

(2007). Determinants of the born global firm growth in apparel industry: Korean case. Journal of the Textile Institute, 98, 137–145.

26.

Kasahara

(2004, April). The flying geese paradigm: A critical study of its application to East Asian regional development, United Nations conference on trade and development (Paper No. 169). Retrieved from http://www.unctad.org/en/docs/osgdp20043_en.pdf.

27.

Kavilanz

P. B.

(2007, May 1). Be Indian, buy American. CNNMoney.com. Retrieved from http://money.cnn.com/2007/04/30/news/international/India_usbrands/index.htm.

28.

Kim

(1999). A study on improving measures private brand clothing products in domestic department stores. (Unpublished Master’s thesis). Seoul Women’s University, Seoul, Korea.

29.

Korea Federation of Textile Industries. (2012). History of Korean apparel industry. Retrieved from http://www.kofoti.or.kr/Info/Fiber_history.php.

30.

Kottak

C. P.

(1990). Prime-time society: An anthropological analysis of television and culture. Belmont, CA: Woodsworth.

31.

Kumar

Lee

H. J.

Kim

Y. K.

(2009). Indian consumers’ purchase intention toward a United States versus local brand. Journal of Business Research, 62, 521–527.

32.

Kwan

C. H.

(2002). The rise of China and Asia's flying-geese pattern of economic development: An empirical analysis based on US import statistics (Paper No. 52). Tokyo: Normura Research Institute (NRI).

33.

Lee

(2012, June). Secrets of Korean brands' success in China. Fashion Channel, Retrieved from http://www.fashionchannel.co.kr/main09/bbs.php?table=papernews&query=view&uid=5120

34.

Lincoln

Thomassen

(2009). Private label: Turning the retail brand threat into your biggest opportunity. London, England: Kogan Page.

35.

Mid-priced apparel is struggling. (1991, November 22). Maeil Daily Economic News, p. 7.

36.

Min

Song

Yoo

Yoon

Lee

Han

(1986). A study on the present situation of importing famous foreign brands for women’s ready-to-wear in Korea. Journal College of Home Economics Yonsei University, 19, 26–28.

37.

Muralidharan

(2009, September 1). The growth of private labels. Retrieved from http://dare.co.in/opportunities/retail-franchising/the-growth-of-private-labels.htm.

38.

Pantaloon retail India. (2012). Retrieved from http://www.pantaloonretail.in/.

39.

Park

(1990, August 27). Apparel exporters turning to domestic market. The Kyunghyang Shinmun, p. 17.

40.

Parkland. (2012). The company history. Retrieved from http://www.parkland.co.kr/company2007/01_company/company03.asp

41.

Raymond Group. (2012). Retrieved from http://www.raymondindia.com/

42.

Rostow

W. W.

(1960). The stages of economic growth: A non-communist manifesto. Cambridge, England: Cambridge Press University.

43.

Shopper’s Stop. (2012). Retrieved from http://corporate.shoppersstop.com/corporate/history.aspx.

44.

Singleton

(1997). The world textile industry. London, England: Routlege.

45.

Son

(2007). Indian consumer purchase behavior of foreign brand jeans. (Unpublished master’s thesis). Oklahoma State University, Stillwater, OK.

46.

Tewari

(2005). Post-MFA adjustments in India's textile and apparel industry: Emerging issues and trends. Working Paper No. 167. New Delhi, India: Indian Council for Research on International Economic Relations.

47.

Tewari

(2008). Varieties of global integration: Navigating institutional legacies and global networks in India’s garment industry. Competition & Change, 12, 49–67.

48.

The status of internationalization of Korea apparel companies (2007, May 28). Apparel News, p. 18.

49.

Toyne

Arpan

J. S.

Barnett

A. H.

Ricks

D. A.

Shimp

T. A.

(1984). The global textile industry. London, England: George Allen & Unwin.

50.

Trent, Ltd. (2012). Company profile. Retrieved from http://www.indiainfoline.com/Markets/Company/Background/Company-Profile/Trent-Ltd/500251.

51.

Willis

(2006). To adopt or to standardise: Testing Asian views about purchasing western luxury products in seven Asian locations. Journal of East-West Business, 12, 65–94.