This study analyzes why and how department stores lost their dominant status in China’s apparel retail industry. It examines the history of the apparel distribution mechanism. The analysis finds that this loss is due to irrationalities in the distribution mechanism that developed to support apparel enterprises’ marketing efforts. Furthermore, the loss also resulted from the strategic changes among apparel enterprises and department stores to cope with these irrationalities. Apparel firms developed diversified channels and weakened the stores’ buying power by introducing multiple brands and getting involved in stores’ capital. Although department stores sought to change their disadvantaged status by reforming their purchasing patterns, they could not expand their scale to address their difficulties. Eventually, department stores ceased to be the main retail channel for apparel, and the value chain changed from being driven by department stores to being driven by apparel enterprises.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.