Shapewear and swimwear from Colombia. Tailored intelligence - Spain. Rupa Ganguli & Bart Slob

Shapewear and swimwear from Colombia Tailored intelligence - Spain Rupa Ganguli & Bart Slob May 2017 1

Table of contents Table of contents 2 List of tables 3 4 Spain 4 4.1 Introduction 4 4.1.1 Background 4 4.1.2 Who is the Spanish consumer? 4 4.1.3 Where does the Spanish target consumer live and shop? 6 4.1.4 What are key trade channels for shapewear and swimwear in Spain? 7 4.2 Market analysis 8 4.2.1 Market structure 11 4.2.2 Size 13 4.2.3 Design 15 4.2.4 Materials 18 4.3 Buyer and market requirements 19 4.3.1 Types of buyers 20 4.3.2 Types of requirements 22 4.4 Doing business 26 4.4.1 Number of collections and buying patterns 26 4.4.2 Buying channels 28 4.4.3 Payment, quantities, contracts and delivery terms 31 4.4.4 Key marketing tips to enter the Spanish market 34 4.4.5 Some market entry points 35 4.4.6 Competitiveness 36 4.4.7 Business culture 37 ANNEX 8: Trade contacts 40 France 40 Germany 40 Italy 51 Spain 52 UK 52 Bibliography and references 54 2

List of tables Table 4-1: Comparison of consumer preferences across demographics in Spain... 4 Table 4-2: Some key local players in distance selling... 8 Table 4-3: Sizing in Spain... 14 Table 4-4: Buying and delivery timelines... 27 Table 4-5: Checklist for trade offer... 32 3

4 Spain 4.1 Introduction 4.1.1 Background The retail sector has grown over the years and is structured and established. There are several Spanish fashion brands known globally such as Zara (along with other brands from the Inditex Group), Mango, Cortefiel group, El Corte Inglés, Desigual. The Spanish customer is highly price conscious and while the overall economy is recovering after several years of economic downturn, customers tend to go after the lowest price. As a result discount retailers are gaining momentum. With the increase in football and other sporting activities, sportswear is a growing segment across Spain. According to Cushman and Wakefield s recent report on global cities, 1 the Spanish retail market is quite evenly spread between high streets and shopping centres with retail parks gaining in importance. Several international brands have been entering the Spanish market as part of their international growth strategy. The turnover of total retail trade is about 200 billion and accounts for about 15% of the GDP 2 Swimwear has been one of the most popular segments for retail along with Sportswear in the Spanish market. Along with womenswear, menswear is a growing trend as men start becoming more interested in appearances and demand choices. 4.1.2 Who is the Spanish consumer? The Spanish population can be characterised in the following manner by relating it to key consumer types (2016 est.) 3 : Young fashion consumers (15 24) 9.56% (male 2,400,188/female 2,243,311) Office goers/professionals (25 54) 45.24% (male 11,200,786/female 10,771,652) Slightly older professionals (55 64) 11.91% (male 2,820,933/female 2,963,050) Mature older market (65+) 17.85% (male 3,700,832/female 4,969,749) (2016 est.) Table 4-1: Comparison of consumer preferences across demographics in Spain Young Office goers / Slightly older Mature 1 Cushman & Wakefield Inc. (2016b) Cushman & Wakefield s global cities retail guide an ever-evolving tool for global retail and F&B operators. Available at: http://cwglobalretailguide.com (Accessed: 4 November 2016). 2 Banco Santander (2016) Distributing a product in Spain - distributing a product - Santandertrade.Com. Available at: https://en.portal.santandertrade.com/analyse-markets/germany/distributing-a-product (Accessed: 4 November 2016). 3 Central Intelligence Agency (no date) The World Factbook. Available at: https://www.cia.gov/library/publications/the-world-factbook/geos/sp.html (Accessed: 13 November 2016). 4

fashion consumers (15 24) professionals (25 54) professionals (54 64) market (65+) 1. Price +++ +++ +++ +++ 2. Style / fashion trends +++ ++ ++ + 3. Brand loyalty - - - - + 4. Vanity buy - - - - - - 5. Social media savvy +++ +++ + - 6. Internet savvy +++ +++ + - 7. Likely to buy online +++ +++ - - 8. Influenced by ++ ++ + - celebrity/ media /peer groups 9. Importance to + + ++ ++ comfort 10. Importance of quality + + ++ ++ (+++: very high, ++ high, + medium, - Low, -- very low, - - - not at all) Female consumers in each of these categories have different needs and will use shapewear, swimwear and lingerie in a different manner. The biggest segment is that of the 25 54 year olds followed by the 65+ year olds. Younger consumers have little or no brand loyalty and price is the key-determining factor. There is an affinity towards Spanish brands and Spanish products. Some of the key established local fashion labels and retailers in Spain include: El Corte Inglés, Inditex Group (Zara, Bershka, Pull & Bear, Massimo Dutti, etc.), Cortefiel group (Cortefiel, Women Secret, Springfield, Pedro del Hierro, etc), Desigual, Mango, Blanco, Decimas. Over the years, Spanish consumers have become more and more Internet savvy. E- commerce is developing rapidly in Spain. A recent study by Santandar Trade 4 38% of Internet users buy online, which means 17 million e-buyers for a turnover of 3 billion Euros. As seen in the table, the majority of the consumer base is price oriented while being Internet savvy and attracted to styling and design. The majority of Spanish consumers would like to be more keen on the style element, but given the years of economic downturn, they have learnt to be more price conscious and are more likely to first determine the price segment and then pick the best designing / style they can find in that tier. 4 Banco Santander (2016a) Distributing a product in Spain - distributing a product - Santandertrade.Com. Available at: https://en.portal.santandertrade.com/analyse-markets/spain/distributing-a-product (Accessed: 15 November 2016). 5

4.1.3 Where does the Spanish target consumer live and shop? Key cities in Spain for retail in fashion include: Madrid and Barcelona but also Bilbao, Seville, Valencia and Malaga. Especially for swimwear, as Spain offers one of the most amazing coastlines in the world, this is a very popular category. Tourists are spoilt for choice when choosing a holiday destination with amazing offers from a well-developed tourism industry. In Spain, many specialist stores for swimwear and beachwear, both online and offline offer styles and options. Barcelona is one of the biggest retail locations and most visited by shoppers looking for stylish fashion in Spain. Barcelona Barcelona is Spain s 2nd largest city and one the most important from a retail industry perspective. With a population of 5.5 million, it has a strong economic centre and one of the key container ports in Europe as well as a prominent cruise ship terminal. It has been ranked (acc. The report from Cushman & Wakefield) as the 10th most visited city in the world. The principal shopping location is around the Plaza de Catalunya. Home to many Spanish brands as well as international retailers, Barcelona is a fashion-conscious city that caters for both tourists and local shoppers. Major retailers in Barcelona include: Zara, H&M, Desigual, Adidas, Nike, Chanel, Gucci, Louis Vuitton, Burberry, Dolce & Gabana, Pull & Bear, Massimo Dutti, Intimissisimi, Bershka, Mango, Apple, El Corte Ingles and Replay. As discussed and surveyed in the report, some of the key areas of importance include: Portal de l'àngel which is claimed to be Barcelona's and Spain s most expensive retail street. Some of the key names present include: El Corte Ingles, the majority of Grupo Inditex brands, H&M, Benetton and Cortefiel. Passeig de Gràcia is one of the most prestigious streets with two of the Gaudi5 buildings (La Pedrera & Casa Batllo) Portaferrissa, is located in the Gothic Quarter and is a pedestrian street. It has mainly young/ mass market consumers with brands such as H&M, Mango, Footlocker, etc. It is close to the famous Las Ramblas. Les Rambles, a long street, is the most popular street in Barcelona which links the Barcelona harbor with Placa Catalunya. Plaça Catalunya with Barcelona harbour. Some of the key retailers present include Desigual, H&M, Mango, Nike. There are also quite often street vendors and pop up activities which take place on this long 5 Gaudi: http://whc.unesco.org/en/list/320 6

street Pelai, a street more frequented by local shoppers has retail chains such as brands from Inditex, C&A etc Rambla Catalunya is a long tree lined street which offers mid high level shopping and has restaurants Avinguda Diagonal is a strategic street as it divides the city into east and west. Several high street retailers have a presence on this street. 4.1.4 What are key trade channels for shapewear and swimwear in Spain? Spanish distribution is mainly structured as: The Spanish retail sector is quite mature and structured. It is mainly made up of: - Hypermarkets, supermarkets and superettes which are located mainly in the city outskirts, - Specialized superstores which focus on a specific product category or categories such as wedding, culture, sports, etc - Departmental stores which are found in the city centres. - shopping centres which are mainly in the city centre or just on the outskirt - Retail traders and independent stores (food and non-food) which are known for their specialisation and quality - e commerce/ online stores which are beginning to grow rapidly in the fashion industry especially Some key local players in distance selling 6 According to a recent (2016) report by Statista 7 revenues for Spain in the ecommerce market amounted to US$15,470m. Revenue is expected to show an annual growth rate (CAGR 2016-2021) of 10.5% resulting in a market volume of US$25,456m in 2021. The market's largest segment is "Fashion" with a market volume of US$5,905m in 2016. User penetration is at 57.3 % in 2016 and is expected to hit 73.0% in 2021. The average revenue per user (ARPU) currently amounts to US$686.64. Other than e commerce (which is relatively more recent), direct market channels include mobile marketing (recent) and telemarketing. However due to lower connections speeds in Spain (internet), fewer online shops and the risks of credit card fraud make Spanish consumers still a bit hesitant to buy online. This is however expected to change and is 6 Banco Santander (2016) Distributing a product in Spain - distributing a product - Santandertrade.Com. Available at: https://en.portal.santandertrade.com/analyse-markets/spain/distributing-a-product (Accessed: 15 November 2016). 7 Statista and Bank, W. (2016) E-commerce - Spain Statista market forecast. Available at: https://www.statista.com/outlook/243/153/e-commerce/spain (Accessed: 15 November 2016). 7

changing rapidly. Some of the local / longer term distance-selling players in the market: Table 4-2: Some key local players in distance selling La Redoute Catálogo mail order selling, e- commerce ready-to-wear clothes, home and decoration, hifi-tv El Corte Ingles E-commerce ready-to-wear garments, home appliances, hifi-tv, entertainment, travel, house and food Venca mail order selling, e- commerce ready-to-wear, beauty products, household linen, decoration 4.2 Market analysis Key message by consumer in Spanish market: Price is important but unique and interesting products are most interesting within the price segment. 4.2.1 Exports from Colombia Shapewear does not have a specific code in the HS coding system. It is included mainly in categories 6212 and 6115, sometimes depending on the type of shapewear, especially if it is an activewear / yogawear product, this could also be categorised together with tights and stockings. So, it is still a challenge to assess exactly how much trade is taking place in these specific categories. The graphs below show the import data for each product HS code and are grouped under the headings Swimwear / Shapewear. The data shows how the product category is doing across the key countries. All data concerns the value of exports, in Euros, as reported to the trade statistics database. 8 4.2.1.1 Shapewear 8 EU trade statistics online: http://exporthelp.europa.eu/ (last viewed on 8/5/2017). 8

HS 6208 exports from Colombia to selected EU countries 35.000 30.000 25.000 20.000 15.000 10.000 5.000 0 France Germany Italy Spain United Kingdom 2014 2015 2016 HS 6212 exports from Colombia to selected EU countries 1.600.000 1.400.000 1.200.000 1.000.000 800.000 600.000 400.000 200.000 0 France Germany Italy Spain United Kingdom 2014 2015 2016 HS 6115 exports from Colombia to selected EU countries 50.000 40.000 30.000 20.000 10.000 0 France Germany Italy Spain United Kingdom 2014 2015 2016 9

300.000 HS 6108 exports from Colombia to selected EU countries 250.000 200.000 150.000 100.000 50.000 0 France Germany Italy Spain United Kingdom 2014 2015 2016 4.2.1.2 Swimwear 600.000 HS 6112 exports from Colombia to selected EU countries 500.000 400.000 300.000 200.000 100.000 0 France Germany Italy Spain United Kingdom 2014 2015 2016 10

500.000 HS 6211 exports from Colombia to selected EU countries 400.000 300.000 200.000 100.000 0 France Germany Italy Spain United Kingdom 2014 2015 2016 4.2.2 Market structure The Spanish lingerie market has not seen significant growth in 2015, however the swimwear market has on the other hand been one of the highest growing segments. Shapewear has been stable, but several retailers / independent stores are keen to expand their offer. This provides an interesting opportunity for Colombian brands. Type 1: Lingerie players are naturally adding on a shapewear line as a new product offer or are merging existing lingerie offers with a shapewear piece included in the collection. A few lingerie players have been seen to move directly into the active sportswear area, however sports bras are the natural link to active sportswear. Eg. Intimissimi and Triumph who have had shapewear in some format as an offer already. Type 2: Swimwear brands are offering shapewear as part of the slimming swimwear product option Type 3: Active wear players are beginning to introduce pieces which have shapewear included (outerwear). There is also a movement towards introducing nicer looking sports bras and underwear for sportswear. Sportswear players had a swimwear offer in most cases but this doesn t seem to have evolved as much. Type 4: A lot of the shapewear offers are from existing high street private label brands such as H&M, Oysho, Zara, but also Spanish etc 11

Type 2: Swimwear Type 3: Active Sportswear Type1: Lingerie Type 4: Shapewear 4.2.2.1 Shapewear According to Mintel s report Spain s lingerie sector has not seen significant percentage of shapewear as an offer. However a recent Euromonitor International report (2016) states: The majority of apparel brands in Spain are introducing some element of shapewear into their womenswear ranges. Inditex brands such as Zara and Bershka along with Benetton and Kiabi are focusing on introducing shapewear in a subtler manner by integrating them into leggings and jeans. Shapewear underwear is also offered by Women secret, Oysho, H&M, Intimissimi, Triumph and Janira, all of which have dedicated shapewear sections within their stores. However there appears to be a mismatch in the target audience based on where the brands stock their shapewear products. For eg. Brands such as Triumph and Womens Secret which are present in the El Corte Ingles department store do not attract shapewear consumers as they are often not seen as the key brands for shapewear. They are seen more for lingerie by younger consumers. The concept of shapewear and the idea of shapewear is still a larger or bigger consumer concept that is worn by older women in most of Spain. It has not yet gained glamour or an everyday item status amongst the younger consumer group. Also, brands such as Women s Secret and Oysho, which are considered brands targeting a younger consumer, are not the go to places for older consumers potentially looking for shapewear as they do not believe that these stores would stock bigger sizes. So this 12

strange situation has meant, that the shapewear segment in the Spanish market is not fully developed and matured in its concept and offer (or the visibility of offer) considerably as yet. Intima s partner lingerie magazine in Spain, Cyl, interviewed 60 boutiques from across the country and provided the following bestselling brands: Corsetry: Selmark followed by Lise Charmel and then Antigel Nightwear / loungewear: Senoretta followed by Egatex and Mas- sana Legwear: Janira followed by Filodoro and Wolford Shapewear: Janira followed by Anita Maternity: Anita followed by Leonisa 4.2.2.2 Swimwear Swimwear (and beachwear) is one of the biggest segments and the leading sector for sales along with sportwear in Spain. Euromonitor s report says: Women s swimwear remains popular in Spain thanks to warm and sunny weather which prevails across much of the country for most of the year, not to mention the 67 million inbound tourist arrivals in Spain in 2015, much of whom were leisure tourists on beach holidays. In 2015, women s swimwear registered 2% volume and current value growth as companies such as Calzedonia remained particularly popular among consumers who are looking for new trends, designs and fabrics and who are willing to pay more for attractive swimwear which is different from what was on offer in the previous year s collection. Some key characteristics of swimwear based on growing demand in Spain: price, design, fabric, comfort, softness, Stretch, Body control, body-shaping. With more options and better designing in swimwear, (including the added shapewear elements), demand for good swimwear is and will continue to rise in coming years. According the same survey carried out by Cyl Magazine, (mentioned above), all the stores they interviewed carried Swimwear as a product category. 20% of them said that the category had been selling better, 23% said well and 15% said very well as compared to the year before. It was the leading product category for all the independent stores interviewed (60 from across Spain). The brand Maryan Mehlhorn came up as the best selling brand, Mare in second and another Spanish brand Ory in third place. El Corte Inglés is the most mentioned distanceselling store. 4.2.3 Size Numbering in European sizes can be misleading. Italian and French body sizes are generally smaller than German body sizes but the numbering systems have evolved 13

differently in the different countries. UK sizing is for example completely different but does not match the US size charts either. US 4-6 = UK 8-10 = German 34 36 = French/Spanish 36 38 =Italian 40 42. Sometimes depending on the brand, a US 2-4 is cut big enough to be a UK 8-10 The chart below from provides a good example of the sizing. Below you have a table with the key bra sizes (useful for swimwear and some shapewear styles) as well as basic womenswear clothing size conversions. Spanish sizing is different from German and Italian sizing and totally different from UK and US sizing. So it can be quite misleading especially for different European countries unless the number is accompanied by which country it relates. As a 36 in Spain is different from a 36 in Italy. Table 4-3: Sizing in Spain 9 Colombian brands could create their own size chart, which explains their sizes in relation to existing target market sizes. 4.2.3.1 Shapewear Shapewear is still a relatively new category in Spain (although most traditional lingerie brands have been offering this for years already). The majority of younger consumers do not consider buying shapewear as an attractive product category. They may make the occasional purchase for an event or occasion to wear under a dress. However it has not gained the type of everyday status that it enjoys in other European countries such as the 9 Metropolitan (2016) How do Spanish clothing sizes work? Available at: http://www.barcelonametropolitan.com/practical/settling-in_1/how-do-spanish-clothing-sizes-work/ (Accessed: 15 November 2016). 14

UK or Germany. Spanish consumers of shapewear are generally older consumers (more mature consumers) and would need slightly bigger sizes and styling to suite their age and requirements. Younger consumers are interested in using shapewear but only when it appears not as a separate product. If it were integrated into existing everyday items, it would definitely be popular and be bought. The strategy followed by the brands such as H&M, Zara and others that have been introducing it into existing products, is more attractive for the younger consumer segment. They will quite often pick a pair of tights / leggings/ stockings with a control tummy or control thighs as compared to buying another piece to wear below that. So the sizing for the integrated shapes and styles could be as the brands offer regular sizing with the detail suggesting that it has a shaping component. Exercise and fitness products with some amount of shapewear integrated is also an attractive option for the younger Spanish consumer. These are mainly younger consumers using smaller sizes. 4.2.3.2 Swimwear Swimwear is a product segment for all in Spain. As a result the sizing must be focused on the style. The style should be for a target segment and sizes offered for that style should match that segment. For eg. Triangle cut bikini tops and string bikini bottoms would be more likely to be bought by the younger fit consumer. As a result the sizes for this style should be geared to smaller sizes as compared to making really large sizes in this style. Similarly if there is a one-piece swimsuit which a shaping element, and balconette bust styling then it is likely that there will be an older consumer who could be targeted. As a result the sizes should be geared for use by this segment of population. Swimwear as a segment in Spain has something for everyone. As a result, the Colombian brand needs to look at the styling, fabric, cut and colours to assess which target consumer the style is for. The same brand may have different size spectrums for different styles based on different body types targeted. It should also be noted, that Swimwear in Spain is not purchased only by Spanish consumers but in fact is purchased largely by tourists as well. It is almost impossible to make swimwear suitable for every body shape and every type of tourist. SO the brand needs to assess its own USP and see where it could fit best. 4.2.4 Design 4.2.4.1 Shapewear For the purposes of this study, and to complement existing information, shapewear is discussed under two main types for the Spanish market. 15

1) Shapewear as a separate innerwear product Shapewear in Spain is seen still mostly as an older woman s product category. This fits with the market segment that is ageing and can be targeted (this is 55 65 + yr old) however for the younger category, which is the biggest category (25 54 yr old) this does not have much appeal. While visibility and branding by leading brands is focussing on creating this segment for the younger population, the current situation shows that younger women are keen to use shaping products which are integrated into their existing clothing categories such as dresses which have a flattering tummy flattening aspect, or tights / stockings / leggings which have a tummy or bottom shaping aspect, or a camisole / top which has a bust lifting aspect. However what they are not very keen on is wearing another layer such as shapewear. This is also determined and driven to some extent due to the warm weather conditions for most of the year in Spain. Conventional shapewear tends to be tight and makes the wearer sweat. This is very uncomfortable in a warm climate where it is also more difficult to wear the shapewear item as it tends to stick to the skin while trying to wear it. With all the new technology developments in fibres as launched by the leading elastane makers such as Lycra (From Invista) and Creora from Hyosung, these issues could be reduced, and using technologically advanced fibres is the way to attract Spanish younger customers to use these products. The older category of customers is keen on shapewear as it makes them look fitter and slimmer and the dresses / clothing they wear tends to look smoother. The type of designs they would be keen on are more conservative such as high waisted panties, waist clinchers, bust lifters and bottom lifters / enhancers. But they would be more interested in subtle and easy to use products as compared to complex designs, which require bending and sitting and stretching to get the product on. So for the current shapewear segment in Spain, the key focus is the older age segment and the focus is on comfort but also firm control and easy washing and wearing. Price is always important for the Spanish customer, so this should be taken into account. For the younger consumer, a more advanced form of shapewear is needed which is appealing (like lingerie) or it needs to be adapted to be integrated into other products. 2) Shapewear as an integrated item of everyday wear / sportswear As mentioned above, the younger segment is keen on wearing a shaping product, which is not a shapewear item necessarily. They are keen on wearing clothing which has an element integrated into the product itself. In addition, wearing sportswear and activewear as well as swimwear for sport, which has, shapewear integrated is an option. So for the younger consumer the shapewear product has to be an outerwear as compared to the 16

conventional innerwear shapewear product. This is a growing trend and the design and sizing would be for smaller / medium sizes. A good place to see this trend and type of designs is in the stores or online on the brand sites who are offering this type of product such as H&M, Zara, Oyosho, Mango, Benetton, etc. Clothing for active swimwear and active gym / sportswear for women is beginning to become more and more stylish and fashionable. This is a place for shapewear to grow in the Spanish market. Bright colours, trendy prints and innovative styling for sports bras and tights / leggings and other such products should provide inspiration to Colombian brands if they are keen to design and create outerwear shapewear products. 4.2.4.2 Swimwear Just-style s report 10 Global market review of swimwear forecasts 2019 suggests a break up of categories in swimwear and says that depending on motive of the consumer, different retail locations and types of price points, will dictate consumer buying options. For the purposes of this report, swimwear consumer is categorised into the following three key types: 1) Performance driven (serious about doing sports) These consumers are likely to rely on known sporting brands. While the Spanish consumer is most often looking for a good bargain, professional sporting consumers give the highest importance to functionality and type of fabric as well as the resistance of fabric to UV / chlorine. This becomes the most important as compared to the fashion element. However these days, one does not need to necessarily compromise design and style for functionality. Some of the key sports brands and activewear brands are coming up with very well designed and styled professional swimwear. Some important brands in this category 11 : Speedo, Tyr and Arena mainly. Consumers will pay the price and remain less likely to experiment with many new brands. 2) Function driven (for sporting but not high performance and serious training) These consumers could be inclined to new brands from Colombia. However they may also simply look into high street stores and brands and those available on the most viewed distance selling / online sites. Many of these sites dictate what consumers finally purchase purely due to the visibility and ease of purchase aspect. Consumers in this category would give importance to how the swimwear would wash and wear on a regular 10 Newbery, M. (2015) Global market review of swimwear forecasts to 2019. Available at: 2015_aroq_global_market_review_swimwear_single.pdf (Accessed: 6 November 2016). 11 Newbery, M. (2015) Global market review of swimwear forecasts to 2019. Available at: 2015_aroq_global_market_review_swimwear_single.pdf (Accessed: 6 November 2016). 17

basis. Ethical swimwear fashion is beginning to rise in this segment. Weekend sporting is becoming a trend, and Spain with its long coastline offers a lot of opportunities for everyday and weekend sporting even for locals. Colombian brands can tap into this local market in which consumers are of all ages and all shapes and sizes. Due to the frequent usage of beachwear, the Spanish consumer is likely to have several swimwear items per head. In addition, with the large inflow of tourists through the year, there is always a need for swimwear. As a result, offering functional (good fabrics) and UV resistance, soft and good quality swimwear has and will continue to have a demand across the country. One of the growing areas is men swimwear which is an under catered to market. 3) Beach / leisure / fashion wear consumer This is the key segment of consumers most likely to experiment with new brands. While the luxury market client / consumer will still stick to the most prominent celebrity / designer lines, the larger group of consumers in this segment could be wooed into looking at Colombian brands via good websites, aspirational images, well taken photos and lifestyle shots and ease of access. Consumers in this category would be more keen on the look and design feature on the product as compared to the functionality. This type of swimwear may never even enter the water or only just for a short time, with the majority of the time being spent on the beach or in a resort / sun location (which there is plenty of across Spain). Ethical swimwear made from recycled yarns and specific stories which are featured in the press have a big influence on the customer in this segment. This segment of consumers may not necessarily be only Spanish, but may be made up of the large number of tourists coming into Spain each year through the year. Designs should be interesting from both, a print / colourway and a pattern perspective. It is a good idea to follow some of the trend and theme options provided for the European market. Lining materials when used must be in line with the overall design. Lining cannot be thought of as just a complementary element but infact as part of the overall stype and design. 4.2.5 Materials 4.2.5.1 Shapewear As mentioned earlier, only older Spanish consumers are keen on shapewear as a core category. In this segment, the types of brands present offer high quality fabrics, which are mostly polyamide, elastane and nylon. With the latest fibre developments, there are more options from established brands. High quality materials at affordable price points, is the key focus for shapewear materials. Some of the key fibre developments, which have an impact on materials used in shapewear products are provided below. It should be noted that as fibres and fabrics evolve such as the fibres developed by Hyosung such as creora Color+ and creora Black (dyeable elastane for deeper colours 18

without grin through), MIPAN Aqua X (cool touch and moisture management nylon) and MIPAN super micro denier nylon for soft sensual fabrics will see themselves being used in the materials offered for shapewear. These were launched at Mode City in June 2016. The focus on soft and sensual fabrics is growing across the segment as compared to the stiff hard fabric. Lycra from Invista has also recently launched its LYCRA BLACK technology which offers, acc to Lycra: Virtual elimination of unwanted elastane grin-though, Improved colorfastness in dark shades and Excellent uniformity. This fibre is being promoted for fashion swimwear, athleisure wear, lingerie, shapewear, amongst others.. 4.2.5.2 Swimwear Materials for swimwear are varied. Depending on the segment of swimwear and target consumer, materials could be highly technically performance and function oriented such as Invista s or Hyosung s new product innovations. Invista which produces Lycra has also come up with a new development for performance and fashion swim wear called LYCRA lastingfit technology. This claims to provide long-lasting fit in chlorinated water environments: up to 10 times longer than fabrics made with unprotected elastane. LYCRA lastingfit technology also gives durable protection against the degradation that can result from sunscreen, pool water, heat and body oils. However recycled polyesters and other recycled fibres and innovative fibres are becoming the way forward for leisurewear and fashionable swimwear. Shaping elements can be introduced and this will have an impact on the pattern and type of material being integrated into the swimwear fabric / garment. Resistance to sunlight, salt and chlorine are obvious areas of importance for swimwear of all types. 4.3 Buyer and market requirements This part focuses on key expectations and specific requirements of buyers. Buyers for the purposes of this report are divided into two main types: Direct buyers (end consumers) Indirect trade buyers (agents / distributors / boutiques / retailers) In terms of market entry requirements, this is classified into the following two categories: Legislative (or mandatory requirements) Voluntary or requested requirements (not a legal requirement but the particular buyer may want it as a requirement) 19

4.3.1 Types of buyers Shapewear and Swimwear have similar buyers and requirements. As a result they are mentioned as a common feature here rather than being repeated. Where relevant specific emphasis and focus is provided on shapewear or swimwear as relevant. Direct Buyers (the end consumer) This type of buyer has not been discussed as a potential market opportunity directly for new foreign brands in the past, as reaching the end consumer was not easily possible for a foreign brand trying to enter the European market. However this has changed and continues to change with the evolution of e commerce and online sales as well as sales via social media. So what does this direct buyer (end consumer) expect when she (or in some cases he) wants to buy a shapewear product? Or a swimwear product? It should be noted that consumers by definition are diverse and even in the same country; there can be several differences between economic segments, demographic segments and geographical segments. As discussed earlier in the chapter table 4-1 already provides an overview of the end consumer s general preferences based on demographics. This end consumer is rarely aware of the full extent of legislative and non-legislative requirements. However with the ongoing discussion and focus on worker rights, sustainable supply chains and environmental concerns, more and more end consumers are beginning to understand some of the EU regulations and requirements. This is however less pronounced in Spain compared to some of the other countries such as Germany and UK. Direct buyers in Spain can also be tourists in addition to local consumers. Taking this a step further, shapewear and swimwear buyers are categorised into those who would purchase online / through social media channels and those who would prefer to walk into a store. Online / Internet consumer buyers some key expectations Expect to see an image of the product exactly how it would appear on the body, preferably on a model along with details of the model s sizing and the size she is wearing in the image (to understand how it fits) Expect to be able to purchase immediately with local channels of payment Expect to have a free return policy Expect to have a dedicated customer service line (preferably online via email and chat as well as by phone) 20

Expect to see the product details and the fabric details including specific tips on what and how the piece helps Expects to see the site and all details in Spanish (and possibly English) Expects the customer service to be in Spanish and English Expects to see colour options and size options with details of size Expects to see a catalogue (of potential collection if this is part of a collection which is assumed) Expects to have price offers and discounts and sales Would like to have the possibility to provide feedback Some customers like to put up images and use social media to discuss and show the piece they bought Expects to receive the product well packaged with care instructions Expects free shipping (within the country at least. and in some cases in EU) Expects to see clear policies of the brand while buying it Would like to see any labels or certifications the brand and product have (this will help market the product better as well) Expects the sizing of a specific brand to remain consistent (eg. Size S should always fit like an S and not change) For swimwear and shapewear, given the technological advances in fabrics and developments, it would be useful to provide this information if a specific type of technologically advanced fibre is used and its benefits. In store consumer buyers some key expectations Expect to see how the product could be used (image of a before and after use on the packaging for eg for shapewear and an image of the swimwear on the model) Expect to find it easily in the lingerie, tights or innerwear section for shapewear and sportswear section or holiday section for swimwear Be offered the product or find the product in a place with complementary products (eg. Buying dresses or swimwear or athletic wear). With swim accessories for swimwear or together with sportswear products Expect to see the range of sizes and be able to easily find the size and what it means. Have the possibility to try it on (depending on hygiene standards and accepted norms such as having hygiene strips such as in swimwear and certain types of shapewear) Ideally have a sales assistant who can present the product and offer information specific to the piece and the brand Expect to have a return policy (depending on hygiene standards and accepted norms) Be told / see the branding from Colombia and understand why its special (so have good marketing campaign alongside) 21

See the website of the brand on the packaging (so as to be able to quickly use the smart phone to check) Expect to see labelling and standard care instructions clearly as well as information on where to reach customer service in case of any complaints or feedback / comments Expect to see a range of products and a collection with different silhouettes and styles rather than simply one type with clear details on which part of the body it helps most for shapewear and mix / match options for eg for swimwear See clearly whether it is a low, moderate or firm shapewear (written on the packaging) and have details if the swimwear has any elements of shapewear included Expect to see the information and details in Spanish always but also in English if possible as there are many expats and tourists in Spain. Indirect trade buyers (agents / distributors / boutiques / retailers / online stores and catalogue companies) This type of buyer is the person who distributes and offers wholesale trade options. This is particularly interesting for Colombian brands that are interested in developing a strong presence in the Spanish market through distribution channels. However doing this is also relatively more challenging, as distributors are very full with existing known brands in most cases and are hesitant to take on a new unknown brand. This type of buyer focuses on ensuring that the key legislative requirements are already in place and may have on top of that specific voluntary requirements as well. Some of the key requirements are listed below. 4.3.2 Types of requirements Legislative requirements These are common across the 28 EU countries and almost the same for swimwear and shapewear. There are some specific rules and regulations also specific to Germany, Italy, Spain, France and the UK, however the main set of legislative requirements focus on EU wide regulations. The CBI report German Buyer requirements for shapewear (available on the CBI market intelligence platform) provides a clear overview of the key buyer requirements for the German market which is in line with the Spanish market as well. 12 To avoid reproducing all the details from the report, a quick overview is provided here: 12 CBI (2012b) Tailored information product characteristics shapewear colombia germany apparel 2012. Available at: https://www.cbi.eu/sites/default/files/market_information/researches/tailored-informationproduct-characteristics-shapewear-colombia-germany-apparel-2012.pdf (Accessed: 13 November 2016). 22

The CBI product factsheet on Shapewear 13 (Also available on the CBI.eu market intelligence site) provides details on the EU wide legislative requirements very clearly. Colombian brands can also go directly to the EU exporthelp website which provides all the changes and latest information in legislations. The areas that need to be covered under Mandatory requirements relevant to shapewear and swimwear can broadly be classified into: Product Safety By law all products placed in the EU must adhere to product safety regulations and must not pose harm to the user. These rules and regulations are listed in great detail under the General Product Safety Directive in the EU Export Helpdesk 14. This is also found in document The CBI product factsheet on Shapewear mentioned earlier. Chemical content This is a very important point for brands. There is an extensive list of restricted chemicals and dyes that are not allowed under the EU. REACH (Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the Registration, Evaluation, Authorization and Restriction of Chemicals) 15 REACH is the European Community Regulation on Chemicals and their safe use, which deals with registration, evaluation, authorization and restriction of chemical substances. Major requirements of the law that could be related to fastening products are listed below: 1) SVHC (Substances of Very High Concern) 2) European Nickel Restriction (part of Annex XVII) 3) European Azo colorants and Azo dyes Restriction (part of Annex XVII) This is mainly related to the use of of dyes and types of metals. Brands must ensure that their products are not dyed using any of these chemicals and the metal parts used (if any) for trims, clasps, hooks, buttons, zippers etc are in line with and adhere to the regulation. This is also listed in detail in the CBI product factsheet on shapewear and can be found on the EU export helpdesk website at all times. Labelling Labelling needs to be in line with the required legislation per country. (This changes from country to country as explained later). The addition of new textile fibres and new textile compositions are constantly being added and discussed in the EU. The names of textile fibres and how to mention them on labels can be found in great detail on the EU helpdesk 13 CBI (2014) CBI Product Fact Sheet: Shapewear in Europe Available at: https://www.cbi.eu/marketinformation/apparel/shapewear/ 14 http://exporthelp.europa.eu/thdapp/taxes/show2files.htm?dir=/requirements&reporterid1=eu&file1=ehir_eu1 1_05v002/eu/main/req_safeprod_eu_010_0612.htm&reporterLabel1=EU&reporterId2=IT&file2=&reporterLabe l2=italy&label=general+product+safety&languageid=en&status=prod 15 https://echa.europa.eu/regulations/reach/legislation 23

site 16 Specific rules in terms of packaging and labelling is discussed in each country chapter in the report. CITES These mandatory regulations are relevant to products made from (or partially made from) wild animals and plants.while this may not be directly relevant to the Colombian brands for swimwear and shapewear products, it is good to know that there is a Convention on International Trade in Endangered Species (CITES) 17 which can also be read in detail on the EU Helpdesk website. The key point is to be aware and ensure that none of the products fall into the restricted list. Voluntary or non-legislative requirements These can be divided again into environmental and social issues primarily. Environmental Environmental issues go above the legal requirements. These can take the form of specific standards requested or audits and certifications requested by the retailer / agent in question. Some of the these include, the correct form of waste water management and treatement, labelling such as Oeko tex, compliance with the national environmental laws, use of recycled yarns / fibres (if relevant). Certifications to show / suggest the use of organic or recycled materials such as GOTS and GRS 18. A local point of contact in Colombia for OEKO-Tex to understand if and how the products can get the certified: Hohenstein Institute Colombia Cra 15 N. 91-30 Bogotá D.C. Phone +57 316 822 6600 colombia@hohenstein.com www.hohenstein.com The EU wide labelling scheme with the EU Eco label flower is recognised across Europe with. A good website to keep track of these developments is the EU trade site: http://ec.europa.eu/environment/ecolabel/ Social 16 https://ec.europa.eu/growth/sectors/fashion/textiles-clothing/labelling-expert-group_en 17 http://exporthelp.europa.eu/thdapp/taxes/show2files.htm?dir=/requirements&reporterid1=eu&file1=ehir_eu1 4_02v001/eu/main/req_cites_eu_010_0612.htm&reporterLabel1=EU&reporterId2=NL&file2=ehir_nl14_02v 001/nl/main/req_cites_nl_010_0612.htm&reporterLabel2=Nethe 18 http://textileexchange.org/wp-content/uploads/2016/01/global-recycle-standard-v2.1.pdf 24

This is mostly in the form of the adherence to workers rights and labour laws in the country of origin of the product. There could also be a requirement to have certifications such as BSCI, ETI etc. This is to ensure that the brand has taken the manufacturing process into consideration and has been manufacturing in ethically sound locations and factories. Popular certifications used for manufacturers are SA 8000 (Social Accountability 8000 http://www.sa-intl.org ) and BSCI (http://www.bsci-intl.org) in the EU and particularly the adherence to ETI (Ethical Trading Initiative http://www.ethicaltrade.org/about-eti ) in the UK. In addition, there are some initiatives, which are gaining momentum such as Fair Wear Foundation (https://www.fairwear.org) and Fair Trade (http://www.fairtrade.org.uk) All these agencies will need to be contacted directly to request specific information by sending a profile of the Colombian brand. Once the details are sent over email / or via a phone conversation, then the next steps would include what the brand could do if it is interested in participating (or is eligible to participate). Cost for participating in specific certification schemes will differ and can range from 1000 4000 currently per year. It should be noted that the voluntary requirements of buyers in Spain (for independent stores and multibrand outlets) is not as high as that of German, British or French stores. Packaging and labelling for Spain Depending on who your end consumer is, packaging is very important and sometimes almost as important as the product itself. While organising the export documentation, a good way to stay up to date is to check with the freight forwarder or shipping agent e.g. DHL (http://www.dhl.com.co/en.html) or UPS (https://www.ups.com) before organising the shipment. These companies are always aware of the latest changes in any regulation and have developed customer friendly web portals and help desks with in country support for exporters from Colombia to help with the documentation and requirements. Some trade buyers will ask you for very simple product information and then add hangtags and more details themselves. Some retailers who buy inventory may do the same. However, most agents and distributors will ask that the Colombian brand comes with all the required packaging and labelling based on the requirements. It should be noted that there are mandatory and optional requirements. These also vary between EU countries. So Colombian brands that wish to sell in more than one EU country, should ideally organise their labelling and packaging to meet the requirements of all the countries they are targeting. All information required to appear on labels, presentation packages and on the instructions should ideally be in Spanish. In Spain, the core areas which are required and continue to be required are the following: Mandatory for Spain: Fibre content (and the mix if it is a blend of different fibres) Optional for Spain: Size 25

Description of the product (what sort of product to be classified into the appropriate category) Mandatory for Spain: Wash and care instructions label, it must be in Spanish/ multilingual Mandatory for Spain: Name importer It is also good to have (for marketing and brand awareness): Name of the brand / sub brand clearly visible A Made in label (as more and more consumers are asking for transparency and traceability). This is not a requirement by EU legislation. Any consumer brand hangtag which shows the content of a technologically advanced fibre such as Lycra Black for eg. Any hangtag which shows the eco label or specific certification acquired such as the EU Eco-label or OEKO-Tex (See the OEKO-Tex labelling standards) Having an image of the product / specific product details as to which part of the body it helps. Several brands use their packaging to specifically cater and appeal to their target audience. For the Spanish market, packaging should be in line with the taste, which is in general trendy and stylised. Most Colombian swimwear and shapewear brands have attractive photography and packaging. It would be useful to get a graphic design consultant who works in the Spanish market to assess and view how to make the brand more attractive for the Spanish consumer. It is useful to get the opinion of a graphic design consultant with EU experience. Colombian brands are already known and popular in the Spanish market. 4.4 Doing business 4.4.1 Number of collections and buying patterns Direct consumers expect to see changes almost on a continuous monthly basis. This is because of the access through social media and online campaigns etc. As a result, to remain engaged with this set of direct consumers the demands are also higher as they are constantly online and used to being introduced to information. As a result, it is recommended that while collections may be developed twice a year, certain planned campaigns take place on a monthly basis at the minimum. Specific campaigns around festive occasions such as: Christmas, Valentine s day, Mother s Day, International Women s Day, Easter, etc. Having specific campaigns around celebrities is also a good strategy. Having User Generated Content (get users to speak about and post images and text) is also a good strategy while engaging directly with the end consumer. The campaign 26