German Lingerie for China
December 2, 2006
Bruno Banani is an East German success story. Based in Chemnitz, formerly known as Karl-Marx-Stadt, in East Germany, the company was founded in 1993 and is still run by the same two men -- Wolfgang Jassner, an entrepreneur from southern Germany and Klaus Jungnickel, an underwear producer from the East. They now employ over 100 people and in 2006, the firm's profits rose by 11 percent to 55 million euros ($72.4 million).
The company's expensive underwear adorns the bodies of hip Europeans -- now the firm wants to woo the up-and-coming fashionistas of the People's Republic of China.
"Not for everybody," is how this exclusive firm defines its products, which include fragrances, sunglasses, watches and swimwear, as well as women's lingerie and underwear for men.
The expensive brand has already made its mark in the European Union, Russia and South Korea, and the company directors are keen to similarly conquer the Chinese market.
The plan is to open 50 stores over three years in Shanghai, Beijing and other big cities across the country. So far in 2006, 18 stores have opened up and seven more are set to follow next year.
Although the firm's Web site is written not only in German and English but also in Chinese, the company does not intend to tailor its products specifically for the Chinese market nor use Chinese models in its advertising campaigns.
"Young professionals with the necessary cash"
What distinguishes this venture is that Bruno Banani's underwear is produced in Germany and exported to China, arguably the textile factory of the world. It's almost like selling ice to the Eskimos.
Yet company director Wolfgang Jassner is sure they're onto a winner.
"Our target group is the same in China as elsewhere -- young professionals with an interest in brands and the necessary cash," he said.
The Chinese prices are on a par with the German ones. Men's underwear starts at 20 euros and women's tops start at 25 euros. The Chinese GDP per capita was roughly 5,200 euros in 2005.
Nonetheless, in the booming People's Republic, the awareness of expensive brand-names is on the up, and Bruno Banani hopes to cash in on this trend.
"Made in Germany" goes to China
Although it is common practice for German automobile producers and other export industries such as engineering, chemicals and pharmaceuticals to export to China, German textile producers selling to the People's Republic are few and far between.
Only German textile products which are associated particularly with quality or a certain brand image can really make it in China, according to the German-Asia Pacific Association.
The small German clothing company Trigema, based in Burladingen in South-West Germany, claims that it produces everything in Germany. However, its export market is only tiny and does not include China. The German designer brand Hugo Boss on the other hand is well-represented in the Chinese market, but only produces single components in Germany.
According to its own statistics, a quarter of Bruno Banani's turnover is made up in exports and this is a growing trend. The company's high-tech underwear is still sewn in Saxony in the East.
"We can find highly-qualified personnel in Germany and can quickly pick up on trends here and respond to the market," Jassner said. Referring to high wage costs, he added that "Germany's economic situation is still good and we can afford them as a producer of high-value products".
Moreover, most of the hi-tech materials that the firm uses are not readily available in China yet, such as microfiber. This also means that the underwear will not be easily copied in China.