British fashion brand looks to expand presence in China with local alliance

British fashion brand Topshop is opening its first flagship store in China in Shanghai this September.

The British company, owned by the Arcadia group, said the expansion follows the acquisition of its Chinese mainland franchise by Beijing-based luxury online retailer Shangpin.com. Arcadia also owns the Topman, Dorothy Perkins, Miss Selfridge, Wallis, Evans and Burton brands.

The Shanghai store is expected to cover over 3,400 square meters, encompassing three floors in the city center.

The fashion brand will have more brick-and-mortar stores in the first and second-tier cities of China and further expand its online presence. Shangpin.com will position the brand's online and offline development and sales while Topshop will focus on product research and development and branding on a global basis, Shangpin said in a statement.

The Beijing firm said it plans to open more than 100 Topshop and Topman retail stores on the mainland in the next five years. It has already worked with more than 1,400 top fashion brands.

This is, however, not the first time that the British fashion brand has tried to enter the Chinese market. Topshop set up its stores in Galleries Lafayette department store in Beijing and was involved with a pop-up store in Shenzhen.

"We acquired the franchising business of Topshop to explore the Chinese market," said Zhao Shizhong, CEO of Shangpin. The firm has already worked with Topshop during the last three years as an online retailer of the British brand.

Globally, Topshop accounts for 0.1 percent of the women's wear market, according to Euromonitor International, a market research provider.

China's women's wear market has seen steady growth in recent years and achieved a market size of 872.8 billion yuan ($134 billion) in 2016. Total size of the market in 2017 is expected to be around 896.9 billion yuan and will increase to 963.1 billion yuan by 2021.

Bestseller A/S took the top slot in the global market with a 2 percent share and was followed by Shanghai La Chapelle Fashion Co Ltd with 1.2 percent and Fast Retailing Co Ltd at 1.1 percent.

Inditex, the parent of fast fashion brands including Zara and Massimo Dutti, was ranked fifth with 0.9 percent share.

Fast fashion brands Zara and H&M already have a firm presence in China and it is doubtful whether Topshop will be able to make any significant changes in the market, said industry experts.