by QUAN BAO - TRUONG DANG 01/10/2024, 02:38

Levi’s billion-dollar strategy

Levi's aims to become a $10 billion corporation. On this trip, the DTC model, the Southeast Asian market in particular, and the APAC region as a whole are viewed as critical to success.

Levi’s has just opened its largest store in Southeast Asia in Kuala Lumpur

Levi's has recently established its largest store in Southeast Asia, in Kuala Lumpur, Malaysia. The store, located in the Suria KLCC shopping center, spans roughly 400 square meters and provides a broad range of items, including luxury collections like Levi's Vintage Clothing and Made in Japan, as well as weather-appropriate collections like Performance Cool and personalized designs.

According to Nuholt Huisamen, Levi's regional director for Asia Pacific, Asia, particularly Southeast Asia, is the fastest-growing market among the company's three main markets. Furthermore, this region has enormous growth potential. As a result, these are some of Levi's most crucial markets as it works toward becoming a $10 billion corporation.

To achieve this, Levi’s is focusing on three main directions. First, leveraging the brand’s popularity. Second, focusing on the DTC (Direct to Customer) channel. Third, diversifying everything from product types and markets to distribution channels, so that Levi’s becomes known as a diverse business, not just a men’s underwear brand.

The focus on the DTC strategy is one of the main growth drivers in Asia. In the U.S., Levi’s grew through wholesale activities throughout its history. But now, as a global company, they want to be strong in DTC, aiming to connect directly with customers.

In Southeast Asia specifically and Asia in general, 90% of Levi’s business is DTC. Over the past two decades, they have opened many stores in Malaysia, Singapore, Thailand, and the Philippines. At the same time, they have reclaimed stores from franchise partners and taken over their management.

Self-managing stores instead of franchising has led to significant growth for Levi’s in Singapore and Thailand. For example, in Thailand, they used to earn $10 million annually in royalties. But after taking over, revenue reached $50 million in just the second year. In Singapore, business tripled.

Levi's is not afraid to invest in physical locations in the internet era since, according to them, people still like to touch and sample denim goods in person. As a result, they take an omnichannel approach that includes both online and physical activities. At the same time, physical storefronts allow Levi's to present itself as a lifestyle brand, offering a diverse selection of items outside men's underwear.

After increasing in quantity, Levi's is now prioritizing quality. In other words, they want their businesses to create an impression, offering customers the most comprehensive shopping experience possible. They are expanding their stores in prominent areas to provide more premium experiences (what Levi's refers them as the Indigo concept). This includes the new Suria KLCC shop.

Along with the quest for better sites, they intend to renovate current stores to ensure that consumers receive uniform quality at all Levi's locations.

They will also improve digital platforms to give clients a consistent purchasing experience both online and offline.

As for products, Levi’s is focusing on expanding its Levi’s Vintage Clothing and Made in Japan lines. In fact, these two collections only account for 6–10% of sales in Southeast Asia, much lower than the 40% figure in Japan. However, their success in Japan creates a “halo effect,” making them the fastest-growing product lines in Southeast Asia.

Next year, Levi's wants to grow Levi's Vintage Clothing and Made in Japan. There will be more items designed exclusively for the Japanese market, which will naturally flow over into other regions of Asia.

In addition, Levi's is releasing the Performance Cool Product series. These goods are composed of high-tech textiles that can adjust temperature, making them ideal for hot and humid regions such as Southeast Asia.

Huisamen shared that Levi’s cannot compete in terms of price and speed of product releases with fast fashion brands. However, their differentiators lie in quality, heritage, and authenticity. They will not rush customers to make quick purchases but will instead promote the philosophy of "you get what you pay for."

This is quite evident in their stores. In shopping malls like Crescent Mall or Aeon Mall, Vietnamese consumers can easily spot slogans like "Buy expensive, wear longer" in every corner of Levi’s stores.