WHY IT FAILED House of Barbie Shanghai

Hunter Thomas Jordan Liedholm

April 29, 2013

agenda

purpose + background research methodology about Mattel, Inc. meet Barbie understanding China + Shanghai the new dream house what went wrong + our thoughts final take

In 2009, Mattel opened Barbie’s first flagship store, House of Barbie, in Shanghai, China.

Known as the ultimate Barbie dream house, the store failed to reach expectations and closed after two years.

research methodology

project plan, strategy + goals

brand perception + store experience

Chinese + Shanghaies consumer market

Mattel’s annual reports, earnings call transcripts, press releases and other public records

News articles, social media, blogs and online reviews

Market research, financial studies, and economic data

$5.92 billion net sales

$3.2 billion int’l net sales

“Creating the World’s Premiere Toy Brands – Today and Tomorrow”

Mattel’s Corporate Vision, 2008

10,000+ SKUs sell products in 150 countries

With U.S. sales down, Mattel looked

internationally for growth.

Nearly 90% of American girls have called Barbie their friend.

Mattel looked to China for growth

and opportunity with Barbie.

top fashion doll 30% Mattel’s

revenue

“Barbie represents fashion, aspiration, and cultural relevance.”

Description of Barbie, by Mattel

over 1 billion sold worldwide

50th anniversary celebration

Shanghai: China’s “test” market

As the “highly urbanized, driver of the Chinese economy” many

brands look to Shanghai for entry.

Shanghai represents 11.3% of China’s GDP and is viewed as the

“most innovative and cosmopolitan [city], setting trends in fashion and lifestyles.”

Mattel’s research showed classic

Barbie tested better than her Chinese counterpart Ling.

Opened on March 6, 2009, House of Barbie Shanghai served as the first flagship store.

Located on Huaihai Road, Shanghai’s

premiere luxury shopping street.

The store intended to launch Barbie as a lifestyle brand for Chinese girls and women.

It was the first, and only, all-doll store in China.

36,000 sq. ft. six floors $43 million

dolls house of barbie

spa

cafe runway

pink fashion

shopping

dream luxury

sha

ng

ha

i

lifestyle brand experience

china photos girls flagship

Description of House of Barbie, by Mattel.

“Unapologetically all Barbie”

After less than two years, House of Barbie closed.

what went wrong

brand perception 1

store experience 2

brand perception

Barbie was not a cultural icon in China—she couldn’t be a lifestyle.

‘Barbie pink’ is not an immediate association of the Barbie brand.

Women felt clothing was over-priced and poorly made, they wanted “cute, not sexy.”

Hauihai Road includes the top luxury fashion brands, Barbie

wasn’t one of them.

brand perception

Hello Kitty, the ultimate ‘cute’ lifestyle brand and Yue-Sai are

admired in China and the world.

Knock-offs and alternative brands were abundant and cheap.

Educated, high-income

Shanghaies parents preferred spending on tutoring or books than buying dolls and clothes.

brand perception

Six floors of pink and Barbie overwhelmed consumers.

No storefront signage made

the store easy to miss.

Location was difficult to access, far from metro and core stores.

store experience

Chinese love face care, but the Spa did not make guests feel relaxed.

Too many amenities confused and

overwhelmed consumers.

At night, the restaurant became a karaoke bar and lounge called,

“The Pink Club.”

store experience

Activities were based in English, not Mandarin; the language

spoken by young girls.

As a result, activities like the Fashion Runway and Design Center

were unable to engage guests.

store experience

House of Barbie was the first, and only, doll store in China.

The store was modeled after American Girl in the U.S.

The Chinese were not ready for “all Barbie.”

Ultimately, they were overwhelmed and uninterested.

in review

final take In China, Barbie was not a cultural icon:

she couldn’t be a lifestyle.

The store was overwhelming and isolated Barbie’s reach to selective,

affluent consumers.

As global luxury consumers, Chinese expect a localized shopping experience, and demand a

global brand identity.

Chinese consumers are online, social, and aware of the global presence of brands.

…next time

Use multimedia and co-marketing to associate Barbie with Chinese cultural icons.

Don’t neglect the merchandise; too many

activities distract the consumer.

Storefront signage is critical, make it big.

Base activities in Mandarin so girls can easily participate and understand.

Pursue “shop-in-a-shop” mall entry to increase

brand equity and awareness.

Present Barbie as an aspirational brand to inspire Chinese girls.

So, what would you have done?

Hunter Thomas Jordan Liedholm

April 29, 2013

appendix

House of Barbie Floor Plan

Ground/First Floor

Second Floor

Third Floor

Fourth Floor

House of Barbie Floor Plan

Fifth Floor

Sixth Floor

House of Barbie Floor Plan