Hybrid Is the Key for Global Retailers in China

Global brands grappling with China’s fast-moving, fiercely competitive landscape shouldn’t hesitate to enlist local help. Whether that results in a joint venture, licensing agreement, or outright sale, creating a hybrid business model is a viable alternative for international players wanting to stay the course in a $7 trillion retail market that’s becoming ever harder to navigate.

The recent revival of Gap Inc. shows that a “glocal” strategy — foreign retail companies owned or operated by domestic firms — can succeed. The American casualwear maker sold its loss-making Greater China business to Baozun Inc., one of its e-commerce partners, for up to $50 million in 2022 after 12 years. Gap was able to offload a struggling asset as part of a larger global restructuring while keeping its brand name alive in a vital market.