Wednesday, February 20, 2008

Zara, economic geography, and globalization

Early on, I found out--and wrote on this blog--that Paul Krugman did some interesting research regarding economic geography.

Today, in Fashion and Geography, he points out that Zara's marketing strategy is actually working against globalization. His excerpt from WSJ:

Stores are stocked with new designs twice a week. Collections are small and often sell out, creating an air of exclusivity and cutting down on the need for markdowns. The company ships clothes straight from the factory to stores. Unlike competitors who manufacture most of their wares in Asia, Inditex makes two-thirds of its goods in Spain and nearby countries such as Portugal, Morocco and Turkey. The retailer says the higher labor costs are offset by the flexibility of having production close to its warehouses and distribution centers, which are all in Spain.

I wonder if we can find examples of similar strategy here in Taiwan. I'll try looking around.

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