Quelle Drops 300,000 Books in China, Plans 1 Million in '98

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SHANGHAI - Die Quelle, Europe's largest mail order house, this spring dropped some 300,000 copies of its 4th Chinese language catalog in the Shanghai metropolitan area. The German company entered China last October.

"We can't talk about response rates yet, it's still too early," Yi Zhu, Quelle's general manager in Shanghai, said. "We are looking for a 5 to 10 percent response rate, but we'll need a year to find out how well we actually did."

All told, Quelle expects to drop a million books this year, following up on the half million sent out in the fall and winter of 1997. The catalogs lean heavily to textiles, mostly European fashion, with 30 percent hardware items.

Quelle entered China in a joint venture with China Post and Shanghai Post. It is careful about the lists it chooses, using those of Chinese banks and of joint ventures foreign companies have set up in China.

Joint ventures are numerous enough to provide a significant pool of people with guaranteed disposable incomes. "All kinds of companies have joint ventures here," Qui said.

"They come from the UK, Hong Kong, Thailand, France, Germany and a lot of other countries. We do some newspaper and magazine advertising, usually general newspapers and fashion magazines where we rely on stand-alone inserts."

Quelle does not use radio or TV in China as yet, concentrating on print. "We are doing some direct mail and the response from that campaign is just coming in. We use coupons for catalog requests.

"We have our own call center in Shanghai and can handle orders that come in by mail, telephone, fax and e-mail. We work closely with the post. All our parcels are sent out by Shanghai Post."

Delivery in the Shanghai region takes about a week, Zhu said, depending on the distance. "But once we start mailing to Beijing and other Chinese cities delivery will take longer. We expect to market to other cities in the near future."

Working women, specifically those employed by foreign joint ventures, are a major target audience. They are mostly on the young side, in the 20 to 40 age range.

"We offer more convenience and popular fashion styles, European and international, just as if they were French or German books. People like that and women here are accustomed to that kind of fashion look," Zhu said.

Catalogs are developed in China with clothes and other fashion apparel made produced locally but using European patterns. "We do some men's and children's clothing. Most of the factories we use are in and around Shanghai."

Quelle has had a buying office in China since 1983 and has worked with suppliers in the Shanghai region for many years. It has several joint ventures for apparel production dating back to the time when Quelle only bought in China.

With the exception of one or two German expatriates the company's Shanghai staff is Chinese. "We don't plan to open stores but to sell only through catalogs.," Zhu said.

Competition, he added, was limited - Otto Versand, the world's largest mail order house, Les Trois Suisses, a major French cataloger and Euromoda, a division of Mecoxlane, a US financed mail order house run by an ex-Quelle manager.

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