oohoo has garments made in both the UK and China, which means there are two distribution channels to think about.
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When goods are made in China the route of distribution is more complex in comparison to when being produced in the UK. Both routes have their pros and cons.
China is known for it’s low labour costs, working out as an advantage for Boohoo. This means in regards to labour, producing in China is more cost effective than producing in the UK. It is estimated that the average hourly payment for a factory worker is $0.40* in China and with the current exchange rate this works out as only 26p an hour – extremely low when Britain’s minimum wage is £6.50, so you can just imagine the difference! However you can’t purely base judgement on this, as transportation costs from China to the UK are far higher. Sales could also be lost during the transportation of goods.
Goods that have been ‘made in Britain’ are perceived as being higher quality than those made in China. However at Boohoo this is less of a concern for us because of our younger target market and we understand that this is less of a concern for them. They’re more interested in price and design.
Having said this we do want to make sure that our garments are good quality, no matter if they’re made in the UK or China. To ensure this we need to make sure that we do regular quality checks, and we do this by visiting factories. From a logistics point of view it’s far easier, cheaper and quicker to visit our factory in Leicester than it is to visit China. From a convenience point of view having our factory in the UK helps us monitor it closely – meaning any issues can
be found and resolved quickly.
Working conditions and health and safety regulations are far more lenient in China; this could be seen as a benefit to Boohoo producing. However is this something we really want to be associated with? It would money and staff but we want to make sure we are having a positive effect on the industry and those working within it. We like to know that our staff are not being over worked or underpaid.
When thinking about which distribution channel is the ‘best’ it’s good to think about it in regards to our consumer. Our target customer wants fast fashion at affordable prices with a webpage this is easy to shop with an efficient delivery process.