Last March, American toy maker Mattel closed its first flagship Barbie store – the House of Barbie – in Shanghai after two years struggling since opening in 2009. Mattel invested over $30 million in the House of Barbie in celebration of the American iconic doll’s 50thanniversary.
The concept was that Barbie is not just a fashion forward doll, she would also be a lifestyle symbol and cultural icon for girls and young women. The six-story building had the world’s largest collection of Barbie dolls and affiliated products such as children’s bedroom furniture and young women’s clothes. It also features a fashion runway, a design studio, a stunning spiral staircase decorated with 800 Barbie dolls, and a café on the top floor.
Many analysts pointed to the fact that Barbie is a Western doll and is “too sexy” for Chinese girls. The reality is, however, that Chinese girls actually like the blond Barbie better than the localized Chinese Barbie called “Ling.” Before the House of Barbie was launched, Barbie dolls had been sold in China and were relatively well received by Chinese girls. When I first bought a Barbie doll for my niece about ten years ago, I was surprised to find out that she already had a couple of them.
So, what are the real reasons that the House of Barbie failed to live up to its expectation? Recently, I spoke to the general manager of Barbie Shanghai, Gar Crispell, about what went wrong with the House of Barbie and what lessons can be drawn from that experience.
The first mistake Mattel made, in my opinion, is to have a standalone store before establishing Barbie as a strong brand in China. In America, Barbie is an iconic symbol of “femininity” for young girls. Over a period of fifty years, the brand has taken on a life of its own as Barbie assumed many roles of women. In China, Barbie is simply a doll. She is not associated with any cultural significance for Chinese girls or young women.
Since Barbie is not a cultural icon in China as she is in America, Chinese consumers couldn’t care less about Barbie-branded products. “The concept of the store is wrong,” as Crispell pointed out. The Barbie fashion clothes for young women would only make sense if Barbie is a cultural icon and established lifestyle brand.
Second, Mattel didn’t quite understand what Chinese girls and young women want. The Chinese concept of “femininity” is very different from that of American. In China, “feminine” is more about sweet and soft rather than smart and strong, more about gentle and loving rather than dazzling and fashion-forward. Although it has created a Chinese Barbie Ling with black hair who wears Chinese attire, Mattel failed to understand what Ling would represent in order to appeal to Chinese girls.
Instead of making Barbie a fashion and lifestyle brand, Mattel should have made Barbie an aspirational brand to empower Chinese girls. The idea of “I can be” is not encouraged in Chinese society, but is exactly what Chinese girls need. If Barbie, or Ling for that matter, could become a role model for Chinese girls, she would have re-invented herself and Mattel would have had a better chance to succeed in China.
Third, Mattel tried to bring a 50-year-old brand to a new market that had just gotten to know Barbie. Chinese consumers are new consumers. They are not yet as sophisticated as their counterparts in the West. Although China has changed significantly, it hasn’t changed to the point that 6-year-old girls would want to have their own fashion runway. I grew up with only one doll. Many women of my age didn’t even have dolls when they grew up. Although my niece now has many dolls, I am afraid that having a design studio to design her own dolls is too much of a luxury for her. The market was simply not ready for that.
In addition, the merchandise in the store was expensive since Mattel did not source in China. A pair of jeans cost as much as 1,000 yuan ($156). No one would spend that amount of money for a brand that doesn’t have significant recognition. Barbie dolls sold in other department stores were much less expensive. “We ended up competing with ourselves,” Crispell said.
To make matters worse, there are countless knock-off Barbie dolls on the market. Today, Chinese consumers might not buy a counterfeit Luis Vuitton bag. But a 6-year-old girl would not care about whether her Barbie dolls are authentic or not.
It is not a surprise that the House of Barbie could not keep its doors open any longer. “The overhead of a single store is huge,” Crispell said. “We couldn’t generate enough revenue to justify that.”
It’s often said that failure is the stepping stone to success. Unfortunately, failures like this cost companies tens of millions or even billions of dollars. That is why I have created a new program The Secret of Succeeding in China to help companies avoid mistakes like this. As Chinese consumers are coming of age, companies need to better understand the Chinese market, deploy smart strategies, and work with the right people when launching new products to China.