YNAP and LC Waikiki Exit China: What Went Wrong and Who Can Succeed?

Written by Ercan TANRIBAK, Co-Founder of TaCaS Global.

In recent years, China has become an essential market for global brands thanks to its massive consumer base. However, not every brand that enters this market succeeds. Most recently, Yoox Net-a-Porter (YNAP) and earlier LC Waikiki—one of Turkey’s largest fashion retailers—have quietly withdrawn from China.

Following the termination of its joint venture Fengmao with Alibaba in 2023, YNAP’s withdrawal from China had been anticipated. As of March 2025, it has ceased all operations in the country.

Key Reasons for Failure:

🔻 Western Business Models Don't Always Fit China YNAP’s core strength—bringing luxury brands under one umbrella—proved redundant in China, where consumers already accessed these brands through their official Tmall stores.

🔻 Trapped in Price Wars When the same product appears across different sellers, Chinese consumers naturally choose the cheapest option. YNAP got caught in a downward spiral of discounts.

🔻 Complex Digital Ecosystem, Low Profit Margins Costs ballooned due to essential local components such as KOL commissions, livestreaming operations, and agency support—making the business fragile and unsustainable.

LCW also made an attempt.

LC Waikiki, Turkey’s largest apparel brand, also made a push into China but failed to gain traction.

Key reasons for its struggle:

🔻 Unclear Brand Positioning LC Waikiki was neither “as cheap as local brands” nor “premium quality from Europe.” It was stuck in the middle, a space already dominated by competitive local brands.

🔻 Weak Digital Localization Despite launching a Tmall store, the brand’s presence on key local platforms like WeChat and Xiaohongshu remained limited. It failed to capitalize on tools like livestreaming and KOL collaborations.

🔻 No Strong Consumer Perception While it is perceived as “good quality at a good price” in Western markets, in China, LC Waikiki was simply an unfamiliar, ordinary foreign brand.

🔻 Operational Challenges Supply chain and retail operations moved too slowly. In China’s fast-paced environment, this led to losses that were difficult to recover from.

So, Who Can Succeed in China?

The common mistake of both YNAP and LC Waikiki was attempting to impose their existing systems onto China, rather than adapting to it.

In contrast, successful brands in China typically share these traits:

✅ 1. Strategic Focus on Localization Companies that design digital strategies specifically for China and communicate in culturally relevant ways have a major advantage.Example: Starbucks integrated WeChat Pay and launched loyalty programs within the platform.

✅ 2. Clear Brand Positioning There is little room for “mid-market” brands in China. You're either premium or you compete directly with local brands on value.

✅ 3. Investment in China’s Digital Ecosystem Winning in China requires tailored content, campaigns, and partnerships on platforms like Tmall, JD, Douyin, Xiaohongshu, and WeChat Mini Programs. Example: L'Oréal effectively engaged younger audiences via Douyin livestreams.

✅ 4. Strong Local Partnerships From distributors to digital agencies to government liaisons, building a local ecosystem is essential. Example: Tesla’s success was largely due to local manufacturing and strong government relations.

✅ 5. Patience and Long-Term Investment It’s not about the first year—it’s about the first five. Trust is earned slowly. Long-term brand equity should be the priority, not short-term sales.

Success in China Comes to Those Who Adapt, Not Copy-Paste

YNAP’s rigid luxury model and LC Waikiki’s weakly positioned value approach both failed to take root in China. But that doesn’t mean the door to China is closed.

The real question is:“What can I offer China—and what can I learn from it?” Those who can answer this question still stand to gain from one of the world’s biggest opportunities.

For more information:

🌐 www.tacasglobal.com

🌐 www.ideclub.org