OPPORTUNITIES Communication Sources Europe's Internet commerce industry is starting to pick up, following the lead by the United

States, where over 70 percent of the world's e-commerce business took place over the past year, according to market research company, International Date Corporation. The research firm, Jupiter Communications reported online retail sales in Europe would reach $3.3 billion in 2002, up from the $165 million in 1998. In December 1999, when Benetton announced it would begin selling products on the Internet, its share surged nearly 13 percent resulting in its largest one-day rise in more than one year. Online sales will allow the company to access markets where it has low penetration and where e-commerce is more developed, such as in the U.S. In India, Benetton's advertising is concentrated on a renewed focus of communication. Benetton's image in India was considered a "discounted" brand, since they usually limited their advertising to only two end-of-season sales. However, recent television commercials were received positively by both

franchisees and consumers. This kind of positive feedback could result in a new opportunity for Benetton by focusing more on media channels such as television and radio, rather than billboards or magazines. In addition, Benetton had great success with their two-tiered approach, specifically with the launch of their Sportsystem division. This approach was taken in order to gain a larger share of the US market without having to abandon their traditional image campaigns. By allowing their US retailers more flexibility when choosing which advertisements to use for a selected campaign, they were able to circumvent any potential loss of market share and also retailer dissatisfaction. Benetton could use this strategy when developing future campaigns.

Japan To increase sales in the future, the US and Japan should lead the way as an opportunity for increasing Benetton's total revenues, even though the company expects Italy and Germany to remain its top two markets. Japan is currently recovering from a financial crisis, which should lead to increased

opportunities for future growth in Benetton's sales and profits. The Asian financial crisis dramatically affected sales of Benetton's sporting goods line in Japan, causing a 10 percent drop in sales in 1998, and 17 percent in 1997. This required Benetton to acquire more sportswear revenues in the U.S., which produced only 16 percent, or $384 million, of Benetton sales in 1998 and 15.6% in 2001.
The total Japanese market for apparel was estimated at approximately $35 billion as of 1999. The apparel market in Japan was growing at 10 to15 percent annually until 1996, despite a slow economy and a stagnant domestic apparel market since the early 1990s. In

particular, Japan's apparel imports enjoyed a remarkable increase of a 15 to 20 percent annual growth until 1996. Japan's gross domestic product (GDP) registered a real growth This was the first time in three years for the figure to fall According to

rate of 0.9 percent in 1997.

below one percent and was the lowest level among major developed nations.

1997 statistics compiled by the Ministry of Finance, the major countries from which apparel is imported and their respective percentages of the import market are: China, 69.4%; Italy, 8.2%; Vietnam, 3.6%; Indonesia, 2.5%; and the United States, 2.4%. The high market share

from China, and Vietnam are due to Japanese manufacturers' increasing use of their jointventure sewing mills in these countries, where lower-cost labor is available. Imports from

Italy were stable overtime due to the deeply implanted good brand image of Italian fashion among Japanese consumers. Italian apparel companies are currently trying to regain their

1980's position in the Japanese market through the creation of classic-casual types of women's wear at reasonable prices. Benetton, looking to capitalize on its Japanese customers, has

targeted this market as an opportunity for future growth based on economic and cultural aspects such as their loyalty to Italian brands and the country's growing economic status. Since Japan is a high context country, Benetton should see this as an opportunity to extend on their already strong relationship as Japan moves into a period of economic growth.

France There appear to be numerous opportunities for companies to successfully penetrate the French market to gain market share. The size of the apparel market in France has been growing over the last three years, as well as increasing amounts of the total exports and imports. Benetton could capitalize on this growing demand for apparel among the French population. Apparel Market in France (Millions US dollars) Total Market Size Total Local Production Total Exports Total Imports Total Imports from U.S. Exchange Rate: USD 1.00 Belgium Consumer spending in Belgium is picking up after over five years of flat, and even depressed, consumer demand levels. Consumption grew 3.6 percent in 1998, due to increases in real income per household and consumer confidence. Economic forecasts are pointing to steady growth of about 3 percent for 1999 and 2000. There is a continued strong market interest for American sporting and leisure apparel, as American styles are popular and designer and branded products are less price sensitive in Belgium. Major

1997 37,739 15,130 22,260 29,043 1,452 FF 5.75

1998 37,850 14,800 22,295 30,164 1,206 FF 6.00

1999 38,228 14,948 22,740 31,068 1,218 FF 6.10

competitors of the local Belgian markets come from manufacturers and designers in France, Germany and Italy. For low-budget clothing and mass distribution items, low cost producers in the Far East, such as China, Thailand and Indonesia continue to provide the bulk of imports. Benetton has the opportunity to gain market share in this country by promoting their sportswear and leisure apparel that appeal to this market's consumers. As you can see by the following table, Belgium's market size is growing, as is its local production figures. Although, the total imports declined in 1999, Benetton still has the capacity to formalize a joint venture with local retailers and just set up their distribution system to begin reaping profits. Apparel Market in Belgium

(Millions US dollars) Total Market Size Total Local Production Total Exports Total Imports Total Imports from U.S. Exchange Rate: $ = BEF

1997 2,890 1,824 986 2,052 81 35.7

1998 2,952 1,863 1,008 2,097 82 36.3

1999 3,098 1,956 2,200 1,058 85 37