Supplier‐retailer relationships in China's distribution channel for foreign brand apparel

Abstract

This study investigated how Chinese retailers perceive their foreign brand apparel suppliers and explored the use of power theory for explaining these relationships. A survey of 150 apparel retailers operating in Beijing, China provided data for the study. Referent power positively influenced retailers' attitudes toward and non‐economic satisfaction with their suppliers. Greater referent power also reduced channel conflict and enhanced economic satisfaction with business performance. The importance of this source of power seems to be linked with the concept of guanxi in China, where respectful relationships are valued. Coercive threats to withhold necessary merchandise, service, or contracts increased channel conflict. Surprisingly, greater channel conflict was associated with increased economic satisfaction with business performance. This relationship is contemplated from a cultural perspective and recommendations are made to foreign brand apparel manufacturers wishing to access China's retail market.