Deep Dive: DX Quality Outlet and the Off-Price Retail Market

Executive Summary

This report focuses on DX Quality Outlet (DX), a still-small but fast-growing off-price retailer in China that operates dozens of pop-up stores in cities across the country.

• DX sits at the intersection of off-price retail and pop-up stores, and it is developing a mobile retail presence, both of which position it well to succeed in China for years to come.
• DX sells midmarket to upscale brands for 75%–85% off standard retail price.
• As of May 2018, DX had opened 38 pop-up stores and 13 permanent stores in China. The company has targeted 11,000 total pop-up-store days this year.
• The company is working on expanding its mobile retail presence, which will soon include a store on WeChat, China’s largest social media platform.
• The US off-price retail market could be ripe for disruption by an enterprising, mobile-focused company such as DX, while Europe’s underdeveloped off-price industry could be poised for expansion.