WORLD WRAP |
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PREMIUM SUPERCEDES LUXURY
An important trend coming to the surface is the rise of‘ premium’ brands. While in the past, it was known that the country has a penchant for recognisable high-end traditional brands, it seems like while they continue to do, they are not a majority growth driver in the market. A collaborative report from EY- Parthenon predicts that‘ premium’ will have the highest segment growth rate from 2016-2020, posting 6 per cent, as opposed to 3.4 per cent for‘ luxury’.
This trend isn’ t that surprising if you’ re looking at the global market where wearing a mix of high-low brands is the most covetable look du jour! Throughout the world, it is becoming a common practice to wear sportswear garments with glam accessories or vice versa. Even EY-Parthenon described the Chinese luxury customers as sharp‘ mix and match’ shoppers, mixing high-end fashion with lower-end premium products – a Prada bag with Lacoste sneakers – for example.
A key reason for smaller to midrange brands beginning to bloom are of course millennials and the Gen-Z that is going abroad and interacting with different markets. Despite their huge purchasing power and digital dominance, typical luxury brands struggle to connect with them, and this has allowed premium players like Diesel, Guess, Tommy Hilfiger and Calvin Klein to take the lead.
Apart from premium players, local brands and retailers in China are also beginning to gain ground; thanks to the popularity of intermixed fashion.
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Emerging brands in the region are doing everything from hosting experiential fashion presentations, opening museum like stores to building strong online communities to attract China’ s wealthy youth.
To illustrate, EPO Fashion Group, one of the most prominent players on the domestic scene, posted US $ 554 million in sales last year and just added a menswear brand, to its now 5-brand strong portfolio. Their womenswear label Mo & Co is stocked by admired retailers including Selfridges in London and Galeries Lafayette in Paris while the new men’ s line counts London-based designer Xander Zhou as a consultant.
While players like Shandong Ruyi and Fujian Septwolves are busy investing in luxury brands abroad, there are plenty like EPO, Shanghai’ s Dazzle Fashion( 1,000 stores across the country) and JNBY Group( 700 stores worldwide) as well as giants like La Chapelle Fashion, Youngor Fuguiniao and Hailian battling for dominance in China’ s high-street and RTW souq.
THE NEW DIGITAL MARKET
The new generation of Chinese shoppers, no longer blindly follow name brands. And even with a ban on Facebook, WhatsApp and the likes, the country’ s demand for digital is like no other. As the penetration of internet has reached smaller locales, this trend is only going to get stronger and must be kept in mind to lure Chinese shoppers.
For starters, it is no more enough for a brand to run with a‘ localise for China’ mindset; the goal should now be‘ Lead from China’ to make
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ESSENTIALS
The Chinese luxury customers are sharp‘ mixand-match’ shoppers, mixing high-end fashion with lowerend premium products. This‘ premium’ category is also showing the highest segment growth rate in 2016-2020 at 6 per cent, as opposed to 3.4 per cent for‘ luxury’.
While luxury brands struggle to connect with millennials and Gen-Z, premium players like Diesel, Guess, Tommy Hilfiger and Calvin Klein are taking the lead.
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an impact. Chinese fast-fashion brand Urban Revivo( a Zara lookalike) recently opened a store in London, which normally suggests that the brand might be looking to tap international clients but analysts believe that the expansion is mostly looking to serve Chinese eyes. The location creates a new gateway for travelling Chinese shoppers who can experience the marvels of omnichannel shopping away from home and take back home the message that UR is a global brand worthy of recognition.
Completely digitising supply chains is the future and smoothening loose ends in shopping experience is imperative to survive right now. It is no more enough to just have a WeChat account and talk to shoppers, which is only one of China’ s unique social platforms like Sina Weibo or QQ. Retailers must understand the whole gamut of capabilities provided on these services to capture a comprehensive digital footprint.
Tailoring services like loyalty programmes, customer-service communication, optimisation for Chinese search engines like Baidu, tapping local influencers for marketing to pop-up store on WeChat’ s brand zone – covering the whole length and breadth of it is expected from luxury brands.
China’ s receptiveness to tech also means that they also lead the way for disruptive retail tech adoption of virtual reality( VR) and augmented reality( AR). According to Worldpay’ s latest research, nearly 100 per cent of the people surveyed say they have tried AR or VR at least once, and more than half use these technologies once a week.
Additionally, it has been estimated that owing to the country’ s widespread use of mobile payment platforms like Alipay and WePay, China makes almost half of the world’ s digital payments.
Another fascinating factor is that because their social media platforms are so well-integrated with shopping features, the Chinese are also most open to blend e-commerce with social media and internet-based entertainment services. Chinese retail led the retail apocalypse in 2017 but brands were quick to learn from their losses and if the corrections continue, a rapid turnaround is definitely visible on the horizon.
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E-tailer Zalora’ s mobile pop-up store in Shanghai |