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 |