The China Edit | L Capital Asia Invests in Marubi, Nike Sales Down, Asos in China, Luxury Hotlines, China Slump

The China Edit is a weekly curation of the most important fashion business news and analysis from and about the world’s largest luxury market.

Nike Store Beijing | Source: Nike

LVMH Bets Big On Chinese Beauty Brand’s Global Ambition” (Jing Daily)

“After nearly three years of negotiations, LVMH-backed private equity fund L Capital Asia recently held a press conference at the Shanghai World Financial Center to announce its plan to invest in Chinese domestic cosmetics brand Marubi, which LVMH hopes to propel into the global spotlight with a possible Dior partnership and Sephora distribution. The Chinese cosmetics sector has been growing at a fast pace in recent years, but the market is currently dominated by foreign brands, such as L’Oreal and Estée Lauder.”

Nike Just Doesn’t Do It With Lost Sales Year in China” (Bloomberg)

“Though it has been in China for 30 years, the world’s largest sporting-goods maker is losing customers to Adidas AG’s more fashionable street wear and Hennes & Mauritz’s cheap, hip clothing. Eighteen months ago, Nike was so bullish on China it predicted sales there would double to $4 billion in four years. Now it says China sales will probably fall for the next two quarters, which would make it five in a row.”

Asos to Launch New E-commerce Platform in China” (China Daily)

“Hybris, the world’s fastest-growing commerce platform provider ranked ‘leader’ by both principal analyst firms, today announced that Asos, the UK’s largest online-only fashion and beauty store which makes more than 60 percent of its sales outside of the UK, has selected the Hybris Commerce Suite to launch its new e-commerce business in China. According to a report from eMarketer released in February 2013, this year’s B2C e-commerce sales are expected to grow 18.3 percent to $1.298 trillion worldwide as Asia-Pacific (APAC) surpasses North America to become the world’s No. 1 market for B2C e-commerce.”

Hotlines Spring Up for China VIPs to Buy Luxury Goods Amid Anti-Graft Drive” (South China Morning Post)

“President Xi Jinping’s anti-graft campaign may have created a new business on the mainland: serving ‘important people’ in an extremely low-profile, or even secret, way. Social media, such as the microblogging service Weibo, has become an effective tool to help the public monitor and report their suspicions of bribery and corruption. So, nowadays if someone important wants to buy luxury products but for some reason does not want to be seen in the shop, he or she just calls a hotline and asks for the product to be delivered to their home, where they pay cash on delivery.”

Hitting China’s Wall” (The New York Times)

“[Given] a secretive government, a controlled press, and the sheer size of the country, and it’s harder to figure out what’s really happening in China than it is in any other major economy. Yet the signs are now unmistakable: China is in big trouble. The country’s whole way of doing business, the economic system that has driven three decades of incredible growth, has reached its limits. What immediately jumps out at you when you compare China with almost any other economy, aside from its rapid growth, is the lopsided balance between consumption and investment.”