Xiu.com screenshot | Source: Xiu.com

We continue this week’s focus on e-commerce by turning our attention on how to succeed in the rapidly expanding e-commerce market in China. 

BEIJING, China — According to a recent report by The Boston Consulting Group (BCG), China is set to become the world’s next e-commerce superpower, surpassing the United States to become the largest online commerce market in the world, with an estimated market size of $300 billion. In 2006, less than 10 percent of China’s urban population shopped online. By 2015, that figure is expected to have quadrupled, reaching 44 percent, while the total number of e-commerce shoppers in China will grow to 329 million.

What’s more, according to BCG, China’s massive geography, a middle class that is rapidly expanding beyond the country’s largest cities, and widely accessible, heavily subsidised high-speed internet — broadband in China costs just $10 per month, compared with $30 per month in India — make the country unusually fertile ground for e-commerce, with internet access far outpacing the reach of physical retailers. Indeed, up to a quarter of e-commerce demand in China is for products consumers cannot find in physical stores, with apparel and skincare amongst the fastest-growing online categories.

But for fashion companies aiming to crack the online retail opportunity in China, it’s imperative to understand that the country’s e-commerce market is very different to established markets in the United States and Europe and that online shoppers in China — much younger, on average, than their Western counterparts — have different expectations, preferences and patterns of behaviour.

… Continue Reading

Miu Miu Event in Shanghai, China | Source: Miu Miu

BEIJING, China — According to Bain & Company, a consulting firm, China is currently the world’s second largest consumer of luxury goods, ahead of Japan and second only to the United States. McKinsey forecasts that by 2015, China will account for around 20 per cent, or 180 billion renminbi (US$27 billion) of global luxury sales.

With numbers like these, it’s no surprise that a major land grab is underway amongst fashion brands eager to open new stores in China. But rapid retail expansion is only one part of a comprehensive strategy for seizing the opportunity in China. Equally important are a focused approach to local PR and product strategy.

… Continue Reading

Screenshot of Gucci on Weibo | Source: Gucci

SHANGHAI, China — In the parallel internet universe behind China’s “Great Firewall,” where search engine Baidu is Google, etailer Dangdang is Amazon, and video sharing site Youku is YouTube, the microblogging service Weibo (pronounced Way-Bwah, literally microblog) — launched in August 2009 by online media giant Sina Corp — has emerged as the country’s answer to Twitter.

According to brokerage and investment group CLSA Asia-Pacific Markets, China is set to become the world’s largest luxury market with demand from “Greater Chinese” to account for 44 percent of global sales by 2020. Analysts are also seeing a surge in China’s internet usage: according to a report by the China Internet Network Information Center, by the end of 2010, there were over 457 million Chinese internet users.

Set against staggering statistics like these, Twitter-like Weibo — a platform with over 100 million users (growing at 10 million users a month) and the centrepiece of Sina Corp’s transition from a Web 1.0 news and entertainment portal to a social networking service — has recently captured the attention of the world’s leading fashion brands.

… Continue Reading

Hung Huang | Source: Hung Huang

BEIJING, China — Imagine a brand new China where modern women reject increasingly ubiquitous foreign luxury goods, and their counterfeit reproductions, in favour of raiment designed by local Chinese fashion talent. This is the vision that Hung Huang, the entrepreneurial CEO of China Interactive Media Group and the oft-described “Oprah of China” — she also runs fashion magazine iLook, frequently appears on television as a cultural critic and pens one of China’s most widely read blogs — aims to achieve with her retail venture Brand New China, or BNC, a platform designed to encourage high quality, independent Chinese fashion.

BNC occupies a 540-square-meter space in Beijing’s hip Sanlitun area, home to global brands like Balmain, Balenciaga, Lanvin and Comme des Garçons’ new I.T Market. But, as a rule, the boutique only stocks fashion, accessories and lifestyle items made by emerging Chinese designers, whose products are sold on consignment.

What Chinese fashion needs more than anything now is curation. “You need a credible ‘editor’ to say, ‘I stake my reputation on this, and I’ve tried it, and it’s good, and I didn’t get paid for saying this,’ and that’s what we’re trying to do,” Ms. Hung said.

As BNC explores e-commerce, expansion into other important economic centres like Chengdu or Shenzhen, and the possibility of pop-up shops in Western department stores, Ms. Hung revealed exclusively to BoF her top designer picks from a growing scene of rising Chinese fashion talent.

… Continue Reading

NEW YORK, United States — Making economic predictions isn’t easy these days, what with key indicators slumping one day and then bouncing back the next. But even as the global economy keeps market observers and analysts on their toes, there is one thing that everyone seems to agree on: the pre-eminence of the Chinese economy.

Last month, the Chinese government announced that it was depegging its currency from the US dollar, allowing the Yuan to appreciate within a defined band, slowly abandoning the exports-led growth strategy which has made Chinese goods cheaper in the global market in recent years. But now, as Western economies stop and start, the Chinese government is looking to sustain its growth by stimulating demand at home. Last week the IMF made projections that China’s growth rate will slow somewhat next year from over 9.9 percent in 2010, to 9.6 percent in 2011.

But still, for luxury goods companies, China offers the biggest opportunity for luxury brands in a generation.

… Continue Reading