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Can 'China Day' Live Up to the Hype?

As trade war tensions come to a head in Beijing, US-China relations will be stronger than ever on New York Fashion Week's China Day runway.
JNBY, Angel Chen, Chen Peng and Li Ning's collections from previous China Day runways | Illustration by BoF
By
  • Zoe Suen,
  • Denni Hu
BoF PROFESSIONAL

Hello BoF Professionals, welcome to our latest members-only briefing. China’s colossal size and dynamism makes it a top priority for any global business, but it remains opaque to many in the fashion industry. Leveraging our rare access and local knowledge, the BoF China team demystifies the Chinese market with weekly industry analysis and the wider socio-cultural context you need to sharpen your focus.

NEW YORK, United States — They're big-spenders in all things luxury, yet thrifty and pragmatic. Experience-driven but debt-ridden, they expect superior service on a growing number of unfamiliar mobile apps. Fashion can't get enough of China's Post-90s' and soon its Post-00s' generation, upon whom luxury brands' future earnings so greatly depend.

Even so, much of the spotlight on China’s younger generation centres on consumption over culture, spending over spirit. Today in New York, two designers will attempt to show the industry what it really means to be young in China.

At Pier59 Studios, New York Fashion Week China Day show goers will see collections by Peacebird Men and NPC (New Project Center), themed ‘Youth Made China.’

The Council of Fashion Designers of America (CFDA) will once again partner with Chinese brand management and marketing giant Suntchi — with whom it signed a five-year strategic partnership in 2017 — to bring Chinese brands onto a global stage. In addition to the runway show, Nordstrom will be celebrating the showcase with a retail display running from February 11 to 17.

“This season happens to coincide with Chinese New Year, and we chose ‘Youth Made China’ as a theme to highlight and bring the country’s design and multifaceted youth culture and spirit to American media and retailers,” Suntchi’s founder and chief executive Paul Fang said. “It’s been a goal of ours, to show the US a different side of China every season.”

A Missing Power Player

For the first time since China Day’s inception, Alibaba-owned Tmall isn’t participating in this season’s event, previously titled ‘Tmall China Day.’ How the CFDA and Suntchi change things up in the retail giant’s absence will be the elephant in the room.

“It is entirely possible for Tmall to do another China Day in the future,” an Alibaba spokesperson told BoF. The platform’s involvement in past seasons brought Alibaba’s live-stream and ‘See Now, Buy Now’ technology to the runway shows, along with online resources to bring the collections across borders and to consumers’ doorsteps.

Angel Chen was among one of last year's designers chosen to showcase her collections on the China Day runway. "Working with Tmall was so different to our usual business model and wholesale distribution channels," Chen tells BoF.

Li Ning's Autumn/Winter 2018 collection backstage at China Day | Source: CFDA

“The platform has a huge exposure, and because of their traffic a lot of people got to know us. When we show on our own, we are showing to our fans and industry insiders.”

Tmall’s partnership was among a growing number of Chinese retail giants sponsoring fashion weeks abroad. “VIP.com sponsored a London Fashion Week presentation last year while JD.com has previously held shows at New York Fashion Week, Milan Fashion Week, and London Fashion Week,” notes Liz Flora, editor of Asia Pacific research at business intelligence firm Gartner L2.

And with Tmall missing in action, the designers won’t be the only ones missing out. “Chinese e-tailers are holding these shows not only to raise the profile of Chinese fashion designers abroad, but also to gain fashion cachet with foreign luxury brands in order to attract them to officially sell on theses platforms,” says Flora.

A Global Gateway

This season is China Day's third, following last year's successful February debut featuring Chen Peng, Li Ning, Peacebird and Clot, and womenswear runway showcasing collections by Angel Chen, JNBY and Particle Fever in September.

For the event’s alumni, the exposure and hype around China Day has opened doors both at home and abroad. Soon after the first edition, the topic ‘Tmall China Day’ was mentioned over 20 million times on Chinese social media platform Weibo along, and home-grown sportswear stalwart Li Ning, whose hoodies and Chinese flag-hued athleisure struck a streetwear cord, saw its stock boosted by 50% within a month of the show.

London-based designer Chen Peng, who brought his signature cartoonish puffer jackets and coats to the stage in yellow and seafoam to much acclaim, saw his global retail channels double from 40 to 80 stockists. Chen's pieces can now be found in the likes of Dover Street Market, Ssense, and Opening Ceremony, and he showed a Himalayan-inspired collection on February 8 as part of New York Fashion Week's official schedule.

https://www.instagram.com/p/BfBIzGQHZOH

For Clot’s chief executive Kevin Poon, showing the brand’s Fall/Winter 2018 collection at New York Fashion Week was a homecoming event. “To see our brand go full circle was a complete 360 bless up,” Poon told BoF. “A lot of people that knew us got to see us in a different light, and [the event] also opened up a new demographic.”

In the wake of China Day's sophomore show in September, the event's short-term search volume hit 2.4 million and 12.6 million across Baidu and Google respectively. Hangzhou-based brand JNBY, whose spring collection featured menswear-inspired silhouettes and utilitarian yet relaxed outerwear, saw its WeChat mentions increase by 1137.03 percent.

Angel Chen has shown her collections in London, Milan and Shanghai, but China Day marked her New York debut. “New York is more young, dynamic and open-minded compared to other Fashion Week cities, so Chinese brands tend to flock here. Even outside of China Day, there are plenty of Chinese designers making moves, and it’s a place that encourages hope and anticipation.”

https://www.instagram.com/p/BnkG_9XFH-M/

For designers used to staging conceptual installations and showcasing their collections through free-form presentations, China Day’s relatively unembellished runway format could take some getting used to. “In Shanghai, we always want to try new crazy and creative immersive formats to try to get our concepts across,” Chen tells BoF. “The best medium isn’t always a runway show.”

Adapt to Survive

It makes sense that Peacebird has been chosen to make its second China Day appearance, given this season’s theme. At home, the Ningbo-based, 24-year-old brand is lauded for successfully transforming its business model for millennial shoppers and the digital age.

“Our definition of ‘Peacebird Youth’ revolves around a generation that is increasingly open and confident,” says Wang Mingfeng, Peacebird Men’s general manager. “We must bring Chinese elements to New York, because they’re at the core of what we do and are as a homegrown brand, which means we have that unique perspective on style that deserves to be shared.”

According to the group’s third quarter earnings for 2018, revenues hit 4.88 billion yuan (around $724.69 million), an increase of 13.14 percent year-on-year.

For its Autumn/Winter 2019 collection, Peacebird Men will pull out all the stops to create what youths want to wear, be it in China or elsewhere. The brand will be collaborating with renowned artists Trevor Andrew and Reilly (also known as Gucci Ghost and Hey Reilly respectively). "As the definition of 'youth' evolved, so have we," Wang tells BoF. "If you're an established brand, you either undergo rigorous transformation or risk being sent into the archives."

Peacebird Men and NPC | Source: China Day

As one of China’s first wave streetwear brands, NPC has long had its finger on the pulse, where China’s younger consumers are concerned. On keeping up with China’s youth demographic, the brand’s co-founder Nic Li echoes Wang’s approach. “The only thing that doesn’t change is that you need to keep changing, and transforming yourself,” Li tells BoF.

The brand was founded by founded by Li and singer Will Pan ten years ago. With stores spread across Shanghai, Chengdu, Hangzhou and Xian, NPC's annual sales have exceeded 56 million yuan (around $8.3 million), according to the brand. For its China Day debut, the label will be teaming up with a slew of Chinese brands, including Phantaci, AnB Brand, the Mad Hatcher and Umamiism to represent the melting pot that is Chinese youth culture.

And though a lot has changed in China’s streetwear scene in the past decade, Li hopes that the show will give its audience a sense of how deep-rooted China’s current youth and streetwear culture is in the past. “Ten years ago, there weren’t many opportunities, and no one paid attention, but now it’s night and day…we want to create a cultural exchange, and give people a fusion of old meets new, east meets west.”

“Chinese youth culture is subconscious, and it has belonged to us for over 5,000 years, we just weren’t aware of it."

时尚与美容

FASHION & BEAUTY

The M.A.C. x Honour of Kings campaign | Source: M.A.C.

Gamified Beauty Powers Up

It's not every day that a cosmetics brand teams up with a mobile game, but Tencent and M.A.C. made it work. The mobile game giant collaborated with the makeup brand to release a collection of five limited edition lip colours inspired by its own Honour of Kings (known in the west as Arena of Valour) game —the world's highest grossing game last year. The collection was a hit, and all give shades sold out overnight across all channels. According to M.A.C.'s marketing director Weng Yanling, the collection's success stemmed from game players mentioning the brand when creating beauty profiles for their avatars, and the seemingly incongruous companies' overlapping 18-24-year-old user demographic. What's more is that the game added a strong storytelling element to the content, which in turn inspired interactions and interpretations, including one user's self-made edit of male game avatars replacing the female characters in the campaign imagery. (Ladymax)

Tapestry Feels Travel Spend Slowdown As Shiseido Sales Soar

In the midst of China's economic slowdown, the latest earnings from Hermès, Coach, Kate Spade and Stuart Weitzman parent Tapestry and Shiseido echoed the optimisim of LVMH, Tiffany & Co and Burberry's annual results. Though Chinese shoppers are helping boost sales growth in China domestically, the slowdown is evident in decreased tourist sales for Tapestry. Meanwhile, Hermès "did not see any change in momentum in our stores in China," according to its chief executive Axel Dumas, and Shiseido saw a 32 percent increase in sales year-on-year thanks to consumers in China. In contrast to Tapestry's decline in Chinese tourist spend, Shiseido saw travel retail sales soared 40 percent. But considering the unlikelihood of a Trump-Xi meeting before US tariffs on Chinese imports come into effect next month, slowdown jitters won't disappear anytime soon. (Jing Daily) 

Bring On The Red Packet Brand Wars

In the wake of Dolce & Gabbana and Burberry's respective campaign faux pas, paying attention to Chinese cultural customs have become a prerequisite for doing business in the Middle Kingdom. And red packets — the traditional lucky monetary gift given by married couples to unmarried friends and family during the Chinese New Year holiday season — top the list of hot marketing pushes for fashion and beauty brands, followed by lunar festival moon cakes. Since Tencent's WeChat launched its digital red envelope function in 2014, many users have opted for virtual gifting, and 32 billion virtual envelopes were sent over the holidays in 2016. Tencent rival Alibaba soon followed suit, and brands such as Burberry and YSL Beauté have hopped on the digital bandwagon, but physical red packets have become the de facto battleground for luxury brands to show off their branding and design chops. For the Year of the Pig, the likes of Dior, Hermès, Gucci, Louis Vuitton, Cartier and Loewe sent out exclusive envelopes to their VIP customers, featuring intricate Chinese paper cutting, gold embellishments, and unmissable pig motifs. There's nothing like a little more social media exposure and brand equity to ring in the new year. (Jiemian) 

科技与创新

TECH & INNOVATION

Source: Shutterstock

Tencent's Reddit Investment Sparks Censorship Panic
On January 5, it was announced that American social news and discussion site Reddit is raising a $150 to $300 million Series D round to be led by tech giant Tencent. Alongside Facebook, Twitter and Youtube, Reddit is one of the many foreign sites blocked by Beijing's 'Great Firewall,' and Reddit users — who see the site as a bastion of free speech — were quick to criticise the move. Over 330 million monthly active users visit the site's 150,000 Subreddit discussion pages, and Condé Nast's parent company Advance Publications is Reddit's majority shareholder. Contrary to the censorship panic, analysts are sceptical that Tencent's status as an investor would jeopardise Reddit's content, and a $150 million investment is nowhere near full control seeing as the site could hit a post-money valuation of $3 billion. (The Drum) 

Douyin Hires Ex-Youtube Exec in US Push

Chinese millennial-loved short video platform Douyin — known internationally as Tiktok — has instated Vanessa Pappas as its first general manager for the US. It was announced on February 8 that the ex-Youtube global head of creative insights, who oversaw influencer and celebrity growth in her previous role, will soon be joining the company's Los Angeles offices. Globally, the platform has passed 500 million active users, and 250 million active daily users in China alone, where brands such as Dior, Chanel and Louis Vuitton have posted campaigns on their official accounts to reel in younger shoppers. Hiring Pappas illustrates the platform's ambitions on the global playing field, and western companies shouldn't rest on their laurels — in the US, Tiktok already is ranked sixth on iOS, right behind Youtube and Instagram. (Tech in Asia) 

What’s In a Name? Behind China’s Tech Titles

Chinese companies' names may often stump foreign tongues, but they speak volumes on the country's tech ambitions. While Huawei's pinyin (Romanised Chinese characters) translates to 'Chinese ambition' in English, Alibaba's semiconductor unit Pingtou Ge is a reference to honey badgers, known for their fighting prowess. Baidu's artificial intelligence chips named Kunlun are a nod to the Asian mountain range as well as a symbol of divinity in local mythology. As to Chinese space programs, the Chang'e 4 mission and Yutu rover are both references to the mythological Chinese lunar goddess Chang'e and her pet jade rabbit, while the Tiangong-1 space station was inspired by the mythological heavenly palace, home to the Chinese jade emperor. (SCMP) 

消费与零售

CONSUMER & RETAIL

Woman shopping at Chanel | Source: Shutterstock

Is ‘Mianzi’ Fuelling China’s Shopping Addiction?

Mianzi, the Chinese word for reputation and social status, could be controlling Chinese shopping habits, according to a recent study in the Journal of Business Research. According to researchers, the key to China's compulsive online shopping lies in a desire to maintain social status among peers and co-workers. The report cites office workers having parcels delivered to their workplaces, and shopping online in public in order to be seen spending. However, China's online shopping boom can also be traced to marketing and sales tactics employed by e-commerce companies such as Alibaba, and across platforms such as WeChat. Regardless, some worry that the consequences could be dire: Chinese households are taking home only half of what they earn, the lowest percentage globally, and the country is already $34 trillion deep in public and private debt. (Wired) 

China’s Spend-Thrifts Opt For Micro-Loans

Spreading the cost of spending across instalments is the new norm for China's cash-strapped millennials. During the new year holidays, Alibaba's mobile payments platform Alipay rolled out a function offering users a chance to pay for travel tickets in three interest-free partial payments, and apps such as Fenqile allow users a year-long instalment plan for plane tickets, apartments, cars, food and beauty products with interest. By fall 2018, Fenqile's platform had already attracted 32.6 million registered users, and some users are now reportedly using micro-loan services to pay for items as pedestrian as hamburgers. The trend is especially driven by lesser-earning millennials, but could spell danger for China's already worrying debt problem if more shoppers continue to buy what they can't afford. (Tech in Asia) 

A New Year For New Retail

As China's crowded e-commerce markets continues to thrive, retailers will need to offer exciting digital experiences to compete. According to Ebrun, the country's mobile e-commerce users reached 510 million in 2018, and is slated to hit 550 million in 2019. During the first half of 2018, Alibaba-owned Tmall and JD.com occupied 83.8 percent of the B2C e-commerce market share, and continue to lead the sector, while smaller players Vipshop and Suning have 5.7 and 3.7 percent shares respectively. To set themselves apart from the rest, retailers will need to harmonise their online and offline channels, upgrade their business model and global supply chains through technology and automation, utilise data to keep track of consumer tastes and reactions, and be aware of their user demographics to tailor content and shopping experiences to their tastes. What's more is that 'new retail' will be increasingly community-oriented, with companies such as WeChat and Xiaohongshu likely to lead retailers into a new phase of social e-commerce. (Ebrun) 

政治、经济、社会

POLITICS, ECONOMY, SOCIETY

Source: Mimeng

‘We-Media’ Spurs Fake News Furore

Over 13 million WeChat users followed social media account Mimeng for its controversial takes on issues concerning relationships, marriage and affairs, but the account recently came under fire for publishing a partly fabricated story. The account, known as a 'we-media' or self-regulated publication, released a short story about its author Yang Yueduo's old classmate's life story, and his eventual tragic death at age 24. The story soon went viral, and it wasn't long before netizens found inconsistencies in it. Mimeng apologised on Weibo before announcing the account would take a two-month break for "self-reflection" purposes, prompting the online community including the Jiangsu Public Security Bureau of Internet Safety's official account to voice their disapproval of the account's lack of social responsibility. The scandal wasn't an isolated incident — in January, Chonqing's internet authorities launched an investigation into almost 50 'we-media' accounts and suspended two for spreading fake news." Since 'we-media' could encompass even single blogger accounts, the category is a grey area for regulators, and bloggers will have to be diligent about their content in the midst of ongoing censorship crackdowns. (What's on Weibo) 

Nasdaq-Style Board Looks to Bring IPOs Home

A start-up board in Shanghai could mean big things for China's equity capital markets. Last week, new rules for the board were published , which was announced by President Xi to much surprise two months ago. Presently, public listings on China's markets may be stalled for months by regulators, and a requirement that IPO candidates are profitable sets a high bar for start-ups. The new "technology innovation board" with limited powers for officials means a registration-based procedure, an opportunity to go public for companies that aren't strictly profitable yet. In laying out its plans, Beijing is keen to draw home-grown start-ups to list in China, so domestic investors can benefit from their success — Chinese companies raised almost a third of the global total in IPOs last year, but less than a third of the $64.2 billion result was raised in Shanghai or Shenzhen. (Reuters) 

Two-Year-Old Coffee Start-Up Takes On Starbucks

Move over, Starbucks. Start-up Luckin Coffee, which caffeinates China's on-the-go working population, was founded in 2017 but has already opened over 2,000 outlets around China and plans to open 4,500 more. China is Starbucks' fastest-growing market, and the giant has around 3,600 stores in the country; Luckin's cashless outlets are centred on speed and convenience rather than ambiance and focus on delivering cheaper coffee, faster. While Starbucks only began sending out deliveries last summer by partnering with Alibaba, Luckin has inked a partnership with the retail giant's arch-rival Tencent and is burning through $130 million a year to win over China's coffee market. Valued at $2.2 billion and backed by the likes of Singapore's GIC sovereign wealth fund and China International Capital Corp, Luckin's US IPO could raise $300 million as early as the second quarter of 2019. (The Straits Times)

China Decoded wants to hear from you. Send tips, suggestions, complaints and compliments to zoe.suen@businessoffashion.com.

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