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The China Edit | Upside to Slowing Growth, Lululemon's Challenge in China, Qeelin Expands, Faster UK Tourist Visas

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.
A look from Chinese brand Evening | Source: Brand New China
By
  • Lina Lee,
  • Lisa Wang

"The Silver Lining To China's Slowing Growth(The Business of Fashion)

From her perspective as a media personality and fashion retailer in Beijing, Hung Huang is particularly attuned to the dynamics currently contributing to China's slowing luxury sector. As Ms. Huang asserts, for many mainland Chinese, the act of buying foreign luxury goods has become linked to political bribery and maintaining mistresses. This shift in perception, coupled with a broader economic slowdown, may see homegrown brands drive greater sales, says Huang. What's more, local banks have reportedly begun to extend more small business loans to independent fashion companies, while textiles manufacturers have shown new interest in orders from smaller labels. That said, the purchasing habits of the majority of Chinese luxury customers, who remain brand-driven, are unlikely to shift towards domestic labels in the near term.

Lululemon’s Next Challenge: Overseas Growth” (Reuters)

The publicly listed Canadian active wear brand Lululemon is still tapping mid-term opportunities in North America, but investors are already demanding overseas expansion. The retailer continues to outperform apparel and sportswear peers in its domestic market, but the exponential growth of previous years has tapered off. On the ground in Asia, Lululemon is currently testing a shop model in Hong Kong and organising grassroots events like yoga classes in Shanghai. Outgoing chief executive Christine Day called 2013 a "pivotal" year for the business, during which considerable attention was paid to developing the menswear category and correcting supply chain issues. Will 2014 be a pivotal year for China expansion? Lululemon is no doubt aware that active wear as a category is not fairing particularly well in China at the moment; brands that have a much higher fashion quotient (Adidas) are outperforming early entrants like Nike.

"Luxury Jewelry Brand Qeelin Poised For Asian Expansion(Forbes)

Hong Kong fine jewellery brand Qeelin was an unlikely candidate when it was picked up for investment by Kering last December. What the 10-year-old luxury brand was missing in terms of heritage, it made up with a successful modern, Chinese aesthetic, balancing traditional design references with a light-hearted dose of whimsy. As a brand positioned mainly for the Asian market, it has also taken the unusually prudent step of planning for conservative growth: in the near term, the company will open only 6 to 7 new shops in China, adding to the 14 it currently operates globally. One important consideration for homegrown Chinese luxury players is the fact that overseas visibility is a powerful way to earn domestic recognition. To this end, Qeelin would do well to continue investing in the right retail presentation in key global cities — even if its long-term focus is Asia.

"George Osborne Opens Doors To Rich Chinese With New Visa System(The Guardian)

British chancellor George Osborne is currently leading a trade delegation through China and has already issued a statement that will no doubt please UK retailers. In Beijing, over the weekend, he proclaimed in a public address that “no country is more keen to attract Chinese investment” than Britain. The two major British policy changes he outlined are aimed at simplifying the current visa application process for Chinese visitors, who contribute significantly to the total annual sales of luxury retailers in the UK. A new 24-hour “super priority” visa service will expedite the entry procedure of Chinese business travellers; in addition, selected Chinese travel agents catering to tourists will also be allowed to process UK visa applications using the same form as for the 26-country Schengen visa, which is valid across much of Continental Europe. Expect to see a further uptick in tourist traffic to London during China's next Golden Week in January 2014.

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