HONG KONG, China — Over the past decade, China has been the engine of the fashion and luxury goods industry, but as dramatic market forces create a more challenging business reality and the country finds a new creative confidence, China’s role in the global fashion industry is evolving fast.
Such was the focus of ‘Fashioning China’s Future,’ the theme for an event hosted by The Business of Fashion in Hong Kong on Tuesday acting as a prelude for VOICES — an intimate, invitation-only event, which will bring together big thinkers, entrepreneurs and creatives from both within and beyond the fashion business to discuss global topics and solve real-world challenges next December in an exclusive, off-piste location just outside London, in partnership with QIC Global Real Estate.
“VOICES will be an event like no other in the fashion industry. We will explore new frontiers and challenge received wisdom about this ever-changing business through a programme of rousing talks, interactive discussions and immersive experiences designed to transform the way you think and work,” said Imran Amed, founder and chief executive officer of The Business of Fashion. “If we do our job properly, you will leave feeling rejuvenated, energised, inspired and transformed.”
Tuesday’s satellite VOICES event — hosted in collaboration with the World Economic Forum, and supported by QIC Global Real Estate, with additional support from DFS — brought together leading industry figures, such as Angelica Cheung, editor-in-chief of Vogue China; Wen Zhou, chief executive officer of 3.1 Phillip Lim; Alice Wong, president of ImagineX Group; David Zhao, founder and chief executive officer of Shangpin.com; fashion designer Huishan Zhang; and Andrew Keith, president of Lane Crawford and Joyce, in the Sky Lounge at the Upper House, overlooking panoramic views of Hong Kong.
In front of a standing room-only audience of over 150 members of the BoF community, speakers shared their expertise during a series of panel discussions. First on the agenda, the growth opportunities in China’s luxury market amid concerns over the country’s slowing economy and other destabilising forces like over-distribution, currency fluctuations and a lack of global price alignment.
"I am not that negative about the luxury business,” said Angelica Cheung, who, as editor-in-chief at Vogue China for the past 10 years, has witnessed the evolution of China’s fashion industry firsthand. “You have to put it into context. The top-tier consumer has consumed so much that they have gone through a period of indigestion. The growth is still there, but it's now a question of where the transaction or purchase will take place.”
“The downturn took place at a time when brands were experiencing problems internally,” Cheung continued. “It took years for Chinese consumers to understand these brands, but all of a sudden, everything is changing. In some cases, they become totally new brands, which is confusing for the consumer.”
For Shangpin’s Zhao, setting a fair price is key to positioning fashion brands. “The young generation wants to be treated fairly. They cannot accept price differences as before,” he said, referring to huge disparities in pricing across the world, now entirely transparent to the consumer on smartphones. But ImagineX’s Wong stressed that “the pricing issue” remains an ongoing battle. “The biggest killer is the rent, which forces retailers to mark up higher in the US than Europe.”
The solution, Wong says, is “to do a better job of talking to the customer to build loyalty. You no longer have customers that will buy 800 polo shirts at once,” she said referring to corporate gifting which is now a thing of the past. “But you can count on a customer that loves a brand."
The second touchpoint of the event focused on China’s reputation as ‘the world’s factory.’ “If you look at the value of apparel China produces, there has been a huge transformation,” said Rob Sinclair, chief operating officer at Li Fung Sourcing. “The future of China and its role in manufacturing will not diminish.” Today, the country is outsourcing and offshoring lower-skilled production to cheaper labour markets in Asia and Africa, while developing its advanced manufacturing sector at home.
Yet, while some garment and textile industry producers move up the value chain, others have struggled with issues like long-term sustainability and worker welfare. “In the past, compliance was more of a forced driver for big players. Now, it’s not about compliance for the consumer’s sake — it’s for the workforce,” said Gerhard Flatz, managing director of KTC.
“I can’t convince people that China is the best place to manufacture. Let the product speak for itself — China has global standards, not Chinese standards," asserted 3.1 Phillip Lim’s Zhou, who manufactures all of her ready-to-wear at high quality manufacturing labs in China.
Leading the discussion for the third and final subject of the event — China’s blossoming creative talent — Lane Crawford’s Andrew Keith explained: “Historically, China was about bringing talent in. Now, the consumers are driving a desire for Chinese brands and are therefore changing the fashion ecosystem.” This, in turn, has led to the birth of multi-brand boutiques carrying local designers, such as Dong Liang.
The key to making a global impact is “thinking globally but operating locally,” says Tasha Liu, co-founder of Dong Liang. “[Designers] need to combine their Western education with their Chinese roots.”
"There is a realisation now that China is a powerhouse. We are not just a manufacturing hub, but we can create unique product," said Keith. "Many Chinese designers are bringing global awareness back into China. They are utilising the ecosystem in China and we now have a creative industry that can support the talents returning home.”
"It's important," agreed fashion designer Huishan Zhang. "We've gone from no opportunities to huge opportunities and a core part of that is recognising 'made in China.' At the beginning of the brand, it is essential."
For more information on VOICES and to register your interest in attending or for sponsorship opportunities, click here.