The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
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.
SHANGHAI, China — In the 16 years since it was founded, Shanghai Fashion Week (SHFW) has established itself as China's preeminent fashion showcase. While Beijing and Shenzhen host their own events, Shanghai has set itself apart as the more serious among them. It is also where business reins over spectacle.
For years, organisers have focused on the development of key B2B (business to business) and D2C (direct to consumer) events that galvanise buyers, retailers and the shopping public into action. At the runway marquees in downtown Xintiandi, observers expect another season of hyper-trendy bloggers and paparazzi-ready KOLs (key opinion leaders) at the shows of Ming Ma, Samuel Gui Yang and Sirloin. Yet the fashion fraternity here remains firmly focused on commercial appeal.
From March 27 to 31, international and homegrown designers will take centre stage — Reebok's kick-off show will act as an opener for a slew of local talents, from Xu Zhi to 8on8. But more than ever before, visitors will be venturing beyond Xintiandi to attend a flurry of trade shows, showrooms, presentations and conferences. Kicking off the week will be our own entrepreneurship-focused BoF China Summit, the inaugural edition of the $100,000 BoF China Prize, designer incubator showcase Labelhood and an event by Kering and Plug and Play, which will host the K Generation Award on material innovation curated by creative agency Yehyehyeh, the latest initiative since the two launched the Kering Sustainable Innovation Award last year.
Meanwhile, six distinctive trading platforms have emerged over the years to form their own ecosystems: Mode, Ontimeshow, Tube, Not Showroom, DFO and Alter. So far, over 1,100 apparel brands from more than 30 countries have joined these trade shows and showrooms.
While some Chinese designers at Shanghai Fashion Week are beginning to gain global recognition, less is known about the catalysts and creative class working behind the scenes alongside them. To mark this edition of Shanghai Fashion Week, BoF has compiled a who's who of fashion week insiders providing designers with platforms, amplifying their audience or helping them connect with buyers and retailers.
Shanghai Fashion Week's Lv Xiaolei
“The runway of SHFW is very important, since it showcases the best of Chinese contemporary design and also attracts international names to debut their new collections, including Reebok and Vivienne Tam,” says Lv Xiaolei, also known as Madame Lu, vice secretary-general of Shanghai Fashion Week
Labelhood co-founder Tasha Liu credits Madame Lu for being a gatekeeper for the Chinese market. "She's brave to open new horizons with young people [by] encouraging and supporting us every season."
Mode Shanghai’s Jane Zhang
Mode, the official trade show of SHFW, happens far from the glamour of Xintiandi at Shanghai Mart, a behemoth exhibition hall beside the West Yan’an Road elevated highway. Now entering its ninth season, Mode has grown from nine showrooms to 27, which represent 426 brands from 28 countries.
Zhang says during the past five years she is most proud of the role Mode has played in the meteoric rise of emerging Chinese brands. “For example, the brand Junne was established three years ago, but this season its target for annual sales is 30 million yuan (around $4.46 million),” she says. But Zhang's got competition.
Ontimeshow’s Yeli Gu
Designer trade show Ontimeshow was founded by Yeli Gu in October 2014, a year before Mode Shanghai. “She was close friends with many designer brands in China and saw the opportunity, because no one was doing it then. Shanghai Fashion Week had runway shows, but they didn’t have trade shows at that time,” says Aroma Xie, a partner of Gu at Ontimeshow.
Ontimeshow's venue | Source: Courtesy
What began as 48 brands showing for just 335 visitors has exploded. In its last edition, the event welcomed 318 brands and 12,085 visitors. This season, situated in the 25,000-square-metre West Bund Art Centre, home to mainland China's leading contemporary art fair, it will showcase 400 designer brands, 49 percent of them from overseas. Xie says the event's buyers include SKP, Lane Crawford, IT, Opening Ceremony, Tmall, JD.com, Secoo and stores from all tiers of Chinese cities. The designers they present include regulars at emerging designer showcase Labelhood, such as Pronounce, Yiran Tian and Angel Chen.
“The vibe here is very fast, and the market is very hungry. It’s very open to new designers,” Xie says. "Overseas buyers might be more careful observing a brand for three or four seasons, but here new brands can grow very fast.”
Labelhood’s Tasha Liu
The seventh edition of Tasha Liu’s Labelhood will showcase 19 emerging designers at karaoke magnate and art collector Qiao Zhibing’s Tank Space, another post-industrial venue appropriated in the West Bund’s reinvention as a cultural corridor. Together with her husband — Labelhood chief executive Justin Peng — and collaborator Charles Wang, Liu founded popular multi-brand store Dongliang, whose two locations were rebranded as Labelhood in 2018.
“I hope to bring more extraordinary industry support to our young designers,” Liu tells BoF. “We also have an opening show, all modelled by Chinese fashion bloggers, to connect the garments with real consumers.”
Expanding their influence still further, this year Labelhood signed a deal with Lane Crawford to open emerging Chinese designer pop-up corners in Lane Crawford's stores in Hong Kong, Beijing, Shanghai and Chengdu. Caroline Hu is the first recipient of the opportunity, which includes a 100,000 yuan (around $14,800) scholarship to develop her designs.
Tube Showroom’s Zemira Xu
Shanghainese entrepreneur Zemira Xu is the founder of both Tube Showroom and Dia Creative Communications. Tube debuted at SHFW in October 2015, is now in its eighth season and has expanded to 11 brands showing in two spaces on the South Bund.
On opening night, brands each occupied distinctly decorated boutique hotel rooms at The Waterhouse — disco roller derby models here, a pyramid of baby crayfish there — while runway shows took place in a separate venue nearby. It's a real scene, and one that should help get buyers excited about participating brands Jewel Xing, PH5, Angus Chiang, Calvin Luo, Fengyi Tan, Short Sentence, Shushu/Tong, Sirloin, Staffonly, StevenTai and Xiao Li.
Not Showroom’s Zhang Ying
Another respected showroom is Not Showroom, which was founded in 2015 with just five brands: Boundless, Yirantian, Pronounce, Haizhenwang and Samuel Gui Yang. “Showrooms are supposed to be a conventional part of the industry,” says founder Zhang Ying, but she says that even four years ago, “there were few showrooms in China.”
Before starting not, Zhang spent a decade in London where she studied fashion design and worked in promotion for large fashion brands. Not Showroom now features 27 brands, focusing on those with “soul,” Zhang says. She believes the core thing that differentiates the platform from other showrooms “is long term cooperation.” Four years is an eternity, it seems, in the Chinese fashion industry.
“We chose Not [Showroom] because they had a stable of brands that felt in line with our own,” said Kain Picken of Ffixxed Studios. “They have a good approach and strategy in the market and are really transparent about what they are doing.”
Apax Group's Terence Chu
Former graphic designer Terence Chu founded experiential marketing agency Apax Group in Hong Kong in 1992. Since then, he has helped Fendi send models sashaying down the Great Wall of China in 2007, arranged Hermès' first fashion show in China in 2008 and paired Usher, Charli XCX and other performers with designer labels such as Sankuanz and Italian luxury brand La Perla for the first edition of Fashion Rocks, which took place at the Shanghai Oriental Sports Centre in 2016.
Apax has also partnered with SHFW to bring international brands to the Shanghai International Fashion Showcase since 2014, which this year opened with a show by New York designer Vivienne Tam. Apax Group now has 300 staff and offices in India, Italy, Beijing and Shanghai, as well as Hong Kong.
YY Jin of YYO Communications
YYO Communications is a strategic partner behind the scenes at Shanghai Fashion Week, connecting up-and-coming young photographers to independent fashion designers for the event’s backstage photography. The company was founded in 2008 by Yuan Yuan Jin — Miss YY for short.
The firm has represented some of China's top fashion photographers, including Li Qi, Sun Jun and Quentin Shih (above) on editorial shoots for publications such as The Telegraph and Vogue China, as well as helping to produce commercial shoots for brands such as Gap, Lee and Levi's. YYO also works with stylists, makeup artists and other creatives, and through its production arm, helps fashion brands with everything from their positioning to creative concepts, art direction and PR strategies.
Additional reporting by Aijing Wang.
FASHION & BEAUTY
Li Ning footwear | Source: Li Ning
Post-Pivot, Li Ning Reaps Its 10 Billion Yuan Rewards
Though Nike's latest fiscal report revealed the American sportswear giant beat its earnings estimates in Q3 and grew revenues in China by 24 percent, local player Li Ning had much to celebrate this week after its shares surged 11.4 percent on Friday to their highest since 2011. On March 22, the Chinese sportswear giant announced that it hit 10.51 billion yuan (around $1.5 billion) in revenues in 2018, and posted net profits of 715.26 million yuan ($10.68 million), equal to 39 percent year-on-year growth. Nike and Adidas beware: since launching streetwear collections and making regular appearances at New York Fashion Week, the heritage brand has made its millennial pivot with undeniable success, and isn't shying away from the Western market. (Retail Insider)
Why China’s Women Are Suiting Up
According to a report published by Alibaba-owned C2C marketplace Taobao, its women's suit sales soared by 317 percent in 2019's first quarter. The boom can be traced to runway and celebrity influences — from Saint Laurent to Lady Gaga's oversized Marc Jacobs number and local actress Yao Chen's suit-heavy wardrobe in TV drama "All is Well" — but also signals the demise of gender norms, as women seek out more androgynous and traditionally "masculine" looks, and men invest in beauty products and "feminine" styles. After Taobao published its report, the hashtag "Women will be more manly than men in 10 years" was viewed over 600 million times and discussed 582,000 times on Weibo. The government has also played a part, with Beijing recently introducing new sex discrimination policies banning potential employers from inquiring about a woman's marital status or pregnancy. (Sixthtone)
British Fashion Council Heads East For SHFW
Buyers and consumers take note: China will be seeing much more of British talent this coming season. As a part of its goal to help British brands thrive in the Middle Kingdom, the British Fashion Council will launch standalone showcases for Roksanda and Peter Pilotto with Ontimeshow trade show as a part of this week's Shanghai Fashion Week festivities. Meanwhile, British-based brands from Jamie Wei Huang to BoF China Prize finalist Xu Zhi will make runway appearances, and showrooms will see emerging talents such as Asai, Danshan, Feng Chen Wang, Gayeon Lee, Linda Farrow, Marta Jakubowski, Teatum Jones and Xiao Li. (BFC)
TECH & INNOVATION
Watson China | Source: Wikimedia Commons
Chinese Giants Eye Drugstore Chain Shares
According to people familiar with the matter, Singapore's Temasek Holdings will let go of its 10 percent stake in Hong Kong-based drugstore chain Watsons for $3 billion, and Tencent and Alibaba are potential buyers. Watsons operates over 3,000 stores in China, but much of its appeal lies overseas — it also owns British chain Superdrug and is the largest health and beauty store operator in Asia and Europe. Considering the stake's potential to boost both companies' omni-channel offerings in China and beyond, they're not the only parties allegedly interested — the Abu Dhabi sovereign fund, Mubadala Investment Co, is also rumoured to be in the mix. (Techweb)
WeChat's Fintech Catch-Up Pays Off
Tencent's mobile payments solution WeChat Pay's 38.12 percent market share was still lagging behind Alibaba-owned Alipay's 50.42 percent in 2016, but Tencent won't settle for second place. As announced in Hong Kong on March 21, WeChat's payment service is now accessible in 49 countries and regions and can support 16 currencies in direct transactions. According to WeChat, 2018's average monthly cross border transactions increased by 500 percent, while average monthly transaction amounts increased by 400 percent. The number of WeChat Pay service providers increased by 300 percent and supporting merchants increased by 700 percent year on year. (Xinhua)
Behind the Success of China’s First Global App
Bytedance's hit short video platform Douyin, known in the West as Tik Tok, has succeeded in becoming the first Chinese app to truly go global — after quadrupling its monthly install figure from 20 million to 75 million in a year, Tik Tok's in-app purchases reached 350 percent year-on-year growth in December 2018, driven by virtual gifts and brand collaborations (with the likes of Chanel on Douyin's end, no less). Rather than choosing between simply replicating Douyin overseas, adapting to Western markets or acquiring an overseas player, Bytedance opted for all of the above, leveraging successful marketing tactics from its experience in China, partnering with local influencers Jimmy Fallon and Khloe Kardashian and acquiring Muscial.ly for almost $1 billion in November 2017. Although Tik Tok is facing its fair share of challenges — from low engagement (29 percent compared to Instagram's 95 percent, according to Apptopia) to content supervision and bullying in countries such as India — Bytedance's strategy proves valuable for platforms breaking out of their native markets. (Walk the Chat)
CONSUMER & RETAIL
Shenzhen | Source: Robert Bye
A Tale of Two Fashion Cities
Shenzhen Fashion Week launched on March 14, unveiling 80 shows at three venues where over 200 designers showed their wares. But more so than Shanghai's arty design buzz, China's Silicon Valley is upgrading the commercial and retail backbones of the local fashion industry, echoing the innovative dialogue of Beijing's Greater Bay Area vision. Instead of traditional runway shows, brands such as Marisfrolg have expanded to launch design collectives where consumers can find emerging designers such as BoF China Prize Finalists Xu Zhi and Pronounce, as well as a "shopping assistant" that delivers personalised selections to shoppers' doors. Elsewhere, double-sided smart mirrors harnessed facial recognition and AI to suggest designer ensembles for users. "Shenzhen's greatest advantage is its industry. The pragmatism of the city is reflected in its fashion industry," Leng Yun, an independent fashion commentator and columnist, told BoF. (BoF China)
China’s Counterfeit-Conscious Have a New Secret Weapon
While watchdog The Counterfeit Report estimates that China produces 80 percent of the world's counterfeit goods, its luxury consumers are increasingly adept at avoiding fakes, accounting for the rise of authentication services. Local companies Isheyipai and Zhiduoshao are going up against bigger players Vestiaire Collective and Alibaba's Xianyu to provide users with authenticators trained in China, the US and Japan. However, not all platforms are to be trusted, and some platforms have been found to fake reviews to sell counterfeits. Although luxury brands aren't openly supporting local authenticators, it would be unwise to ignore the demand altogether. The authentication market will only get more crowded as value-hungry shoppers flock to buy second-hand luxury goods — which experts anticipate will see rapid growth — despite accounting for a mere 3 percent of the luxury market at present. (Financial Times)
Maybelline Accused of False Advertising, Estée Lauder Sues NetEase
It's been a drama-filled week in China's e-commerce sphere for New York's beauty stalwarts. On March 18, Beijing News reported that Tmall and JD.com consumers complained of "false advertising" by Maybelline New York. Tmall shoppers said that freebies received post-purchase were not as promised in online promotions, and JD.com consumers attempting to take part in a flash sale found that the promotion had already ended, although this had not been reflected on Maybelline's storefront. Meanwhile, the Estée Lauder Group successfully sued tech company NetEase's e-commerce platform Koala for 1.2 million yuan (around $178,600) due to Koala's infringement of Mac Cosmetics's trademark rights, after the China Consumer Association found in February that products sold by the platform were fake. (Beijing News)
POLITICS, ECONOMY, SOCIETY
Christmas shopping in Milan, Italy | Source: Getty
China and Europe's Rally For Multilateralism Against US Protectionism
On Saturday, Italian prime minister Giuseppe Conte officially signed onto China's vast Belt and Road infrastructure project, against the warnings of European and American allies. This makes Italy the first G7 nation — representing over 30 percent of the global GDP — to do so, calling into question whether Chinese investment and trade will lure the likes of France and Germany to follow suit. However, European leaders have been vocal that they won't let this happen unless China meets demands for reciprocity, and the New Silk Road becomes more of a two-way street. On Tuesday, leaders from China, France, Germany and the European Commission agreed to work together in seeking "mutual trust" and fairer global trade rules, after President Xi Jinping met with French President Emmanuel Macron, German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker in Paris. In the lead-up to an EU-China Summit slated for April 9, Macron stated that "Our common will is to avoid ... new trade conflicts and isolationist policies" in an apparent snub to the US. (New York Times, AP)
American Universities Cut Ties With China
Some of the US' most esteemed institutions are taking heed of Washington's promulgation of suspicions about China. The likes of Stanford University and the University of Minnesota have quietly cut their ties with telecom giant Huawei and in the latter case, the non-profit organisation Confucius Institute — ties formed through projects such as the Huawei Innovation Research Programme, a global initiative whose partners include Yale and Harvard. Although efforts to cut Huawei's ties to other American academia are gathering steam, there are mixed feelings on campus as staff acknowledge that Chinese students are growing concerned for their futures at the institutions. (SCMP)
Chinese Netizens Find Solace in Positive Praise
Amid a hater-heavy online climate, China's web users are forming subcultures on platforms such as social networking site Douban to provide messages of optimism and positivity in reaction to even the most banal content. On the site's "Praise each other" forum, a user received a slew of positive comments for publishing a photo of burnt breakfast sausages with the caption, "How are these sausages I fried?" Since 2014, this community of now over 100,000 people has formed "the last sanctuary of the Chinese internet" through "compliment squads" that have also found homes on the likes of WeChat and QQ and are sending positive messages to users suffering from depression or anxieties about their sexual identity. The phenomenon has become so popular that people are now paying for it, as Taobao stores have begun advertising a "praising service," priced from 5 yuan up to 200 yuan ($0.75 to $30). But can money really buy happiness for China's pressured millennials? (SCMP)
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