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.
SHANGHAI, China — An upcoming release by H&M will include sweatshirts embroidered with dragons and cranes, and a boiler suit emblazoned with the Chinese characters for "Kung Fu." But don't be fooled into thinking this is just the latest example of a big brand dabbling in cultural appropriation. In fact, it is quite the opposite.
Earlier this week, the Swedish fast fashion giant announced its 45-piece collection with Angel Chen, marking its first collaboration with a Chinese designer. The 24 womenswear pieces, 12 menswear items and nine accessories, ranging between 159 and 1490 yuan (around $23-216), will hit selected stores in September.
For global brands hoping to get ahead — or in some cases stay afloat — in China’s cutthroat retail market, collaborating with local talent has become an important way to tap into the region’s big spenders. When brands consider the broader marketing menu of limited-edition items released during Chinese holidays and other tried-and-tested activations, collaborations are an increasingly popular option.
But what exactly do global brands aim to achieve with co-branded collections, and do their efforts really pay off in China?
Selecting the right designer can make or break a collaboration. While this deal marks the first time a Western fast fashion giant has linked arms with a homegrown Chinese designer, it came as no big surprise to industry leaders in Beijing and Shanghai. H&M’s bid on Chen highlights its commitment to targeting a very coveted audience.
Designer Angel Chen and her collaboration with H&M | Source: Courtesy
"It makes perfect sense," said creative consultant Dan Cui, formerly the fashion director of GQ China and editor in chief of GQ Style China. "If I had to choose a current, commercial and symbolic Chinese designer to work with H&M, Angel is one of the first who comes to mind."
For H&M, the Angel Chen collection marks a turning point in how the world’s second-largest clothing retailer looks to engage with its Chinese audience.
China has become H&M's fourth largest market — according to the group's financial results announced in April, sales in the mainland rose 16 percent for the quarter ended February 28. However, Forever 21's recent exit from the mainland was yet another wake-up call for remaining foreign players, clamouring for relevance among cheaper and savvier local rivals.
“Since we entered the Chinese market, the brand has been looking forward to working with Chinese designers to bring elements of local fashion and design to our shoppers and engage with shoppers who are from or admire the local culture,” said Magnus Olsson, H&M’s country manager for Greater China.
It’s clear that the brand is looking to supercharge its China strategy: after seeing success with H&M’s presence on Alibaba-owned e-commerce site Tmall, sister brand & Other Stories is launching on the platform this fall.
Chen’s collaboration has been configured to target Chinese millennials, known locally as post-‘80s and post-‘90s generations. In addition to online and offline stores in mainland China (including H&M’s Tmall flagship), the collection will only be available in countries with large Chinese populations: Hong Kong, Taiwan, Singapore, Malaysia and Canada, in addition to e-commerce channels in the Philippines and Macau.
Chinese musician Lay Zhang and supermodel Liu Wen — global stars with a staggering combined Weibo following of 71.6 million — have also been tapped to model for the collection and attract millennial eyeballs.
Tapping into ‘Guochao’
Cui agreed that linking up with homegrown design talent is an opportunity for brands to generate goodwill among younger Chinese consumers. In particular, he cites the recent trend of guochao — or national pride, referring to nostalgic and traditional Chinese elements manifesting in casualwear and streetwear collections, with Chen's work as a prime example. "Brands can use guochao to build relationships with younger audiences, and picking the right designer to relay that message to consumers is critical" he said.
Enter Chen. Even before she launched her brand in 2014, the Shenzhen-born, Shanghai-based Central Saint Martins graduate garnered global attention for her evocative cross-cultural aesthetic. Her designs — colourful, streetwear-tinted reimaginings of Chinese legends and tribal art — pushed Chen to the forefront of Shanghai’s then-nascent web of emerging designers, and onto the racks of stockists Lane Crawford, Luisa Via Roma and H. Lorenzo.
This has made the fashion industry more open minded.
“I’ve always found different inspirations in Chinese culture and presented them in my work through a modern lens, so I’m guessing that’s why H&M chose me as their first Chinese collaborator,” said Chen, who sees the move as a win-win. “While the Chinese market is maturing, they’re validating my skill and perspective and I’m able to reach a wider audience through their commercial channels.”
This may be H&M's first Chinese designer collaboration, but other global brands have already been there and done that. Chen herself has partnered with the likes of Sony, Swarovski, Airbnb and Kiehl's, while streetwear favourite Feng Chen Wang has worked with Levi's and has an ongoing partnership with Converse. Last summer, menswear designer Xander Zhou worked with South Korean eyewear brand Gentle Monster on sunglasses and a raincoat.
Feng Chen Wang for Converse | Source: Feng Chen Wang
“I don’t think it is a trend that will pass,” said Feng Chen Wang’s eponymous designer. “Instead I think it is a new way that shows how we are now connecting to each other across the world… This has made the fashion industry more open minded, and it is important that they open their doors to all different designers who can offer their own perspective from a range of backgrounds and life experiences.”
H&M’s move cements the pattern by indicating that such collaborations are a viable move for mass market brands and the industry at large. It also presents an alternative to the current norm of hiring Chinese celebrities and influencers to bring in sales.
“[However], none of the top 10 fashion collaborations by social engagement are with Chinese designers,” said Liz Flora, editor of APAC research at Gartner L2. “We have data on collaborations for luxury brands, [all of which are with] an artist, foreign brand, or Chinese celebrity/KOL.”
For years, China has been seen as a country of consumers, but designer collaborations indicate that some brands are recognising its creative capital. “As Chinese designers receive more attention on a global level, it benefits our creativity and motivates us while shining a spotlight on our culture,” said Chen. “I hope this message not only reaches consumers at home but Chinese people around the world.”
Later this year, streetwear label Sankuanz will release collaborations with Timberland, Herschel Supply Co and 88Rising after working on numerous drops with Puma. However, its creative director Shangguan Zhe reckons there's still a long way to go. "I don't think Western brands have considered Shanghai a creative capital, at least not yet," Zhe said. When asked how brands can improve their ways of going about such partnerships, he recommended they "increase mutual understanding and exchange."
The Puma x Sankuanz 'Cell Endura' sneaker | Source: Puma
When a major brand taps an emerging designer, seeing the designer as an equal partner and empowering them to represent their culture can pay off for both parties. “H&M’s production and design teams gave me a lot of support and commercial guidance,” Chen said. “The consensus was that we were on the same page and shared the same values,” she added, mentioning that the brand harnessed its resources in sustainable textiles to help her develop a pair of recycled nylon mesh tights.
While pursuing a collaboration with Chinese designers can raise awareness for global brands in the oversaturated market, it’s no shortcut, and investing in research, development and local amplification is crucial, as always. “Design is borderless... regardless of which country the designer is from, it’s an exercise of assessing their abilities and the market potential,” said Cui. “For a collaboration to be a win-win, it’s really about digital activations, and the resources and attention that brands are willing to invest.”
Like all partnerships, creative collaborations rely on chemistry rather than a formula for success. “It’s not something brands can imitate,” he added. “A successful collaboration needs a long-term strategy and synergy, be it brand positioning, development or between internal personnel. I’ve seen too many brands fail at this.”
Brands should do in China what they would also do elsewhere… which of course includes collaborating with Chinese creatives.
For a giant like H&M, a single 45-piece collection released in selected Chinese-dense locations is unlikely to push the needle where revenues are concerned. Whether the move succeeds as a marketing exercise in engaging China’s discerning young shoppers relies upon the brand’s commitment to such projects in the long run, rather than it being a flash in the pan. As fast fashion giants find it increasingly hard to provide the novelty expected of them by local consumers, only collaborations with longevity and depth will leave an impression and be worth the investment.
Even big Chinese brands can hamper the success of their collaborations when they place the onus on marketing. “What both brands need more, at the end of the day, is to consider the meaning behind the products, and how the parties’ brands can benefit in the long run,” said Cui.
The Xander Zhou x Gentle Monster raincoat collaboration | Source: Gentle Monster
For global players without sufficient resources to execute a 45-piece collection à la H&M, it’s time to get creative. “Collaborations are a great way to engage with the market, but it’s not the be all and end all,” said Chen, who has also worked with Lane Crawford and H. Lorenzo on designing art installations and window displays. “Most Chinese designers, when compared to huge companies like H&M, are tiny. Because of this, we have the freedom to express our inspirations and creativity.”
Lastly, Xander Zhou reckons that brands should stop assuming that Chinese consumers will only engage with overtly Chinese design and marketing. “When I see brands doing a special Chinese New Year edition of something, I wonder if they really understand whom they are selling to,” Zhou told BoF. “The younger generation in China does not need to be wooed with Chinese characteristics.”
“Brands should do in China what they would also do elsewhere… which of course includes collaborating with Chinese creatives.”
Additional reporting by Queennie Yang.
FASHION & BEAUTY
Christian Dior Couture's Chief Digital Officer Jens Riewenherm | Source: Dior
Christian Dior Couture’s Chief Digital Officer: China Is Our Highest Priority
On July 19, Christian Dior Couture's Chinese website quietly launched a full range of e-commerce. It's still not the norm for luxury brands in China, who usually partner with one of the country's giant platforms to launch e-commerce here. "China is a key market for Dior. Because of the maturity of digitalisation here, it has the highest priority for us. We fully recognise the uniqueness and differences of China's digital environment, and recognise that Chinese consumers are more likely to use digital and mobile phones," the brand's Chief Digital Officer Jens Riewenherm told BoF China in an exclusive interview. Moving forward, Riewenherm plans to include China in his global digital blueprint as much as possible. (BoF China)
Fosun-backed Wolford Results Show Slight Improvement
High-end hosiery and bodywear company, Wolford, which is listed on the Vienna Stock Exchange, said its revenues fell 8 percent year-on-year to the end of April, to €137.22 million. Its operating loss (EBIT) showed a slight improvement, narrowing from €9.22 million in the previous year to €8.98 million, with its net loss also narrowing to €11.1 million from €11.53 million. For future growth and profitability, Wolford, which is majority-owned by Chinese investment company Fosun International, is looking to Chinese expansion. The company is expecting to generate positive operating earnings again in the 2020/21 financial year. (Fashion Network)
K-Beauty Loses Steam in China
After almost a decade of dominance in the Chinese market, the popularity of Korean beauty products appears to be fading, with beauty and cosmetics exports from Korea to China growing 20 percent year-on-year in 2018. What may appear to be a healthy growth rate is actually a sharp drop from the 66 percent growth rate enjoyed over the past five years. A turn from younger consumers toward domestic and Japanese brands is contributing to K-Beauty's downturn, with Chinese brands becoming more competitive in the lower end of the market (previously dominated by Korea), and Japanese brands finding traction with a focus on authenticity, self-confidence and self-care in their advertising campaigns. (Jiemian)
TECH & INNOVATION
Alibaba's B2B Trading App | Source: Alibaba
Alibaba Opens Platform to US Sellers
Alibaba.com, Alibaba's original marketplace, originally designed to help Chinese suppliers reach overseas customers, is opening its platform to manufacturers, wholesalers and distributors in the US which, until now, were restricted to sourcing goods on the site. The new channel aims to allow as many as 30 million small and medium-sized US businesses to sell and source on the site, helping them access the $23.9 trillion global B2B e-commerce market. Alibaba did not elaborate on the timing of the move, or its relation to ongoing trade tensions between China and the US, but access to Alibaba.com's network of 10 million business buyers in over 190 million countries should be seen as a boon for US companies. (Alizila)
Google Abandons China, Again, Kinda
Google Vice President of Public Policy Karan Bhatia has told a Senate Judiciary Committee hearing that the tech giant's maligned "Project Dragonfly" — a search engine for the Chinese market that would have complied with the country's strict censorship regulations — has been "terminated." The potential search product caused a backlash among Google employees when it was revealed by leaked documents almost a year ago. Though Google shut down its China-based search engine in 2010, it still operates in China in the areas of AI, cloud computing, hardware construction, app development and advertising. Google's tie ups in China have been under further scrutiny, with conservatives in the US criticising the company's perceived closeness with Beijing. (BuzzFeed)
China’s New Nasdaq-Style Board Launches with 25 Tech Companies Listed
Initial trading on Shanghai's Star Market, a tech-heavy Nasdaq-style board, has been a rocky ride. On its first day of trading, some shares surged as much as 520 percent. Frenzied buying more than doubled the board's total capitalisation from 225 billion yuan to 529 billion by the end of the day, minting three new billionaires in the process. Day two saw significant contraction with all but four listed companies falling as investors took profits from opening day gains, erasing about 9 percent of the total market cap. It remains to be seen whether Star Market will gain enough traction to lure high-profile Chinese tech IPOs back to their homeland. (TechCrunch)
CONSUMER & RETAIL
Livestream beauty star Austin Li | Source: Taobao
Department Store Gives Sales Assistants Livestream Training
Two of the most famous livestreamers in China, Austin Li (李佳琦) and Viya (薇娅) are former sales assistants who have leveraged their love (and knowledge) of beauty into lucrative KOL careers. Alibaba affiliated department store InTime has launched a programme giving their sales assistants the chance to follow in their idols' footsteps by livestreaming through Alibaba's Taobao platform, equipping participants with data analytics tools that predict what products are likely to be in high demand based on weather, holidays and other statistics. This is a win-win for InTime and its employees, with sales for the recent 6.18 festival up 133 percent and sales assistants getting the opportunity to pursue their livestreaming dreams. (Ciwei Gongshe)
Chinese Government Move to Further Promote Domestic Consumption
An inter-ministerial joint conference will be set up to promote consumption by co-ordinating efforts to expand and upgrade personal consumption, analyse consumption trends and propose new consumption-related policies. The conference will be led by the National Development and Reform Commission (NDRC), and composed of 26 ministries and departments, including the Ministry of Civil Affairs, the Ministry of Commerce and the People's Bank of China. This further move to strengthen domestic consumption comes days after robust retail sales figures for June, up 9.8 percent and beating analyst expectations. China's government is increasingly relying on its own consumers to weather a long-term economic slowdown and trade war woes. (PRC State Council)
Chinese Consumers Retain Strong Desire for Imported Products
A survey from China's Ministry of Commerce showed 24.1 percent of the 1,059 surveyed consumers said they planned to buy more imported products, in particular food, maternal and infant products, cosmetics, watches, glasses and jewellery. Meanwhile, 9.7 percent of the 945 retail and wholesale enterprise respondents said they would increase consumer product imports in the next year, 2.5 percentage points higher than those planning to decrease their imports. China's imports totalled 6.72 trillion yuan (about $977 billion) in the first half of this year, up 1.4 percent year-on-year. (Xinhua)
POLITICS, ECONOMY, SOCIETY
Illustration by BoF
China Surpasses US on Fortune Global 500 List for the First Time
Fortune's latest Global 500 list, ranking the world's largest corporations by revenue for fiscal year 2018, sees 129 entries from Greater China, with 121 entrants from the US. China and the US are between them home to eight of the top 10 most profitable companies in the world, with Walmart maintaining its number one ranking. In his foreword to the August issue of the magazine, Editor-in-Chief Clifton Leaf wrote, "Twenty years ago, there were just eight Chinese companies on the Global 500 […] China's government keeps investing in the future; the US, not so much." (Fortune)
Pop Fan Clash Shows Inter-Generational Divide in China
An epic generational clash has been raging on Chinese social media between the older fans of 40-year-old singer, Jay Chou and the younger, Gen Z followers of 21-year-old vocalist, Cai Xukun after a user on social network Douban questioned Chou's current star power. This prompted the Taiwanese singers' loyal fans to digitally jump to his defence, mounting a campaign to lift Chou's rankings in Weibo's "super topics" index to number one, thus dethroning Cai. On Sunday, their campaign bore fruit, with Chou posting a screenshot on his official Weibo account showing his number one "super topics" ranking and proving the power of digital in China doesn't just lie with its youngsters. (Sixth Tone)
Beijing Says City’s Air Is Cleanest on Record
Beijing reported its lowest level of air pollutants in the first half this year since the city started recording related data 35 years ago, reflecting years-long efforts to combat air pollution. Talk in Chinese cities often revolves around the daily levels of PM2.5, tiny particles that can easily be inhaled. Beijing's levels of these particles dropped to 46 micrograms per cubic meter in the first half of this year, down 13.2 percent, according to data from the Beijing Municipal Ecological Environment Bureau. China has seriously stepped up efforts to meet pollution control targets nationwide, with the capital as its standard bearer. (Caixin)
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