After a year-long hiatus in which Shanghai Fashion Week was hampered by China’s harshest Covid-19 lockdowns, the event staged a full return on Mar. 23. Running for 10 days, the main venue at Xintiandi and young designer platform Labelhood welcomed back the likes of Shuting Qiu, Mark Gong, Staffonly and Fabric Qorn. Beyond the many established names on the runway, buyers looking for edgy newcomers were able to physically visit showrooms Tube, Mode, Dada and others once again.

The season is a belated 20th anniversary for Shanghai Fashion Week, which last year struck up a partnership with TikTok’s sister platform Douyin to present collections in a hybrid, pared-back format during lockdown. But this edition was reinvigorated with events like the announcement of the next instalment of Kering’s sustainability-minded K Generation award and a showcase by YehYehYeh on the new Asian fashion system.

While fashion week felt optimistic to many, it clearly wasn’t a return to business as usual. A wave of Covid infections had swept through China in December and January, leaving multiple brands with production issues. The Yu Prize, another key channel for discovering talent in China was reinstated, but tellingly, instead of opening its application intake as it usually does in the spring, organisers delayed it until the autumn when fashion week is expected to return with a bang in October.

Given the scale and intensity of recent disruptions, it was to be expected that some favourites were missing from the Autumn/Winter 2023 show calendar. Among the absentees were Ruohan, Pronounce and Chen Peng who had ventured abroad last year while China was closed off. But only designers who had sufficient resources, international networks and know-how could afford to pivot quickly to show in Europe or the US. This meant there was a gap which gave designers with untraditional backgrounds and unconventional playbooks a chance to shine.

Whereas a previous wave of Chinese designer brands had founders who generally spent time in the West, studying at prestigious institutions like London’s Central Saint Martins, The Royal Academy of Fine Arts Antwerp, or Parsons in New York, a new crop of brands is training at home and looking for domestic routes to exposure and validation.

Instead of launching their brand overseas from a graduate show, which then gets picked up by a prominent Western retailer helping them to build momentum, and then coming back to Shanghai Fashion Week to do a show — Shushu/Tong, Feng Chen Wang and Windowsen are all examples of this — other Chinese brands are focused on being accomplished retailers or going direct to consumers in China first.

“A lot of brands can become established now in China and they don’t need to have global recognition,” said Julio Ng, the Shanghai-based executive director of international showroom Seiya Nakamura 2.24. “They first build their foundation here and stabilise, and only when the time is right do they go out overseas [when] there’s already a following.”

Pet-Tree-Kor, a Shanghai-based menswear brand with gorpcore elements, set up by three friends Liu Xinyu, Qiu Wanqing and Dong Hongyuan, is an example of what this new cohort looks like. Launched in 2021 during the height of the pandemic, the brand caught on thanks in large part to Dong’s video blogging of his outfits on social media platforms Bilibili and Xiaohongshu. Though he has no formal fashion degree, Dong was able to build a fanbase with his discerning eye and deep product knowledge.

The founder of the Beijing multi-brand boutique Anchoret, who has bought Pet-Tree-Kor since its first collection, said the response from domestic consumers has been extraordinary. “The fans are very loyal. It was pretty crazy and better than what we expected with full price 100 percent sell-through,” said On Kit Wong, adding that Anchoret doubled its buy for the second season.

Pet-Tree-Kor secured around 10 stockists in China before starting to sell internationally on Ssense. The excitement surrounding it is such that a modest secondary market has formed for its pieces on platforms like Xianyu, sometimes exceeding retail prices. But before the brand proactively embarks on international sales, it has more work to do expanding its footprint domestically, its founders say.

“We grew up in the Chinese environment, so we have a relatively in-depth understanding of the Chinese market [which is why] we intend to consolidate [that]… first,” said Pet-Tree-Kor co-founder Qiu Wanqing.

However common such views may now be, some industry leaders expect attitudes to soften once normal business flows resume between China and the rest of the world.

“It’s true that there’s a more insular outlook in some quarters — let’s be honest certain young brands were always a better product fit for the domestic market anyway — but some designers only made an extreme shift to the domestic market out of necessity. It won’t be a permanent shift for everyone now that we’re post-pandemic,” said Shaway Yeh, a veteran editor and long-time supporter of local talent who founded sustainable fashion consultancy YehYehYeh.

“China’s huge so it made sense for everyone to pause to make sure they were getting the most out of their home market and some will stay focused on that. But I also know young Chinese designers who are excited to re-engage or start their big push abroad because they recognise that siloing themselves away in China goes against a cosmopolitan brand identity or limits their commercial potential,” she added.

Fax Copy Express is another up-and-coming Shanghai brand that created a strong following while fashion week was unable to operate normally. Launched in June 2020, the brand prioritised direct-to-consumer channels such as their own shop on Taobao. Though the Alibaba-owned platform has a reputation overseas mainly as a destination for mass goods and fast fashion, it provided the brand with a way of selling its tailored and neutral 90s-influenced womenswear at a contemporary price point, mostly around the $150 to $800 mark.

Nick Wang, the label’s founder, said the success it found thus far is down to an increasingly confident local shopper who is proud to seek out and wear homegrown labels. “More and more excellent Chinese brands have emerged, so Chinese consumers’ overall recognition of Chinese local brands has increased,” Wang said. It has been picked up by some overseas stores like GR8 and Addition Adelaide in Tokyo as well as Ssense but 80 percent of its business remains domestic.

This underscores the fact that there are wider implications for young Chinese brands finding new routes to market. Since some are now operating outside the traditional talent scouting grounds — beyond the usual pool of Chinese graduates from western fashion schools, local fashion week incubators and prizes — international buyers will need to cast their nets wider to find them. It’s not just niche boutiques in Tokyo, London and Milan that compete to find the coolest young designer labels from around the world, including those from China. Many large e-tailers and department stores rely on them to spice up their offering or differentiate themselves.

Outside global wholesale networks, young designer competitions like the LVMH Prize might also be compelled to broaden their search for Chinese nominees and global brands that use local designer collaborations as a marketing tool to achieve greater returns in the China market will probably do the same.

In recent years, fast fashion players like H&M and Zara have partnered with the likes of Angel Chen, Susan Fang and Calvin Luo while Feng Chen Wang has been tapped by Nike and Levi’s among others, and Ugg has supported a number of young designers, the latest being Victor Wong and AlienAnt. Not only do these capsule collections help localise global brands’ overall merchandise mix but they also provide additional cool factor and a way to seamlessly tap into the guochao national pride trend.

This is one way for global players to potentially claw back market share from Chinese competitors when Chinese consumer interest in local design is on the rise.

A recent study from Ruder Finn and Consumer Search Group, which surveyed 2,000 affluent respondents in mainland China at the end of last year, found that 54 percent said they would increase their purchase of Chinese designer fashion brands in the next year. For those in tier-one cities, confidence in buying a larger share of local labels was even higher at 63 percent.

“It shows that [Chinese shoppers] have been processing and digesting, instead of [just] following [others],” said Seiya Nakamura’s Ng.

THE LATEST NEWS FROM CHINA

时尚与美容

FASHION & BEAUTY

Inditex Earnings Hurt by “Challenging” China Market

Asia was an outlier for Zara-owner Inditex last year, the only region where profits fell as China faced Covid-19 lockdowns, while profit ballooned in the Americas. Nonetheless, the company’s chief executive commented that the country “will remain a core market for Inditex.” (BoF)

Capri Is Latest Luxury Group to Send Top Brass to China

Capri Holdings chairman and CEO John Idol follows executives from other major luxury companies who were unable to visit the country for three years. Kering Group CEO François-Henri Pinault, Gucci CEO Marco Bizzarri, Prada Group chairman Patrizio Bertelli and son Lorenzo Bertelli, and the group’s CEO Andrea Guerra touched down in China earlier for market visits, store tours and meetings with local partners. (Press Release)

Shanghai Fashion Week Returned After Two-Season Hiatus

China’s most prominent fashion week made a comeback on Mar. 23, after pausing physical shows for a year due to zero-Covid lockdown measures, and will run until Mar. 31. Meanwhile, the Yu Prize, which scouts for up-and-coming designer talent, announced it would shift its application intake from its usual spring session until the autumn. (Press Release)

W Magazine to Debut New Edition for Chinese Market

The deal is a partnership with MC Style Media, the publisher of Marie Claire China. The first print edition will go out in April and subsequently be released on a bi-monthly publishing schedule with Mix Wei at the helm as editor-in-chief. (BoF)

China International Jewellery Fair and CHIC Return

Large trade shows are being reinstated such as the key jewellery fair held in Beijing from March 16 to 20. Meanwhile, CHIC is set to kick off Mar. 28 to 30 in Shanghai. The fashion and textiles event attracted 1,250 registered exhibitors putting it back at pre-Covid levels. (Sohu, Press Release)

消费与零售

CONSUMER & RETAIL

Chinese Retail Sales Rise 3.5% in First Two Months of 2023

Retail sales in January and February totalled 7.7 trillion yuan ($1.12 trillion), reversing three months of decline, according to data from the National Bureau of Statistics. Meanwhile, travel also showed a rebound with domestic trips during the Lunar New Year holiday rising 23.1 percent year on year. (Xinhua)

Anta Sports Revenue Rose 8.8% in 2022

China’s leading sportswear firm reported an increase in 2022 annual revenue to $7.81 billion (53.7 billion yuan) despite the country enduring its strictest Covid measures during that time. Fila was its only brand to see a revenue decline. (Anta)

Chinese Shoppers Warm to Buying Luxury Online, Survey Shows

Ruder Finn’s latest China Luxury Forecast found a significant rise in the acceptance of shopping luxury online. The firm’s survey of 2,000 affluent mainland Chinese respondents found 30 percent said they were open to buying high-end goods via e-commerce compared to 10 percent in 2021. (Press Release)

科技与供应链

SUPPLY CHAIN & TECH

Tech Giant Alibaba Group to Split Into Six Units

The most significant shakeup of China’s biggest e-commerce firm will split the company into separate business units, with each exploring potential IPOs, and effectively dismantles the empire that its billionaire founder Jack Ma built. Ma, who has kept a low profile ever since the halting of Ant Group listing following his criticism of Chinese regulators, returned to mainland China after a year-long absence from the country. (WSJ, Alizila)

TikTok Chief Executive Gets Grilled by US Congress

Shou Zi Chew appeared before a congressional committee to face questions on the app’s connection to the Chinese government and how it collects and handles American user data. The popular social media platform is facing renewed threats of a ban in the US unless its Chinese parent ByteDance sells the platform to an American company. However Beijing has said it “firmly opposed” a sale. (BoF, NYT)

China Textile Exports Plunge Nearly 20% in First Two Months of 2023

China exported $40.8 billion worth of textiles, apparel, and clothing accessories in the first two months of the year, a decline of 18.5 percent compared to the same time a year ago. Countries including India, Mexico, Vietnam, Cambodia and the Philippines are courting companies who are looking to diversify away from China with a raft of subsidies, tax breaks and other perks. (Fibre2Fashion, WSJ)

US Halted $30 Million Worth of Fashion Imports Last Year

The shipments were mainly sent from China and Vietnam but were halted at US borders last year in compliance with the Uyghur Forced Labor Prevention Act. The regulation, which follows previous crackdowns on imports of cotton and other products linked to the Chinese region of Xinjiang, came into effect in June of last year. (BoF)

政治,经济与社会

POLITICS, ECONOMY & SOCIETY

Xi and Putin Meet in Moscow Summit

Chinese president Xi Jinping travelled to Moscow to meet with Russian leader Vladimir Putin. The meeting demonstrates Beijing’s commitment to ties with Moscow in the face of a Washington-led alliance supporting Kyiv, as the war Russia waged on Ukraine continues into its second year. (CNN)

Hong Kong Fills Up With Busy March Events Calendar

After struggling under zero-Covid measures, Hong Kong is witnessing a reinvigoration of activity in the city with the return of large-scale events including Art Basel, music festivals Clockenflap and Creamfields, the Rugby Sevens tournament and two financial summits. (Reuters, NYT)

Chinese Authorities Detain Five Staff of American Investigations Firm

Chinese authorities raided the Beijing office of the Mintz Group, an American corporate investigations firm and detained all five of its Chinese employees. The firm specialises in background checks, fact gathering, and corruption investigations, operating 18 offices globally. (NYT)

Shanghai Overtaken by Los Angeles in Global Ranking of Financial Centres

China’s economic powerhouse fell to seventh place but it was the highest scoring mainland Chinese city as neither Beijing nor Shenzhen made the top 10. The top five spots remained unchanged and are New York, London, Singapore, Hong Kong and San Francisco. (Bloomberg)

China Decoded wants to hear from you. Send tips, suggestions, complaints and compliments to our Senior Correspondent tiffany.ap@businessoffashion.com.