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 — As soon as a new user registers on Chinese sneaker trading platform and social media community app Poizon, they are tempted to spend.
After selecting specific interest categories as they curate their own "explore page," a new Poizon user will receive a "newcomer’s gift": a set of vouchers worth 520 yuan (around $73.5) to spend on the app’s extensive marketplace including — but not limited to — sneaker styles from Air Force 1s to Yeezys. This is just one of the many ways tech companies are getting Chinese men to shop.
While apps like Xiaohongshu and Meipai have established themselves as the go-to channels for China's influencers and brands to engage with millennial female consumers, their male counterparts have been left behind. But as the mainland's menswear market continues to grow, buzzy new tech platforms like Poizon have become the place for China's male consumers to purchase their wares. Poizon is reportedly the country's largest sneaker resale platform and has raised enough in a funding round this year to reach unicorn status.
Poizon's shopping offers for new app users | Collage by BoF
Poizon, alongside Nice, Dounew and Chao are just some of the players creating digital spaces for engaged communities to share, connect, and shop. As men go on to drive a bigger slice of Chinese consumption, knowing how to tap into the commercial opportunities these channels offer will prove indispensable for global brands and retailers looking to compete with local players.
Awakening China’s ‘He-Conomy’
In recent years, China’s menswear market has stepped up to give its female equivalent a run for its money. It is predicted to be worth $92.9 billion by 2023, up from $78.8 billion in 2015, according to market research firm Euromonitor.
The rise of China's once-nascent male consumers has shaped what is now referred to as its "ta jing ji," or "he-conomy." From the country's expanding middle class and disposable incomes to the global streetwear boom, evolving gender roles and Kpop-influenced rise of "little fresh meat," it was only a matter of time before male consumption gained speed.
In 2014, Makwon, a 22-year-old fashion key opinion leader (KOL) started sharing outfit images and discovering style inspiration on social e-commerce app Nice, and has since accumulated 249,608 followers. The app was launched six years ago as a male fashion platform but has since expanded into content on travel, music, sports, food and tech. The app has partnered with the likes of Nike and Uniqlo, both of which have accounts on the platform.
China's menswear market is predicted to be worth $92.9 billion by 2023, up from $78.8 billion in 2015.
“I mostly pay attention to trending posts and use them as inspiration for myself and my work,” says Makwon, who also works as a stylist. He doesn’t consider himself a sneakerhead but has purchased two pairs of Nikes (the Ambush Air Max collaboration and Air Max 98’s) on the app.
Building Communities of Consumption
But Nice isn’t the only Chinese app leveraging engaged social communities to build successful e-commerce businesses. Its rivals include aforementioned Poizon and Dounew, a similar offering introduced in 2016.
These companies took cues from the likes of StockX, Grailed, GOAT Group, Stadium Goods and Bump — lucrative online marketplaces that, in StockX's case, rode the streetwear wave to build billion dollar resale businesses.
“[These apps] have a very specific focus on e-commerce and driving sales,” says Arnold Ma, Founder and CEO of China-focused digital agency Qumin. However, they aren’t all the same.
Nike Sneakers | Source: Shutterstock
Where Poizon is streetwear-focused, Nice hones in on sneakers and is essentially “a Chinese version of StockX” with a social media element added in, says Ma. Where all three apps have both B2C and C2C elements, Poizon also offers a service in the form of paid-for authentication by “sneaker experts.”
Meanwhile, Chao, an app launched just this year by Chinese Q&A platform Zhihu, is also an e-commerce platform but hasn’t yet introduced e-commerce functionalities to its social feed — Ma refers to it as a Taobao store aggregator for niche interests groups.
What the Chinese firms are doing differently is tailoring the menswear-focused resale model to their local tech landscape — one where social e-commerce has become the norm, thanks to Xiaohongshu, WeChat and livestream apps YY.com, Inke, Huajiao and Yizhibo.
Like Xiaohongshu, Chao, Dounew and Poizon make it easy to shop within the app, from tags that content creators add to their posts. Meanwhile, advanced AI algorithms help tailor explore feeds to users' interests to keep them engaged and spending.
Shopping First, Social Second
Aside from being male-focused, Ma says that the biggest difference between apps like Nice and Poizon is that they are e-commerce platforms first and social media apps second, whereas Xiaohongshu qualifies as a “pure play social media platform.”
For brands accustomed to marketing to Chinese female shoppers on Xiaohongshu, appealing to users on male-focused platforms demands a different strategy.
While all of the above platforms can ultimately be categorised as social e-commerce platforms, meaning a dual store and content strategy will serve brands targeting Chinese millennial and Gen-Z shoppers (save for Chao, which hasn’t yet introduced in-feed shopping).
Ma argues that because the rest of the menswear apps lean towards e-commerce (rather than social media), they won’t be enough where marketing is concerned. “[Brands] will need other forms of activation to raise brand awareness,” he says, recommending must-have platforms Weibo and Douyin for the job, in addition to WeChat for engaging with consumers and building brand affinity. "There is no better platform on the planet for implementing post [and] pre-sale [social customer relationship management] than WeChat."
But for those looking for a targeted channel to reach the mainland’s streetwear-loving male consumers, the likes of Nice are an opportunity that can’t be missed. In fact, Ma reckons that they are more important for brands than WeChat and Weibo.
“If you are in the streetwear category, you absolutely can’t miss these platforms.”
FASHION & BEAUTY
A model walks a forested runway for Dior | Source Peter White/Getty Images
Dior Gets Patriotic in Shanghai
Dior has bounced back with impressive alacrity following controversy last week, when a company employee presented a map of China that failed to include Taiwan during a talk at a local university. Not only did the show (literally) go on for Dior, with the house presenting its Spring/Summer 2020 collection in Shanghai, but it had 28.9 million people tune in to watch via a 360-degree virtual reality livestream made available through its official accounts on Weibo, Huawei, Douyin (the Chinese counterpart to TikTok) and WeChat. The extension of the French luxury house's Paris show — which featured an additional 14 looks especially for Shanghai in a similar tree-lined set — wasn't necessarily the most-talked about aspect of the event; the after-party performance of the patriotic Chinese song, "Me and My Motherland," however, raised some eyebrows. (Shanghaiist)
Learning from a Resurgent Li Ning
Sportswear brand Li-Ning is one of 2019's winners in a tough year for the fashion sector. The company had been on a downward slide since 2012, losing ground to domestic rivals Anta as well as international giants such as Nike and Adidas. But after a fashion-focused reboot and turns at New York and Paris fashion weeks in 2018, Li Ning hit 10 billion yuan ($1.4 billion) in sales for the year. A shift towards the lifestyle and streetwear market also fuelled a 20 percent revenue growth in 2018, doubling the previous year's growth, and in the first half of 2019, its revenue grew by over 32 percent, with profits nearly tripling. The company's continued cost control and inventory management also helped it reach strong earnings. (Jing Daily)
Next Up: Make-up for Eyeballs
The market for coloured contact lenses is booming Asia-wide, particularly in China where consumers use the lenses as "make-up for eyeballs." Chinese consumers prefer flashy colours and designs compared to their Japanese counterparts, with purple, green and vivid blue contacts proving popular. According to Japanese coloured contact lens-maker Seed, three out of the six colour contacts they offer have been developed exclusively for China, where consumers are choosing different coloured or patterned lenses depending on their outfit and occasion. (Nikkei Asian Review)
TECH & INNOVATION
Xiaohongshu headquarters | Source: Courtesy
Xiaohongshu Returns to Android Store
Social e-commerce platform Xiaohongshu has once again appeared in the Chinese Play store, two months after it was removed from the Android platform due to alleged content violations. The app is yet to reappear on Apple's App Store. Xiaohongshu, which has been one of China's e-commerce darlings in recent years, had been accused of collecting personal information without users' consent and publishing false and unverified information. The social commerce platform has more than 300 million total users, and more than 100 million monthly active users. Over 70 percent of the platform's users were born post-1990 and 1995, and 70 percent of its content is user-generated. (Sina Tech)
Chinese Internet Rocked by Fake Data Scandal
A Taobao vendor posted a widely shared article to WeChat accusing Hive Media — a leading domestic multi-channel-network (MCN) agency — of faking data, after a high-profile ad campaign failed to boost sales. The agency had arranged for Zhang Yuhan, who boasts over 3.8 million followers on Weibo, to post a vlog ad on her newsfeed. The post garnered over 3.5 million views, as well as 1,000 comments, with over half stating that they had placed orders. According to the vendor, not a single order was made. The ensuing furore has laid bare China's struggle with fake social media data and has attracted heated online debate. (Technode)
Google, Facebook and Apple Skip Chinese Internet Conference
The state-run World Internet Conference, also known as the Wuzhen Summit, is a platform for the Chinese government to promote its idea of global internet governance and export its own restricted internet model to other countries. The event has attracted top names over the years, including Tim Cook from Apple and Google's Sundar Pichai in 2017. This year's attendees included the regional presidents of US internet hardware makers Honeywell, Qualcomm, Intel, and Cisco Systems, as well as Microsoft; among Chinese entrepreneurs at the conference were Baidu boss Robin Li Yanhong and former Alibaba chief executive Jack Ma. However, internet giants such as Google, Twitter, Facebook and Apple were notably absent. (SCMP)
CONSUMER & RETAIL
Alibaba's 2018 Singles' Day event | Source: Courtesy
Alibaba Outlines Expectations for Double 11 Festival
Pre-sales for the Double 11 festival, known internationally as Singles' Day, have already begun on China's major e-commerce platforms. At a press conference in Shanghai to launch this year's festival, Alibaba announced the participation of 200,000 brands, with 22,000 of them coming from 78 overseas markets. More than 500 million consumers are expected to shop during the festival period — about 100 million more than last year. China's lower-tier cities have created a new channel of growth for Alibaba, with the company saying that 226 million new mobile monthly active users had joined Taobao over the past two years as of June 2019. In fiscal year 2019, 70 percent of them were from lower-tier cities. (Alizila)
Online Retail Sales Growth Slows
China's online retail sales in the first nine months of the year rose 16.8 percent year-on-year to 7.3 trillion yuan ($1.03 trillion), according to data published Friday by the National Bureau of Statistics (NBS). Though that growth was lower than the 27.7 percent recorded for the same period last year, online sales — excluding services — as a percentage of total retail sales rose 2 percentage points to 19.5 percent. Total retail sales for the nine-month period rose 8.2 percent to 29.7 trillion yuan ($4.19 trillion). Nearly half of the total retail growth came from online sales, according to the NBS. (Caixin Global)
Metro’s Billion-Dollar Deal to Sell Majority Stake in Chinese Business
German wholesaler Metro has agreed to sell a majority stake in its Chinese operations to local retailer Wumart, in a deal that gives the Chinese unit a value of €1.9 billion ($2.1 billion). The German group will retain a 20 percent stake in a joint venture called Metro Wumart China, and Metro expects to receive proceeds of €1 billion from the stake sale. While Metro's Chinese operations include 97 stores and real estate assets in major cities such as Beijing and Shanghai and the business made €153 million in fiscal 2017-18, wholesalers and retailers alike in China are facing intense competition from online operators. (Reuters)
POLITICS, ECONOMY, SOCIETY
Emma Shipley for Selfridges Star Wars scarf | Source: Courtesy
Disney Turns to Reading to Lure Chinese Star Wars Fans
With the Chinese market still yet to fall in love with Star Wars after numerous attempts, Disney is set to partner with Tencent's China Literature, a digital reading platform with 217 million monthly active users. A total of 40 Star Wars novels will be made available in Chinese for the first time, with one of China Literature's most famous authors — known by the nom de plume "His Majesty the King" — set to write a new story for the franchise "with Chinese characteristics." It will "bring in Chinese elements and unique Chinese storytelling methods," according to a statement posted to the official Star Wars Weibo account. (Variety)
Chinese Government Cryptocurrency: Not Your Average Bitcoin
China wants to replace cash with its own digital currency, a long-discussed project that was kicked into overdrive after Facebook outlined plans for its own Libra cryptocurrency in June. Chinese consumers already almost exclusively pay using mobile payment services Alipay and WeChat Pay, but these transactions move between digital wallets, without making contact with the state-dominated banking system. A new e-currency would allow the government to directly track every transaction, in a country where corruption and fraud are widespread. But the Chinese government also risks alienating people who have grown increasingly sensitive to how their personal data is collected and used. (New York Times)
China Has More Wealthy People Than US for the First Time
The number of rich Chinese has surpassed the count of wealthy Americans for the first time, according to data from Credit Suisse. The Swiss bank's annual wealth survey found that 100 million Chinese ranked in the global top 10 percent, topping the United States' total of 99 million. The global total of millionaires has risen by 1.1 million to an estimated 46.8 million, collectively owning $158.3 trillion in net assets, or 44 percent of the global total, the study found. (Reuters)
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