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Issue No. 2 April 2013 P H O to : Y a Z M I N Issue No. 2 April 2013 P h o to : Y a z m i n Y e a r a FASHION BRANDS ARE EMBRACING THE DIGITAL PHENOMENA IN CHINA Marivi Avalos Monarrez, Marketing Manager at Fashionbi Daily we see how China is a major player in the world to the evolution of the fashion industry from the offline news. About the same Fashionbi Magazine, we didn’t to the online business, covering every area of interest want to be left behind, and it was very important to about the strategies the local and international brands offer our readers an issue with information about this are following to be successful on this country, from market and the way Fashion Industry is evolving. local social media to mobile and e-commerce and so on. An outstanding analysis of the online performance The role this industry plays is significant because of local and international brands has been done by anywhere you go it is easy to discover how important our team of analysts in Shanghai. Also featured in this it is through fashion shows and editorials screened issue are: Yu JuHong, owner of lingerie brand AIDAINI; on trains, airplanes and subway stations. But most Jett Qiu, General Manager in China for “earth music importantly, players in this industry are transforming & ecology” and Tristan Colvin, brand manager at the way businesses are done, by taking their brand Roberto Boticelli, who kindly shared their experiences experience to the online world, where the population with us about managing a fashion and luxury brand in of a billion is using local social media platforms to China. We are proud to present this second issue and engage not only with friends but also with their favorite we hope you enjoy getting updated about how fashion fashion brands. Consequently, we dedicated this issue brands have embraced the digital phenomena in China! Fashionbi Magazine Issue 2 April 2013 2 / 53 Contents APRIL 013 Overview 04 From offline to online: the Evolution of the 05 Chinese Fashion Industry Fighting the stereotypes 08 The high-fashion consumer of today 10 The digital fashion world 13 transforming the fashion industry Consumers Getting Technology-Smart 14 International brands and their presence on 17 SINA Weibo Industry insight by the insiders 35 Fashion brands and their online 22 phenomenon in China Jett Qiu, japanese brand “earth music & 36 ecology” ’s general manager in China Online brand performance insights 27 Yu Juhong, The owner of the Chinese fashion 39 The international labels surpass the local 28 lingerie brand “AIDAINI” Chinese labels, on a global awareness scale Tristan Colvin, Brand Manager at Roberto 42 International brands are the most attractive, 30 Botticelli be it on the local or global social media channels Fashionbi Magazine Issue 2 April 2013 Future trend 44 What the future holds? 45 Business Gurus 49 Monthly Contributors 50 What our readers say? 51 overview FROM OFFLINE TO ONLINE: THE EVOLUTION OF THE CHINESE FASHION INDUSTRY By Marivi Avalos Monarrez It is known that China’s economic evolution has no historical precedent, just in 1978 China was one of the poorest countries in the world and few years ahead the situation in average living standard occurred positioning this country to be the second largest economy in the world. Changing the world China is in the media today, taking a major role in the world news. Analysts are forecasting that it is the world’s fastest growing country, and it is estimated that by 2040 it will be the largest economy in the world, with India and the U.S. being the second and third, respectively. Nowadays, China is not limited to only its major cities of Shanghai and Beijing, instead the second tier cities like Tianjin, Qingdao, Chengdu, Dalian, Nanjing among others, are playing a major role in this nation’s booming economy. More and more international companies are finding these markets attractive and are gradually grabbing their The middle-income trap retail space in a middle-market population that is forecasted to have an important level News about China’s economy facing a “slowdown” is due to the of growing by 2020. manufacturing costs getting higher and as a result the region is reaching the levels of the “middle-income trap” where countries In addition, the local designers and fashion move from rapid to slow growth, and new sources of growth are brands are also transforming the scene, needed. This country has proved to be innovative and even though uplifting the image for “made in china” tag. this nation could become a less effective competitor in certain aspects, it could also become less predictive and more aggressive, gaining advantages in different areas like new technologies and sustainability. Fashionbi Magazine Issue 2 April 2013 5 / 53 Online strategies are changing China’s Fashion Industry The use of new technologies, especially in digital communication arena is having a strong impact due to the fashion business taking an unexpected turn. Today, China’s real per capita GDP is exceeding by 8 percent per year, and according to the World Bank in 2011, the population was 1.3 billion. This country’s population uses local social media platforms for networking where they engage not only with their friends, but also with their favorite fashion brands, celebrities or even with the government officials, to express their ideas and feelings towards different happenings. In addition to that, the e-commerce is having a strong impact in the way fashion retailers do business. Before everything was focused to be put on sale for people living in ‘first’ cities, but now with the e-retail, the fashion retailers can reach a much more bigger audiences in second tier cities, All this leading to the changing stereotype classification of the gaining a significant sales value. Chinese into wealthy and non-wealthy, as today, this country’s middle class is rapidly growing with an access to internet, study- abroad, and, consequently, their interest in new things and affordability of an “aspiring lifestyle”. The young population is incredibly interested in everything “fashion”. Brands and retailers know it and are desperate to get a piece of cake of the expansion strategy for the Western brands in the country. International companies too, have learned the importance of being able to offer the consumers, local options according to their ‘new’ lifestyles and needs. “The e-commerce is having a strong “Western companies are launching impact in the way fashion retailers do Chinese luxury brands” business” Shang-Xia InOut Collection Marketingtochina Blog Source: shang-xia.com Source: marketingtochina.com Fashionbi Magazine Issue 2 April 2013 6 / 53 “Shang Xia is a luxury brand that is “The Li Fung Group, founded in “Li Fung Group is now the 100 percent produced in China” 1906 by the Fung family” owner of many Western fashion” Shang Xia Campaign Li Fung Group 2011 Annual Report Li Fung Group 2011 Annual Report Source: shang-xia.com Source: lifung.com Source: lifung.com Entering the world of Luxury A major happening in the evolution of the fashion industry is the phenomenon of Chinese fashion companies becoming owners of Western luxury brands, or Western companies launching all Chinese luxury brands in partnership with Chinese designers and so on. One example of a Western company owning one of the first Chinese luxury brands is Shang Xia, founded in 2008 and owned by the Hermès group together with the designer Jian Qiong Er. This brand is aiming to preserve the historical beauty and craftsmanship of Chinese design. What is remarkable about Shang Xia is the fact that it is 100 percent produced in China, and it is not a second line of Hermès nor is a version for this market. But it is the best way to rescue the value of traditional Chinese arts like weaving and porcelain- making. The pricing for most items goes What has also changed is the fact that old manufacturing from 2125 Yuan for a sweater to 7400 Yuan companies or luxury brand agencies are starting to build their for higher goods. own luxury brands. Recently, the Redston Haute Couture Company bought the Italian brand GIADA, and soon in July Another example is about the case of Hong 2013, they’ll open a new store at Via Montenapoleone in Milan. Kong-based Li Fung Group, established This company is recognized for introducing luxury brands in since 1906 by the Fung family in Canton China, with examples such as Salvatore Ferragamo, Saint and now has its headquarters in Hong Laurent and Valentino. Kong. This company is a global figure in the consumer products, and nowadays is very To summarize, the fashion industry in China is facing a stage known for acquiring Western luxury brands where new technologies are helping Western fashion companies like the recognized French fashion house to create awareness in this market even if they are not very well Sonia Rykiel, Cerruti 1881 and Gieves known, thanks to local social media platforms like Weibo, helping & Hawkes, Clergerie, Hardy Amies the population to be more connected to what’s happening in the amongst others. other side of the world. Further research demonstrated that on this channel, people talk about red carpet events and celebrities There is also the case of Shaw-Lang Wang, endorsements of Western luxury brands, an awareness that was the Taiwanese women behind the French hard to conceive a few years ago. The country once perceived as brand Lanvin. the biggest factory of the world is now the owner and creator of many luxury brands, worldwide. • Fashionbi Magazine Issue 2 April 2013 7 / 53 FIGHTING THE STEREOTYPES By Jenny Perusek Once only known for its low-cost, high volume production model, the Chinese Fashion Industry has been transforming itself in recent years into a heaven for emerging homegrown luxury brands.
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