Category Archives: Fashion

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ChinaLuxCultureBiz is now Jing Daily! Be sure and check us out at our new location.

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Jing Daily compiles the best in Chinese luxury, culture, business, arts, and investment news from around the world

NEW YORK – November 5, 2009 – Jing Daily, the source for the most important and timely news about the business of luxury and culture in China, today announced the launch of its new website (http://www.jingdaily.com). With insight and commentary gathered from the Chinese- and English-language blogosphere and top news sources around the world, Jing Daily offers up-to-date information about crucial developments and current trends in China’s luxury, business, arts, and cultural markets.

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Diamond Sales Get Huge China Boost

Xinhua Reports 12.7% Rise In Imports In First Half Of 2009 To $300 Million As China Eyes Top Spot In Global Diamond Consumption

Diamonds are becoming more popular -- and accessible -- every year in China

Diamonds are becoming more popular -- and accessible -- every year in China

Good economic news in China this year has translated to good news for diamond producers, if figures released recently by China’s news agency, Xinhua, are correct. This year, following a nearly 50% decline in diamond sales in the US and 24% drop in Japan — according to China’s Global Times — China has become the world’s third largest diamond market with $300 million in sales through the first half of the year. Although this might sound like a lot, particularly in the context of the global economic slowdown, the Chinese market still has a lot of room to grow. Despite rough figures in the US over the past year, the American market still accounts for nearly half of world diamond sales, so the emerging Chinese and Indian markets will take several years of sustained growth to reach the capacity and consumer awareness of the established American and Japanese markets, a prospect that must please diamond producers immensely.

According to the Global Times, less informed middle class Chinese consumers are likely to be the easiest to reach for years to come, as diamonds are still relatively new to the Chinese market (about as new as the middle class itself). As younger Chinese buyers slowly become more informed about diamond grading and quality standards, the market is likely develop and mature:

Diamonds, once a luxury rarely owned by a Chinese family, has now become a must for Chinese newlyweds. According to [Wang Fei, researcher at the Cheungkei Research Center for Luxury Goods and Services (SITE) in the University of International Business and Economics,] the largest population of diamond buyers is newlywed couples born in the 1970s and 1980s.

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Chinese Acquisition Of Scottish Cashmere Producer Todd & Duncan “Sewn Up”

Ningxia Zhongyin Becomes First Chinese Firm To Take Over A UK Cashmere Company, Eyeing Growth Of Domestic Market In China

Ningxia Zhongyin is one of the world's top producers of cashmere fibers -- with its acquisition of Todd & Duncan, it has greatly increased its global footprint

Ningxia Zhongyin is one of the world's top producers of cashmere fibers -- with its acquisition of Todd & Duncan, it has greatly increased its global footprint

Cashmere, a major contributor to the economy in China’s mid-western Ningxia Hui Autonomous Region, has quickly become big business in China, as more companies in Ningxia attempt to move beyond producing raw cashmere and into the much higher profit-margin sector of finished product exports. Of the major cashmere producers in Ningxia, in the last few years the Ningxia Lingwu Zhongyin Cashmere Company has emerged as the most ambitious, with executives making it clear that the company wants to not only capture the lucrative Chinese domestic market but also the even more lucrative overseas market.

To secure both groups of customers, the company has set out to acquire marquee foreign brands, which have the brand history and pedigree to appeal to Chinese luxury consumers. Last year, Zhongyin made its first moves to try to acquire the Scottish firm Dawson International, a deal that ultimately fell through but showed Zhongyin’s intentions to break into the Scottish cashmere market. From China.org:

In 2008, the Ningxia-based Lingwu Zhongyin Cashmere Company entered into negotiations to take over 120-year old Dawson International, widely regarded as the world’s number one cashmere business. Although the takeover talks were called off on June 4, the bid was an indicator of the ambition of Ningxia’s emerging cashmere giants.

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Future For Luxury Goods Looks A Little Brighter

Growing Demand In China’s Interior, Other Asian Countries Should Counterbalance Tepid Consumption Elsewhere

Although Chinese consumers have shown a taste for foreign luxury brands, domestic labels will present stiff competition in coming years

Although Chinese consumers have shown a taste for foreign luxury brands, domestic labels will present stiff competition in coming years

As a result of the fast-paced development of China’s eastern coastline and special administrative regions, only recently have major luxury brands made it to the country’s vast interior region, where a number of second- and third-tier cities remain relative blank slates. Since so many companies are only reaching these areas now, the spread of luxury brands in China has become a regular news story. This has only intensified over the last year, as formerly free-spending Japanese and American customers have thought twice about luxury goods while emerging customers in places like the BRIC countries and relatively fast-growing economies like Vietnam become more regular (and brand-loyal) buyers. Nonetheless, the luxury sector is still experiencing only modest growth one year on from the onset of the global economic slowdown despite their best efforts at wooing new customers.

If many recent articles are correct, though, what we’ve seen over the last year — severe as it has been — should only prove to be a blip in the grand scheme of luxury revenues. From Financier Worldwide:

Sales of designer shoes, handbags, and beauty products have weathered the financial storm particularly well. At the end of August, French cosmetics company L’Oréal reported higher than expected profits of €1.37bn for H1 2009. In June, Hermès revealed it was farming crocodiles in Australia to feed demand for its coveted £4000 Birkin bag. Around the same time, Mulberry announced that its handbag sales had recovered, climbing 21 percent in the first 10 weeks of the new financial year. Shoe supplier Kurt Geiger, which operates in upmarket department stores across the UK, also reported double-digit growth in profits for the first five months of the year.

Bain & Company predicts that trading in the developed markets will remain tough for the rest of the year, with growth of around 1 percent in 2010 before a slow recovery. However, despite the recession slowing the pace of development in emerging markets, Bain believes that, as a consequence of increasing personal wealth, growth in global GDP, and rising tourism in Russia, China, India and Brazil, spending will surge between 20 percent and 35 percent over the next five years. This is expected to aid the recovery of the luxury goods sector.

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Warren Buffett Gives Little-Known Chinese Clothier A Global Boost

Buffett’s Endorsement Of Trands, Suitmaker For China’s Government Elite, Gives Small Clothing Brand International Notoriety

Warren Buffett's endorsement of Chinese high-end menswear designer Trands sent its stocks soaring

Warren Buffett's endorsement of Chinese high-end menswear designer Trands sent its stocks soaring

Warren Buffett’s interest in China as an investment destination is well known, and his words of praise for (or investments in) the occasional Chinese company seems to have the effect of boosting that company’s visibility abroad virtually overnight. H is company’s $230 million investment in Chinese electric and hybrid automaker BYD has elevated what was only a few years ago a fledgling battery maker into a brand which is set to enter the US market as early as next year. So for little-known (even in China) Chinese menswear designer Trands, Buffett’s endorsement of his newest Chinese-brand-of-the-moment is definitely exciting news — especially because their stocks have risen 70% since the release of a video in which Buffett extols the brand’s qualities. As the Wall Street Journal writes today,

Move over Brioni, the truly rich and powerful are wearing Trands.

The obscure menswear label is produced by Dayang Group, a clothing company founded by Li Guilian, 63 years old, a diminutive farmer-turned-fashion mogul, in northeast China.

Ms. Li’s company got a major boost after Mr. Buffett, chairman and chief executive of Berkshire Hathaway Inc., recently appeared in a Dayang promotional video, posted on the company’s Web site. He heaped praise on Ms. Li, her company, and the nine Trands suits he proudly owns. Shares of Dayang’s Shanghai-listed subsidiary, Dalian Dayang Trands Co., have soared by more than 70% since the video was posted on Sept. 10.
 

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Luxury Watch Brand Richard Mille Opens Flagship Store In Beijing

Watchmaking Iconoclast’s New Location At Jin Bao Street’s Legendale Hotel Features Decor And Accents Shipped From Paris

Richard Mille's flagship store in Beijing brings an air of bygone Europe to Beijing's Jin Bao Street

Richard Mille's flagship store in Beijing brings an air of bygone Europe to Beijing's Jin Bao Street

Richard Mille, the French luxury watch brand,has just opened a flagship store in Beijing’s five-star Legendale Hotel, according to a company press release. Mille’s fixation with high-tech materials and unique alloys inspired by F-1 motorsport and the aerospace industry, has made him one of the most unusual — and fastest-rising — luxury watch forces in the world, and with the flood of spending we’ve seen in China on luxury goods like watches, cars, wine, jewelry and contemporary art, Beijing’s flagship Mille store should attract the city’s free-spending elite in no time.

[T]he flagship occupies 260 square meters of space at this platinum 5-star hotel that represents European elegance and luxury in the heart of this capital of the People’s Republic of China. With such a prime address and grand interiors, Sparkle Roll Group Limited, the exclusive dealer of Richard Mille in PRC, invested HK$45 million in building this flagship in Beijing.

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Fashion: From “Made In China” To “Owned By China”

Acquisition Of High-Profile Western Brands By Chinese Companies Gives Chinese Designers And Brands Broader Distribution Base

Pierre Cardin has become one of the most recognizable and coveted foreign brands in China since entering the market in 1978. Photo (c) CRI English

Pierre Cardin was recently acquired by a Chinese fashion company, boosting the popular brand's reach in the China market. Photo (c) CRI English

In the wake of the global economic crisis, several Chinese companies have gone on global shopping sprees, spurred by the one-two punch of a drop in luxury consumption in developed markets and a motivation to control the sale of high-profit luxury goods inside the Chinese mainland. Although China, as the world’s most populous nation, has a massive consumer base, much of that base remains far below the income level of regular luxury consumers, meaning domestic companies often experience a difficult conundrum — if they want to tap into the wallets of China’s 1.3 billion consumers, they generally have only two real choices – toss brand equity aside and focus on the lowest-price-point consumer or bring a foreign brand with much higher brand equity to China and target the emerging middle class and wealthy consumers. As a result, the transition from local to global (or maybe more accurately, glocal), seems natural. In the capitalism-on-speed world of China’s major metropolitan areas, either you go global or you’re crushed by your competitors.

This week, the subject of Chinese companies purchasing established western fashion brands was raised in a Reuters article (via Canada’s Financial Post), which focused on the delicate balance some major Chinese companies are dealing with at the moment — whether to try to purchase distressed foreign brands to sell in the brands’ existing established markets or simply to buy the brands then control them as they please within the Chinese market. There is no guarantee that consumers in developed markets will bounce back from the recession to spend as freely on luxury goods and haute couture as they once did, but at the same time the majority of Chinese consumers are not in the market for these goods. Additionally, Chinese fashion companies may not yet have the management experience necessary to oversee a western brand (or its employees) in its usual markets, so time will probably be necessary for Chinese companies to work out the kinks that would emerge down the road if they were to focus too strongly on overseas markets.

According to some sources — such as the exporter interviewed in the Reuters article — Chinese companies shopping for western fashion brands would be better off counting on the continued growth of the Chinese middle class, as this area should see sustained growth that may outpace the rebound of the consumer in developed countries.

After decades of Made-in-China garments, China’s fashion industry is keen to move on from being just a mass manufacturer of clothes. It now wants to own western brands and to sell them to China’s 1.3 billion consumers.

The right to sell brands of several international fashion labels locally, such as Aquascutum and Pierre Cardin, have been recently acquired by Chinese clothes makers and sellers.

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Luxury Brands Refocus On China

Studies Indicate Sluggish Demand In Established Markets Will Continue As Buyers Remain Motivated In China

According to new studies, Chinese luxury enthusiasts may help buoy the global luxury market for the next few years, if not drive long-term growth

According to new studies, Chinese luxury enthusiasts may help buoy the global luxury market for the next few years, if not drive long-term growth

Luxury brands have had what can conservatively be called a tough year, with the global economic crisis putting a gaping wound in their profits in traditionally high-demand countries like the US and Japan, and recovery lagging behind expectations. These figures have been tempered somewhat by the potential of the Chinese market to soften the blow of falling demand elsewhere, if not counteract it completely. While it is still a bit quixotic to expect China to be the savior of luxury brands everywhere — since it is still very much a developing market — it does benefit luxury brands to plan ahead for the time when China is the world’s biggest luxury market, and start brainstorming on their long-term strategy for sustained growth as well as strong brand loyalty.

This week, Harvard Business looked into the Chinese luxury market, digging through statistics to discern whether this market truly is all it’s cracked up to be. While their findings suggest that hyperbolic enthusiasm about the Chinese consumer is unwarranted — as we’ve written before — they do remain bullish about the potential of this populous and fast-moving market:

New research from McKinsey & Co. indicates that, by 2015, China will be home to the world’s fourth-largest population of wealthy households, an estimated 4.4 million. McKinsey also reports that presently, about 80% of China’s wealthy are between the ages of 18 and 45 (versus 30% in the US). Jing Ulrich, the chairman of China equities at Morgan Stanley, was recently quoted in Forbes as saying of China, “With the global recovery unlikely to be smooth, domestic demand is likely to remain the primary engine of growth in the remainder of 2009.” In a Wall Street Journal op-ed last year, Zachary Karabell argued that “the rise of the Chinese consumer is the only thing standing between them [global companies] and a decline in their business.”

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Chinese Jewelry Brands: Three To Watch

Strong Demand And Growth In Chinese, East Asian Markets Helps Luxury Jewelry Brands Find New Global Markets

Gold has been a traditional "hedge" in China for centuries

Gold has been a traditional "hedge" in China for centuries

We have written before about the popularity of gold, jewelry and watches in China, and as the figures released today show that the Chinese economy seems to have positive momentum, it is likely that domestic demand will continue to grow for these luxury items. Government efforts to spur increased consumption and lower savings rates look to be at least partially successful, and as a result many global jewelry companies are now putting extra effort into their China outreach and expansion programs.

Today, Diamond Worldlooks into the growing influence of Asian jewelry brands as they become an increasing part of the global market, profiling three up-and-coming Asian jewelers who you might see at a mall near you in a few years: Luk Fook Jewelry, Kin Hung Lee Jewelry and Qeelin Jewelry.

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Ralph Lauren Planning To Open 15 New Stores Annually In China

Fashion Brand Sees Potential To Broaden Foothold In Lucrative, Yet Challenging Fashion Market

 

Ralph Lauren's sole free-standing location in China is located in Shanghai's luxury Jin Jiang Dickson Center. The company plans to branch out very rapidly in coming years

Ralph Lauren's sole free-standing location in China is located in Shanghai's luxury Jin Jiang Dickson Center. The company plans to branch out very rapidly in coming years

Wing-Gar Cheng writes for Bloomberg today that American retailer Ralph Lauren hopes to open 15 new stores in China annually in coming years. While the signature Ralph Lauren style has been adapted — or “copied”, depending who you ask — by brands with a long-time presence in China, like South Korea’s E-Land (not to mention counterfeiters throughout the country), the number of free-standing Ralph Lauren locations has remained limited. With the global demand for higher-end items remaining relatively anemic in the North American, Japanese, and European markets — despite improvements — China, with the high potential of its second- and third-tier cities, remains a sought-after target by mid- to higher-range fashion brands like Ralph Lauren. 

As Cheng writes, rapid expansion in China is not simply driven by idealism. There is a great deal of untapped potential throughout the underserved mainland, well illustrated by a quote by George Hrdina, president of Ralph Lauren’s Asian business, who said, “We do more Ralph Lauren business on the island of Manhattan, New York, than we do in Hong Kong and China.” Clearly, adding 15 stores per year is less unrealistic than it may initially sound.

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