February 7, 2013

Chinese City Adopts “Milan Plan” In Attempt To Become Int’l Fashion Hub

“Bringing Together Designers, Retailers, Raw Material Suppliers, Manufacturers And Service Providers In One Location”

Shishi hopes to become a fashion epicenter

Recently, China Daily reporters Lv Chang and Hu Meidong published a story about a small coastal city in China’s southern Fujian province, Shishi, that has set its eyes on becoming China’s version of Milan. Casting the endeavor as the “Milan Plan,” the city’s International Textile and Garment Center (ITGC) aims to build a fashion capital in the image of the Italian fashion capital, “bringing together designers, retailers, raw material suppliers, manufacturers and service providers” in one location in hopes of cutting costs, improving domestic original designs, and supporting home-grown brands to go international. With an investment of 4.35 billion yuan (US$700 million) and covering 188,000 square meters, the ITGC’s industrial park of offices and design studios — currently home to more than 1,000 textile and apparel companies — is expected to begin operations next year.

As the question of when will China produce luxury brands that people are actually willing to buy has become more pressing, some see the Milan Plan as a strategy for Chinese designers and brands to become actual contenders in the world’s fashion market. However, roadblocks such as difficulties procuring top-tier textiles, high import taxes, difficulty hiring skilled workers, and the lack of a sophisticated wholesale buyer market in China have thus far hindered most efforts. As WWD recently noted, “Although the market has shown a hunger for new brands and curiosity about local design talent, it is not ready to pay the same price tag as foreign brands for Chinese design.” Similarly, Yahoo! China noted that “not only are Chinese luxury brands rarely sought after, they’re often hard to find in China’s sprawling shopping centers. At Plaza 66 in Shanghai (恒隆购物广场), staff said, ‘Plaza 66 doesn’t have any Chinese luxury brands. There are some higher-end Chinese brands on the second floor, but the first floor is packed with international brands like Versace.’”

Agreeing with the current status of domestic designs, Tian Qiming, chairman of Shishi Textile and Garment Chamber of Commerce and local menswear brand Edenbo Group, told China Daily,

Many of [China’s] clothing brands are mainly low- and middle-end ones, and lack the power to develop high-end brands, so if we don’t do this, we face the possibility of dropping out of the market eventually. The high-end market in the domestic fashion industry is still dominated by foreign brands, because they have very strong design teams, professional marketing experts and a long history of brand building.

That said, Xu Peiyuan, the creator of the Milan Plan and deputy director of the college of economics and finance at Huaqiao University, said, “Consolidation around a center is a clear path to victory, because joint efforts across all sectors will improve the effectiveness and allow for resource maximization.” China Daily reported that Milan was chosen as a model not just because it is the heart of Italian fashion, but also because the two cities share several commonalities. As silk center Como and wool and textile city Biella form, with Milan, an industry triangle accounting for more than 20 percent of the local economy, Shishi sits equidistant from with the Quanzhou and Xiamen Economic Zones, which account for more than one-fifth of China’s textile and apparel production.

"Made in China" high fashion has been slow to take off among domestic consumers

Furthermore, “like Milan, Shishi has some obvious advantages – the complete industrial chain, most skilled workers and the most advanced production equipment,” Zhang Qinghui, deputy secretary-general of China Fashion Week Organizing Committee and Chinese Clothing Designer Association, added. “But what makes one city a magnet for the fashion world is its original design and the ability to be flexible and understand changing tastes and trends.”

For designers, the Milan Plan may be a means to brand legitimacy and longevity and a helping hand for their own labels. Liu Yiqun, designer and president of Wolf Zone, told China Daily, “In China, many [brands] are imitating foreign brands, because the fashion industry here is pretty much in its infancy. Long tradition has been a mainstay for globally recognized luxury products. When you look at the logos of many foreign famous brands, they always begin with ‘Since’, which distinguishes it with a history and a story behind it.”

What is interesting, however, is while Shishi is striving to emulate, if not copy, Milan, Chinese fashion industrialists and factories have already taken a stronghold in Italian cities such as Prato, where as BBC reported in 2010, as many as 5,000 Chinese factories have descended onto the Italian landscape, displacing Italian workshops and gaining their business. As such, Italian factories face tough competition even in their home market, and could be priced out.

Beyond having a broad reach in manufacturing and building a capable epicenter in Shishi, the real obstacle for China to become an equal player on the international field is to change the nation’s consumer perspective of Chinese-designed and made products. Only then will China’s own platoon of brands be able to compete both in quality, crafstmanship and inspiration. As Jing Daily previously pointed out:

[W]hile China does have a new generation of independent designers in Beijing and Shanghai, who steadily pump out avant-garde-leaning collections and increasingly hit the world stage, influential brands are scarce, and Chinese brands that do try to go upmarket (via new collections or sub-brands) often encounter resistance. With the notable exception of Chinese brands supported by major international partners, such as the Hermes-backed Shang Xia, Richemont-owned Shanghai Tang, and jewelry house Qeelin (recently acquired by PPR), few clear leaders have emerged in the running to become China’s first internationally successful premium marque.

It will take more than a well-oiled machine to make Shishi into a real fashion capital. International recognition must first start with a national recognition of a country’s own talents, a recognition that requires a more inward-looking consumer class and that will gradually come to light with each passing generation.

Business & Finance / Fashion / Investment / Lifestyle / Market Trends / Policy
Tag: branding, china, china daily, china luxury... , More
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