China News Brief
    March 26, 2024

    Chip wealth boosts Ferrari’s Taiwan sales; Chanel to hike prices; Xiaohongshu turns profitable.
    Ferrari is racing ahead in Taiwan. Photo: Shutterstock

    Chip wealth boosts Ferrari’s Taiwan sales#

    Ferrari’s sales in Taiwan have doubled  in four years due to increased wealth among chip entrepreneurs and global supply chain diversification. Demand for supercars in Taiwan surpasses that of mainland China or Hong Kong, driven by rising affluence, particularly in the chip industry. Ferrari’s record earnings reflect this trend, with shipments to mainland China and Taiwan accounting for nearly 1% of total sales last year. The surge in private wealth in Taiwan, fueled by semiconductor dominance and manufacturing shifts from mainland China, has boosted Ferrari’s growth, with entrepreneurs comprising the majority of buyers. Limited production maintains Ferrari’s luxury status, driving up prices and profitability despite lower vehicle sales compared to other luxury brands.

    Chanel to hike prices#

    Due to increased raw material and labor costs, Chanel will raise  its prices globally tomorrow. This includes products such as the CF series handbags, 2.55 handbags, Boy Chanel handbags, Chanel 19 handbags, and Chanel 22 handbags. Sources suggest that the increase may range from 10% to 15%. If true, prices for Chanel’s small CF handbags will further rise to 88,000 RMB ($13,200), nearing the 90,000 RMB ($13,500), while Chanel 22 handbags will surpass the 50,000 RMB ($8,000) threshold.

    Xiaohongshu turns profitable#

    According to the Financial Times, Xiaohongshu has achieved  its first-ever profit, driven by soaring popularity and diverse revenue streams. The Shanghai-based app recorded a net profit of $500 million on revenue of $3.7 billion last year, marking a significant turnaround from a $200 million loss in 2022. Backed by investors like Alibaba and Tencent, Xiaohongshu appeals mainly to young female users seeking lifestyle and beauty content. While advertising remains its primary revenue source, the platform is expanding its e-commerce offerings, notably through influencer-led livestreaming sales. Concerns persist about its future trajectory, particularly regarding the lack of a clear path to an initial public offering. Nevertheless, Xiaohongshu’s focus on quality and its ability to attract affluent consumers in urban centers make it an appealing platform for brands.

    China adds 70 million online shoppers#

    The 53rd “China Internet Development Status Report” was released  on March 22. It reveals a large increase in the number of online shoppers in China, up 69.67 million people, or 8.2%, compared to December 2022. New areas of growth are trendy, green, and smart products. Among online shopping users, 58.3% have purchased domestic trendy products, 29.7% have purchased green products, and 21.8% have purchased smart products such as smart home appliances and wearable devices.

    Apple to launch Vision Pro in China this year#

    Apple CEO Tim Cook announced  yesterday at the China Development Forum 2024 Annual Meeting that Apple’s Apple Vision Pro headset product will be launched in the Chinese market this year. During the subsequent “Carbon Neutrality and Global Climate Governance Symposium,” Cook stated in his speech that Apple, along with all its supply chain partners, has collectively utilized over 15 gigawatts of renewable energy. This is a large-scale project covering various parts of the world. As most of Apple's supply chain companies are in China, many of these projects are also in China.

    Boao Forum opens#

    The Boao Forum for Asia (BFA) takes place  today through Friday in Boao, Hainan Province, China. Discussions this year encompass AI, new energy vehicles (NEVs), and Belt and Road cooperation. Notably, discussions will explore global trade fragmentation, geopolitical and economic outlooks, security challenges, and climate crisis solutions.

    Crocs names new brand envoy#

    Crocs yesterday announced  Chinese singer and actor Karry Wang as its global brand ambassador. In the campaign visuals, he pairs denim overalls with classic Crocs, showcasing a blend of casual and trendy.

    Supreme’s China debut sparks long queues#

    Supreme has opened  its first store in China at 291 Fumin Road in Shanghai, along with launching a WeChat mini-program. Despite requiring reservations, the store’s opening on Saturday last week led to long queues, with products quickly selling out on the brand’s WeChat mini-program. After a trademark dispute in 2019, Supreme obtained trademark rights in China in 2020 and was acquired by VF Corporation, Vans’ parent company, that same year.

    Alessandro Michele said eyeing Valentino role#

    Former Gucci creative director Alessandro Michele is reportedly  in negotiations with Valentino regarding the details of a potential position, possibly succeeding Pierpaolo Piccioli as the new creative director, according to insiders quoted by Women’s Wear Daily yesterday. Alessandro Michele announced his departure from Gucci in 2022 and has not responded to reports of his potential move to Valentino. Meanwhile, Pierpaolo Piccioli announced on March 23 that he would be leaving Valentino.

    Tod’s Group delisting edges closer#

    Italy’s Consob has green-lighted  Tod’s Group delisting tender offer, set to begin tomorrow, aiming for a 36% acquisition at 43 euros ($46.66) per share. L Catterton, backed by LVMH, has launched an offer for 27.9%, valued at $437.8 million (398 million euros). The agreement includes a merger option if delisting fails. Della Valle will maintain a 54% stake post-delisting, with L Catterton at 36% and LVMH’s Delphine SAS at 10%. Tod’s reported strong 2023 performance.