China News Brief
    June 07, 2024

    Lululemon’s Q1 2024 sales rise 10%, China revenue soars 45%; Greater Bay Area integration boosts cross-border spending; Paul & Joe Beaute to quit Hong Kong, maintain China e-commerce presence.
    Image: Lululemon

    Lululemon’s Q1 2024 sales rise 10%, China revenue soars 45%#

    Lululemon released its financial report for the first quarter of fiscal year 2024, showing a 10% YoY sales increase to $2.21 billion with international revenue up 35% and Chinese market revenue  up 45%. The company projects second-quarter revenue growth of 9% to 10%, reaching $2.4 billion to $2.42 billion, and full-year growth of 11% to 12%, reaching $10.7 billion to $10.8 billion. CEO Calvin McDonald highlighted strong first-quarter momentum, exceptional performance in China, and significant growth potential in store expansion and digital business. The brand plans to introduce new women’s leggings and expand its men’s athletic shorts series. Following the report, Lululemon’s stock price rose 4.79% to $323, with a market value of approximately $40.4 billion.

    Greater Bay Area integration boosts cross-border spending#

    Hong Kong’s commerce chief, Algernon Yau, has highlighted the success of the Greater Bay Area  (GBA) initiative, noting the rising trend of Hongkongers traveling to mainland China and Macau for shopping and entertainment. From May last year to April, Hong Kong residents made nearly 10 trips each to these areas, facilitated by improved infrastructure, such as the Hong Kong-Zhuhai-Macao Bridge and the Guangzhou-Shenzhen-Hong Kong high-speed railway. This trend underscores the effectiveness of GBA development in fostering economic activity. However, it has also posed challenges to local small and medium enterprises due to changing spending patterns. In response, the government has implemented measures to support these businesses and plans to boost local consumption by hosting around 210 mega events through 2024, with over $140.8 million (HK$1.1 billion) allocated to promote tourism and events in Hong Kong.

    Paul & Joe Beaute to quit Hong Kong, maintain China e-commerce presence#

    On June 1, French beauty brand Paul & Joe Beaute released a statement on Weibo, announcing that it will terminate  its distribution agreement with Pacifique Agencies (Far East) Ltd in mainland China and Hong Kong on June 30. Paul & Joe Beaute will also cease all operations and withdraw from Hong Kong at the end of this month. Pacifique Agencies (Far East) is responsible for managing the official Weibo and WeChat accounts in mainland China, while the Tmall Global flagship store and Douyin Global flagship store are managed by Marco Polo Cosmetics E-Commerce Co., Ltd. It is understood that these two online purchasing channels in China will not be affected.

    Chinese luxury automaker Exeed expands to Algeria with flagship models#

    Exeed Algeria, the exclusive representative of the Chinese luxury car brand Exeed, has announced the arrival  of its first high-end vehicle models in Algeria. The shipment, which embarked on April 28, includes the Exeed RX, TXL, VX, and the green-colored electric car Exeed Exlantix.The first luxury car brand from the Chery group to enter the Algerian market, Exeed combines European design aesthetics with advanced Chinese technologies.

    Xiaohongshu’s Fashion Partners Day highlights collab opportunities#

    Xiaohongshu hosted the Xiaohongshu Fashion Partners Day  from Wednesday to yesterday, themed Let Good Design Be Seen. It announced an upgrade to its fashion IP Redlabel and a partnership with the Shanghai Fashion Design Association. This partnership will involve regular industry exchanges, new fashion awards, and opportunities for merchants to collaborate and gain international exposure. Over the past year, 80% of domestic original design brands and over 70% of designer brands on Xiaohongshu have seen revenue growth, with over 1,000 fashion brands launching successful new products.

    Portugal sets sights on 500,000 annual Chinese visitors by 2026#

    Portugal aims to welcome 500,000 Chinese tourists  annually by 2026, with a target of one million overnight stays. Carlos Abade, head of the Portuguese Tourism Board, made the announcement during a visit to Beijing for the ITB China travel trade fair. In Q1 2024, Portugal welcomed 57,740 Chinese tourists, a 135% YoY increase but only 70% of 2019 levels. Abade hopes to match 2019’s figures of 385,000 guests and $246.4 million (€224 million) in revenue by year-end. China’s reopening post-Covid-19 and fewer flights have limited tourist numbers, but Porto saw a 107% YoY increase in Chinese tourists. The Tourism Board is also active on Chinese social networks like WeChat to promote Portugal.

    Maison Margiela, Marni, and Jil Sander to adopt OTB’s blockchain authentication#

    Italy’s OTB Group will introduce digital authentication certificates  using blockchain technology and NFC chips for products from Maison Margiela, Marni, and Jil Sander, starting with their AW24 collections. This innovation will allow OTB to verify around 1.5 million products annually, ensuring they are genuine branded items. Stefano Rosso, CEO of Marni and member of the Aura Blockchain Consortium board, highlighted that this move enhances transparency, customer interaction, and compliance with future legislation, while also combating counterfeits. Although OTB owns Viktor&Rolf, Amiri, and Diesel, the digital certificates have not yet been announced for these brands.

    Balmain shifts 2025 Spring menswear collection debut to Paris Fashion Week#

    Balmain, originally set to showcase its 2025 Spring menswear collection on June 21, will now launch it during Paris Fashion Week  in September. This change follows recent executive moves, with new CEO Matteo Sgarbossa, formerly of Givenchy, taking over a month ago. Sgarbossa’s mission is to work with creative director Olivier Rousteing to accelerate Balmain's global expansion.

    Frederic Arnault assumes new role#

    Frederic Arnault has been appointed  managing director of Financiere Agache, a key holding company through which the Arnault family controls LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury group. The Arnault family holds a controlling stake in LVMH, encompassing brands like Louis Vuitton, Christian Dior, and Tiffany. This appointment adds to Arnault’s role as chairman and CEO of LVMH Watches and follows Nicolas Bazire’s expired mandate. The family, including all five of Bernard Arnault’s children, plays significant roles in LVMH’s management. The succession plan for Arnault, now 75, remains uncertain despite extending the retirement age to 80. At the end of last year, the family and its controlled companies owned 48.60% of LVMH’s stake and 64.33% of its voting rights.