Reports

    China News Brief
    June 28, 2024

    Hongkong Land to invest $1B in ultra-luxury retail; Designer Shuting Qiu establishes award at alma mater.
    People walk pass a Louis Vuitton Store inside a Shopping mall on December 9, 2022 in Hong Kong. Image: Getty Images

    Hongkong Land to invest $1B in ultra-luxury retail#

    Hongkong Land announced a more than $1 billion, three-year investment in ultra-luxury retail  within Hong Kong’s Central business district, with $400 million from the developer and $600 million from tenants. The investment will create 10 maison destinations featuring luxury brands like Sotheby’s, Cartier, Tiffany & Co, and Louis Vuitton. Despite a challenging retail and office market with high vacancy rates, Hongkong Land’s Very Important Customer group, contributing around 80% of its luxury retail sales, has shown increased spending. The company plans to convert lower-floor offices in two towers to accommodate these luxury retail spaces, aiming for stronger retail income by 2028. Additionally, Hongkong Land plans to open 10 retail developments across seven Chinese cities within five years.

    Designer Shuting Qiu establishes award at alma mater#

    Chinese designer Shuting Qiu has announced the establishment of the Shuting Qiu Award  at her alma mater, the Royal Academy of Fine Arts in Antwerp, following in the footsteps of Antwerp Six member Dries Van Noten. The award will provide a 3,000 euros ($3,270) financial grant to 3BA or master’s students at the academy, recognizing their innovation and artistic achievements. Qiu, who holds both bachelor’s and master’s degrees in fashion from the Royal Academy of Fine Arts in Antwerp, was a semifinalist in the eighth edition of the LVMH Prize for Young Fashion Designers.

    Louis Vuitton hikes prices in China#

    Louis Vuitton stores in mainland China will adjust prices  for all products starting July 2. Data indicates that in February this year, the brand already increased prices for some leather goods in the Chinese market, including the Carryall, Capucines bag, and Noé bucket bag, with increases ranging from 5% to 7%. Incomplete statistics show that Louis Vuitton has adjusted prices at least nine times in the past three years.

    Lululemon opens largest Asian flagship in Beijing#

    Lululemon yesterday opened a new flagship store  in the Beijing district of Taikoo Li Sanlitun. According to staff, the newly opened lululemon Sanlitun flagship store is the brand’s largest store in Asia. Last October, Lululemon opened its then-largest store in Asia at the Jing’an Kerry Centre in Shanghai. Less than a year later, this title has now been taken by the newly opened Sanlitun flagship store.

    Volkswagen, SAIC expand EV collab in China#

    Volkswagen, SAIC, and their joint venture brands yesterday signed agreements involving multiple technical collaborations , including new product projects for SAIC Volkswagen. The two parties plan to develop three plug-in hybrid models and two pure electric models in China, with an expected rollout starting in 2026. In the past, SAIC obtained Volkswagen’s technology through licensing or other forms of collaboration, but now the roles are reversed. In April of this year, SAIC and Audi, a brand under Volkswagen, signed a cooperation agreement to jointly develop a subsequent series of electric vehicle models. The first product is expected to be officially launched in 2025.

    Pinduoduo plans new tools to boost competitiveness#

    Pinduoduo is planning to launch more tools  in the coming months beyond the automatic price adjustment feature that it introduced before the mid-year 618 shopping event as it looks to maintain its low price advantage, according to a LatePost report. The budget e-commerce platform is increasingly being hit by competitors offering lower prices for the same items.

    Air China to restore 90% of pre-pandemic international flights#

    Air China is ramping up international flights  this summer to meet travel demand and support global aviation. New routes like Beijing-Dhaka and Chengdu-Milan will launch, alongside increased frequencies on 13 routes including Beijing-Copenhagen and Chengdu-Singapore. This expansion aims to restore Air China’s international network to over 90% of pre-pandemic levels, covering 114 routes across 43 countries and regions.

    Sluggish 618 sales signal challenges for China’s retail sector#

    China’s retailers are grappling with a tough outlook following a disappointing  618 online shopping festival, where e-commerce sales declined for the first time. This reflects ongoing price wars and challenges in stimulating consumer spending, despite year-round discounts. The festival, China’s second-largest sales event, traditionally boosts household consumption, but recent trends indicate sluggish growth. Alibaba and JD.com have seen muted sales increases, prompting investor caution with both stocks down this year.

    Peter Copping appointed Lanvin’s new artistic director#

    Renowned British designer Peter Copping has been appointed  as the new artistic director of Lanvin. Copping, known for his education at Central Saint Martins and the Royal College of Art, brings a wealth of experience from roles at Sonia Rykiel, Louis Vuitton alongside Marc Jacobs, Nina Ricci, and Oscar De La Renta. His tenure as Head of Couture at Balenciaga culminated with the Fall/Winter 2024 Haute Couture show before joining Lanvin. CEO Eric Chan expressed confidence in Copping’s ability to innovate and uphold Lanvin's legacy, aligning with the Maison's commitment to meeting client expectations.

    L Catterton raises $756M in Birkenstock share sale#

    Private equity firm L Catterton and a group of employees of Birkenstock Holding Plc raised  $756 million on Wednesday from the sale of a block of shares of the US-traded footwear maker. The LVMH-backed private equity firm, L Catterton, will have about a 73% stake in Birkenstock after the sale.

    Bosideng reports strong growth in FY2023/24#

    In the fiscal year 2023/24 ending March 31, Bosideng Group reported robust growth  with a 38.4% year-on-year increase in revenue to 23.21 billion RMB ($3.64 billion), and a 43.7% rise in net profit to 3.074 billion RMB ($482 million). The down apparel segment led with a 43.8% revenue growth to 19.52 billion RMB ($3.06 billion), constituting 84.1% of total revenue. Other segments, including OEM processing, women’s apparel, and diversified clothing, also saw revenue increases, contributing to the group’s overall growth.

    Amazon takes on Temu, Shein with new low-price platform#

    Amazon is set to launch an online storefront for low-priced apparel  and home goods to compete with discount retailers like Temu and Shein. According to slides posted for Chinese third-party sellers, Amazon will ship goods directly from China, diverging from its usual practice of consolidating merchandise in US-based warehouses. This new section on Amazon’s website will initially be open only to invited sellers. An invitation for a July 5 launch event in Yiwu, a major manufacturing hub in China, was among the documents. This move follows Amazon’s recent reduction in merchant fees for low-priced clothing, aimed at competing with Shein’s low prices.

    China approval delay threatens Shein’s UK listing#

    Shein has faced criticism and scrutiny both domestically and internationally for its use of low-wage garment workers and supply chain issues, becoming a significant factor affecting its overseas listing. Moreover, its fast-selling fashion is labeled as Made in China, requiring approval from Beijing regulators  for its listing in London. Despite reports indicating Shein has secretly submitted listing documents to UK market regulators and updated its application with Chinese securities regulators to change the listing location, it has not yet received approval from the China Securities Regulatory Commission. As a result, Shein's $63 billion British London listing plan carries the risk of being canceled.