Reports

    China News Brief
    July 01, 2024

    China raises duty-free allowance for Hong Kong, Macau residents; L’Oréal CEO forecasts slower beauty market growth; Chinese designer accuses Blackpink’s Lisa of copyright infringement.
    Tourists walk by a Louis Vuitton store on April 29, 2024 in Hong Kong. The Chinese mainland will increase the luggage duty-free allowance for residents entering the mainland from Hong Kong and Macau. Image: Getty Images

    China raises duty-free allowance for Hong Kong, Macau residents#

    According to China’s Ministry of Commerce on June 30, following negotiations between mainland China and Hong Kong and Macau, it was agreed to raise the duty-free allowance  for residents of Hong Kong and Macau entering mainland China to 15,000 RMB ($2,312). This adjustment will be included in the CEPA Trade in Goods Agreement, with specific measures to be announced and implemented by relevant departments. PwC forecasts that Hong Kong’s personal luxury goods market will reach $16.1 billion (HK$125.8 billion) by 2030.

    L’Oréal CEO forecasts slower beauty market growth#

    L’Oréal expects slower growth  for the overall beauty market this year due to weakness in China after years of rapid gains, according to CEO Nicolas Hieronimus. At a JPMorgan event in Paris, he revised the global beauty market growth forecast to 4.5-5% from the earlier 5%, attributing this adjustment to China’s flat market, which had previously driven L’Oréal’s high-end cosmetics sales. Consequently, L’Oréal’s shares fell by 3.4%, with rivals Estée Lauder and Nivea maker Beiersdorf also experiencing declines. Despite a 9.4% sales increase in the first quarter, L’Oréal’s next update is anticipated on July 30.

    Chinese designer accuses Blackpink’s Lisa of copyright infringement#

    Chinese fashion designer Yang Yue has accused  Lisa, the Thai rapper from the K-pop group Blackpink, of copying her star-shaped top design in a newly released music video. Yang, who shared her claim on Xiaohongshu, sparked widespread controversy that trended on Weibo with over 130 million views. She asserted that Lisa’s stylist had copied her design, originally inspired by Beijing’s Tang Dynasty band, which she had created during her master’s studies in London. Despite posting evidence of her design process, including photos of various versions of the star-themed top, Yang faced challenges in copyright protection amid claims and apologies from fan groups rather than Lisa’s company, Lloud, regarding the alleged infringement.

    Kenzo unveils Qixi Festival collection#

    Artistic director Nigo’s Kenzo Jungle Heart collection, launched in anticipation of the Qixi Festival , a celebration of love that this year falls on August 10, draws inspiration from the “Jungle” fashion created by brand founder Kenzo Takada. Focusing on Kenzo’s classic design motifs, Nigo combines the brand’s iconic tiger totem with founder Kenzo Takada’s favorite animal, the elephant, using his symbolic visual language.

    Loewe opens 3rd Chengdu store#

    Loewe’s Chengdu Gaozhai boutique opened  at the Taikoo Li Chengdu retail complex on June 28, the brand’s third store in the city. The store covers an area of 715 square meters and features the latest men’s and women’s ready-to-wear and accessories collections, including handbags, shoes, eyewear, and small leather goods, as well as a range of store-exclusive products. The Gaozhai boutique blends traditional Chinese and Spanish elements, showcasing the brand’s Mediterranean roots while respecting the architectural heritage of Chengdu. To further integrate local culture, Loewe also commissioned Chengdu digital artist Jiang Zongbo to create a video that is displayed on the LED screens inside the boutique.

    Victoria’s Secret China reports 40% revenue growth#

    On June 26, Victoria’s Secret’s joint venture partner in China, Regina Miracle, announced its financial results  for the fiscal year ending March 31, 2024. Victoria’s Secret China reported annual revenue of approximately $240 million (HK$1.88 billion), a 40% YoY increase, and a net profit of about $11 million (HK$85.4 million), marking a turnaround from losses. In 2022, Regina Miracle announced the formation of a joint venture with Victoria’s Secret, with Victoria’s Secret holding a 51% stake and Regina Miracle holding the remaining 49%.

    Nike maintains growth streak in Chinese market#

    On June 27, Nike reported financial results  for its fiscal 2024 fourth quarter and full year ended May 31, 2024. Nike’s revenue in Greater China reached $7.5 billion, an 8% YoY increase on a constant currency basis. In the fourth quarter, revenue was $1.9 billion, up 7% YoY, maintaining a seven-quarter streak of consecutive growth.

    Jewelry brand LaoPu Gold lists in Hong Kong#

    On June 28, Chinese gold jewelry brand LaoPu Gold debuted on the Hong Kong Stock Exchange  main board, raising approximately HK$713 million ($91.5 million). Before listing, it secured HK$225 million ($28.9 million) in its first and only pre-IPO financing round in November 2023, led by Ant Capital and co-invested by Fosun Hanxing. In 2023, LaoPu Gold reported HK$3.18 billion ($408 million) in revenue, a 145.7% YoY increase, and HK$416 million ($53.4 million) in net profit, up 340% YoY.

    Laos offers visa-free entry to Chinese tourists#

    On June 26, the Minister of Information, Culture, and Tourism of Laos announced that from July 1 to December 31, 2024, tourists from Mainland China, Hong Kong, Macau, and Taiwan can visit the country for 15 days without a visa  when traveling with tourism companies and ordinary passports.

    Chinese EV giant BYD expands into Central Asian market#

    BYD has initiated production of its first plug-in hybrids  at a newly established plant in Uzbekistan, signaling the Chinese electric vehicle manufacturer’s strategic move into Central Asia. The facility, located in Jizzakh, has commenced mass production of the BYD Song Plus DM-i SUV, with an initial annual capacity set at 50,000 units. These vehicles are targeted primarily at the Central Asian market, marking a significant expansion effort by BYD in the region.

    Chinese shoppers boost South Korean retail#

    According to a survey released by payment company Visa, Chinese mainland tourists’ spending in South Korea ranks third globally , following only the US and Japan. In terms of nationality, American tourists’ expenditures are notably high in dining (21%) and food stores (5%). Japanese tourists spend significantly on medical services (17%) and retail shops (15%). Chinese mainland tourists, on the other hand, allocate a higher proportion of their spending to retail shops (21%), department stores (15%), and clothing and grocery stores (11%).

    China’s manufacturing sector contracts for 2nd month#

    In June, China’s manufacturing sector contracted  for the second consecutive month, with the official purchasing managers index remaining at 49.5, unchanged from May and below the 50-point threshold indicating growth. Production and new orders sub-indexes also showed slight declines. Meanwhile, the non-manufacturing sector expanded at a slower pace, with the non-manufacturing PMI dropping to 50.5 from 51.1 in May. Overall, China’s composite PMI, including both sectors, decreased from 51 in May to 50.5 in June. Despite manufacturers’ strong optimism, indicating confidence in future production, the National Bureau of Statistics highlighted the need for strengthened foundations in the economy’s recovery and improvement.

    Levi’s partners with McLaren for racing-inspired collection#

    Levi’s has announced a collaboration  with the British racing brand McLaren to launch the Levi’s x McLaren Racing series. This collection will simultaneously debut on July 3 in selected Levi’s stores worldwide and online, featuring items such as the Heritage Trucker jacket, Heritage 501 jeans, and racing bandanas. PVH Group’s brand Tommy Hilfiger also launched a limited edition capsule collection this month with the Mercedes F1 team, along with a lifestyle collection of ten pieces designed by Clarence Ruth in a racing sports style.

    Shein, Temu face EU scrutiny over Digital Services Act#

    The EU has demanded explanations from popular shopping platforms Shein and Temu regarding their efforts to protect consumers , including minors, under the Digital Services Act (DSA). The European Commission seeks details on how Shein and Temu handle notifications of illegal products, comply with rules against “dark patterns” in user interfaces, ensure transparency of recommender systems, and facilitate seller traceability. Both platforms must respond by July 12, following a complaint by consumer organizations.