Reports

    China News Brief
    July 05, 2024

    China escalates EU trade tensions with brandy probe; Dolce & Gabbana expands in China post-controversy; Shiseido’s Baum exits Chinese market.
    Models present bottles of brandy at the 7th China-South Asia Expo in Kunming, Yunnan Province, China on August 17, 2023. Image: Getty Images

    China escalates EU trade tensions with brandy probe#

    China intensified its trade tensions  with Europe today by advancing its anti-dumping investigation into European brandy imports, coinciding with the European Commission’s imposition of provisional tariffs on Chinese-made electric vehicles (EVs). Amid ongoing negotiations, China’s Commerce Ministry announced plans for a hearing on July 18 to discuss allegations of below-market pricing by European brandy producers. China has urged the EU to revoke the EV tariffs and expressed readiness to negotiate while hinting at potential retaliatory measures, including investigations into EU pork and dairy imports.

    Dolce & Gabbana expands in China post-controversy#

    According to Jiemian News, since opening its flagship store at Citic Square Shanghai in 2022, the Italian luxury brand Dolce & Gabbana has been accelerating its expansion  in several first- and second-tier cities in China. The business recently opened a Casa Dolce & Gabbana store, focusing on home furnishings, in Zhangyuan, Shanghai. In 2018, due to a controversial advertisement and remarks by its co-founder insulting China, D&G’s reputation in China plummeted. Subsequently, it temporarily halted marketing and expansion efforts in the country. Over the past few years, the brand has had minimal presence in the Chinese media landscape, with fashion magazine editors no longer attending its quarterly launches and many fashion bloggers ceasing promotion of its products. Despite the controversies, Dolce & Gabbana has maintained a stable number of stores in China over the past six years.

    Shiseido’s Baum exits Chinese market#

    According to Beijing Business Today, Shiseido’s skincare brand Baum  will cease product sales in the Chinese market. The brand’s official mini-program has already been discontinued. A customer service representative from Baum’s Tmall flagship store stated that the official flagship store will stop accepting new orders from July 10. In offline channels, industry insiders have reported that Baum counters were removed at the end of June. Baum was launched by Shiseido in 2020, positioned as a high-end skincare brand with product prices ranging from 500 RMB ($68.80) to 800 RMB ($110), emphasizing natural, environmentally friendly, and additive-free concepts. The brand entered the Chinese market for the first time in 2021.

    Arc’Teryx hosts cultural event at Mount Namcha Barwa#

    Outdoor sports brand Arc’Teryx held a cultural and artistic event  at the foot of Mount Namcha Barwa, Tibet. The event took place in the eastern Himalayas, where Arc’Teryx delved into local mountain culture through conceptual short films, dialogues, and other activities. A promotional video starring athlete Wei Guangguang, portrays the unique natural landscape and mountain culture of Mount Namcha Barwa.

    Byredo launches Mojave Ghost pop-up in Beijing#

    Byredo has unveiled its Mojave Ghost  2024 Creative Project at a pop-up store in Beijing SKP. The space blends modern design with natural elements, inspired by the Mojave Desert. The store features distinctive abstract letter patterns and an earth-toned interior. The core of the project, the Mojave Ghost fragrance, combines desert scents with fresh plant aromas.

    Bulgari unveils Rome-inspired pop-up in Shanghai#

    On July 3, Bulgari unveiled a pop-up boutique  at Shanghai’s Grand Gateway Plaza. The store, inspired by the artistic style of the brand’s flagship store on Rome’s Condotti Avenue, showcases vibrant jewelry and accessories from the brand’s 140-year legacy.

    Swedish outdoor brand Fjällräven debuts in Beijing#

    At the end of June, Swedish outdoor brand Fjällräven opened its first Family Store  in Beijing. Located in Beitou Aoyuan, the store is named “Pigeon Courtyard” due to frequent visits by pigeons. On opening day, Fjällräven held a runway show, showcasing its equipment, designs, and outdoor aesthetics. Other activities included packing challenges, knot tying, and balancing board games.

    Singapore tops APAC business travel destinations#

    According to BCD Travel’s Cities and Trends 2023 Asia Pacific Report, Singapore, Hong Kong, and Bangkok have emerged as the top destinations for business travelers  in the region, while Frankfurt, London, and Amsterdam lead globally. Singapore topped the list as the most visited APAC country last year, followed by China and Japan.

    Hong Kong eyes $143M from new hotel tax#

    On July 4, the Hong Kong Special Administrative Region Government announced its intention to submit a resolution to the Legislative Council under the Hotel Accommodation Tax Ordinance, proposing the reinstatement of the hotel accommodation tax . Earlier, the SAR’s Financial Secretary proposed in the budget that starting from January 1 next year, a 3% hotel accommodation tax would be reinstated. According to information from the Hong Kong SAR Government Newsroom, the hotel accommodation tax is expected to generate approximately HK$1.1 billion ($143 million) in annual revenue for the government.

    Thailand welcomes 3.43M Chinese tourists in H1 2024#

    In the first half of this year, Chinese tourists became Thailand’s largest visitor group  with 3.43 million arrivals, surpassing Malaysians. Malaysia followed with 2.43 million arrivals, and India with just over 1 million, based on data from the Thai Ministry of Tourism and Sports. Thailand welcomed a total of 17.5 million foreign arrivals from January to June, half of its annual target of 36.7 million. Last year, Malaysia had overtaken China as Thailand’s top tourism market. Thailand made the visa waiver permanent for Chinese tourists in March and expanded visa-free entry to travelers from 93 countries since June, up from 57 previously.

    BYD delivers first 1,000 vehicles in Indonesia#

    On July 1, BYD celebrated delivering  its first 1,000 vehicles in Indonesia, including models like the Dolphin, Seal, and Atto 3 introduced earlier this year. CEO Wang Chuanfu personally handed over the cars, highlighting Indonesia's strategic importance. The company plans to invest $1.3 billion in a new Indonesian factory capable of producing 150,000 vehicles annually, starts construction later this year.

    L’Oréal advances sustainable beauty with Debut collab#

    Beauty biotech company Debut is expanding its partnership with L’Oréal  to develop over a dozen bio-identical ingredients using advanced biomanufacturing methods. These innovations are intended to replace conventional beauty product ingredients across L’Oréal brands, enhancing sustainability by preserving biodiversity and ensuring responsible sourcing. L’Oréal sees this collaboration as pivotal in delivering more effective and environmentally friendly products.

    EU targets Chinese e-commerce with new customs duties#

    The EU is preparing to impose customs duties  on ultra-low-cost goods from Chinese online retailers, including Temu and Shein, to curb the influx of inexpensive imports. The European Commission plans to eliminate the 150 euros ($163.50) duty-free threshold for imported goods, targeting Chinese marketplaces like Temu, AliExpress, and Shein. E-commerce imports have surged, with over 2.3 billion items below the duty-free threshold entering the EU last year. The proposed legislation will require all online retailers shipping directly to EU customers to register for VAT payments online. This move aims to ensure a level playing field for EU-based retailers and address growing product safety concerns. While the initiative has support, officials warn it could increase the workload of customs officials.

    Esprit considers selling Greater China trademark rights#

    Fashion retailer Esprit’s parent company, SJ Group, recently announced that it has received proposals  and offers from multiple independent third parties regarding potential cooperation and investment. These proposals primarily involve the sale of Esprit’s trademark usage rights and interests in the Greater China region, with a transaction value of $47.5 million, approximately 345 million RMB. While final agreements have not yet been reached, Esprit’s management is currently in discussions with potential investors. Reports indicate that Esprit’s business in Greater China has generated minimal revenue and incurred losses, and its subsidiaries in Belgium, Switzerland, Germany, and Austria have filed for bankruptcy due to cash flow difficulties.

    Ralph Lauren announces Hamptons show for NYFW#

    Ralph Lauren has announced a destination show  scheduled for September 5 in the Hamptons, marking the start of New York Fashion Week. The specific location will be disclosed in the coming weeks. Despite an overall slowdown in luxury goods sales, Ralph Lauren’s performance has exceeded expectations, with revenue growing by 1.8% YoY to $1.57 billion for the three months ending March 30. Driven by price increases and full-price retailing, comparable sales in its Direct-to-Consumer (DTC) segment rose by 6%.