For Wen Zhou, President and CEO of 3.1 Phillip Lim, it wasn’t a question of if she would take her brand to China - but when and how she would do it. Zhou sees the region as her hometown and wants to ensure the expansion is consistent with the core values of the highly regarded American luxury label.
“Entering a market is not just about opening stores,” said Zhou during a phone interview with Jing Daily following the WWD Global Fashion & Beauty Summit in Xi’an, China. “Having the right people, having the right strategy, having the right branding, products, having the entire company’s support to be there, and also having the time and patience to test the market, are all much needed.”
Back in 2014, Zhou told South China Morning Post that rushing into the Chinese market would not be part of the brand’s strategy, anticipating “the dangers of overexposure.”
Four years on, the luxury and fashion market in China has experienced a fundamental transformation, with a wave of younger and savvier consumers entering the space, and more luxury brands vying for a share of the market. Today, an increasing amount of luxury consumption is taking place in the country, owing to the Chinese government's efforts to encourage spending at home, instead of traveling abroad.
According to a May report released by global consulting firm Bain & Company, sales of luxury goods in mainland China are expected to grow between 20 and 22 percent in 2018.
For 3.1 Phillip Lim, Zhou says the Chinese market currently accounts for less than 10 percent of the brand’s business. However, as her “slow and steady” expansion strategy is starting to take shape, the brand is now much better placed to embrace this prosperous market. “We have our management in place, we have the right structure to support the growth, and we have the right package now to be able to go after it.” In spite of this, Zhou is still cautious about opening new retail stores and is particularly tentative about expanding into China’s e-commerce platforms.
Despite its limited presence in the market, 3.1 Phillip Lim is already a household name among China’s fashionistas. During last October’s Shanghai Fashion Week, the brand installed an exhibition entitled “Fashion, Art, Flora: A Dialogue in Bloom” in an exploration of the intersection between art and fashion. The experiential installation was part of the brand’s efforts to introduce its Spring 2018 Women’s Collection to the Chinese market.
3.1 Phillip Lim’s highly respected status in the Chinese fashion circle is a recognizable achievement for a brand with only two retail stores in the country (one in Shanghai and one in Beijing). Zhou believes it has something to do with the brand’s consistent efforts both online and offline to form a sincere and authentic relationship with consumers.
On 3.1 Phillip Lim’s celebrity and KOL (key opinion leaders) strategy in China, Zhou said “I am not looking to just collaborate with people for the sake of collaboration. Every relationship that we have with any KOL or celebrities is always very authentic. They have to like the brand first. They have to be amazingly kind people and then we will find a way to work together.”
Being authentic is also the key to the brand’s digital and social media strategy. For Zhou, going digital is all about connecting with consumers. Operating online gives 3.1 Phillip Lim a different way to relate to its fans, but Zhou stresses this has to be “truly and authentically executed based on the original content of the brand.”
The brand’s designer, Phillip Lim, who has a large online following, echoed Zhou’s statement during a panel discussion at the WWD Forum, “I don’t know the rules of social media. I am approaching it with a more human point of view. I don’t speak to you, but have a conversation with you.”
The importance of being consistent with the brand’s core values also reflects Zhou’s unique interpretation of Chinese consumers. Instead of treating Chinese consumers as a special segment, she believes, “it’s not really about the Chinese customer or the American customer, or the European customer - I think it’s about the global customer.”
In a fast-moving market like China, Zhou’s softly-softly approach may appear to move slowly in comparison to other luxury brands. But Zhou is a firm believer in the brand’s philosophical business strategy, “the confidence has always been there, especially for the place where I was born and raised" she said.