3 Trends That Show It's The Right Time For Indie Labels In China

A look by 3.1 Phillip Lim, a niche label that's becoming more available in China. (3.1 Phillip Lim) Even amidst slowing growth in China, for brands yet to establish a presence in the world’s second largest economy, gaining a foothold in the China market is not usually an issue of if but when and how. Whilst larger brands have the resources and expertise to expand with standalone stores and often through an omnichannel, multi-faceted approach, the challenge for many smaller brands is how to test the market in a meaningful yet cost-measured way. The rewards can be high, as can be the risks of getting it wrong. An oft-heard complaint is the lack of a mature multi-brand environment in China, as seen in London, New York, or Tokyo, which remains the typical route of entry for many niche labels. However, just as consumers’ tastes and sophistication are evolving at breakneck speed, the local retail market is also fast catching up to better meet needs. Concept stores now pepper Beijing's hutongs and the lanes of Shanghai's former French Concession. Some are more credible and better edited than others, and not all will be commercially successful; however, it points to a maturing "buyer market" that will in turn help educate and influence consumer habits and tastes. The recent government crackdown on gifting has also led consumers to seek out alternatives to the big brands; this coupled with more experimental and individualist preferences is driving demand for niche brands. In McKinsey's latest report on consumer and shopper insights, the share of respondents agreeing or strongly agreeing that "I prefer luxury items that are low-key and understated" was 66 percent, compared to 50 percent who said so in 2010. Here are some of the major trends associated with the rise of niche brands that we're seeing in China: Multi-brand boutiques Currently, the more established multi-brand boutiques in China such as Dong Liang and Brand New China focus exclusively on domestic designers. However, there is a rising number of concept stores and buyers working to introduce new international labels to the Chinese market. In particular, the last 12 months have seen a spate of multi-brand boutiques open in Tier 1 as well as Tier 2 cities. Notable examples include Triple-Major’s new five-story outpost in Shanghai, Ink in Beijing, and Serious in Guangzhou. Whilst the first wave of independent multi-brands such as Le Lutin and THE VILLA carried more recognizable brands such as Jason Wu and 3.1 Philip Lim, this new crop of multi-brand boutiques are experimenting with brands as diverse as Isabel Benenato, Christopher Lemaire, Boris Bidjan Saberi, and Smith/Grey. Specialist multi-brand boutiques such as OAK and Coterie have also emerged which focus on jewelry and eyewear respectively. The recent arrival of international concept store 10 Corso Como as well as the opening of Galeries Lafayette’s “fashion store” in Beijing and Lane Crawford’s flagship in Shanghai are also helping to grow consumer awareness and pave the way for niche brands to make their mark in China. Multi-brand websites Similarly, online has become a relatively low-risk testing ground for new labels. Multi-brand websites in China such as XINLELU.COM, Zooq and Yetang provide a localized distribution channel for brands seeking an alternative from the standardized interfaces of Taobao and Tmall stores. Building a presence through online multi-brand platforms has its own advantages, especially if there is already some brand awareness established. Usually, e-tailers have a broader customer base across China which is quickly scaleable, allowing a brand to instantly reach consumers from Anhui to Zhejiang and gain insights into trends across geographies. For brands working on a consignment basis, e-tailers also typically offer higher margins than their brick-and-mortar counterparts since consignment fees are lower. The e-commerce market in China is now the second largest in the world, with growth outpacing all other countries, and recent research by Observer Solutions suggests that two-thirds of consumers would be willing to buy luxury goods online. Trade shows In the wholesale space, an increasing number of local trades hows is also helping smaller labels connect with the Chinese market. Novomania, CHIC-Young Blood and MICAM currently hold exhibitions twice a year in Beijing and Shanghai, introducing a range of contemporary and niche labels to local buyers. Recently, Hong Kong-based trade show The Hub has also held a series of forums and events to actively promoting the multi-brand channel in the Greater China region. Additionally, B2B websites, which aim to replicate the trades how experience online, have recently expanded into China. Barcelona-based site Agorique opened offices in Shanghai in September, and Joor also has plans to launch a China-specific site after it received US$15 million in Series B funding this July. Jillian Xin is the founder of XINLELU.COM, a website dedicated to introducing hard-to-find indie labels to the Chinese market. Since launching in 2012, it has amassed a loyal coterie of sophisticated shoppers and now has two brick-and-mortar locations in Shanghai.

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3 Trends That Show It's The Right Time For Indie Labels In China