British Luxury Brands at LFW Look to China for Brexit Protection

    As Brexit evolves, British luxury brands, unsure of how it will affect them, are looking toward the continued buying power of Chinese consumers.
    Burberry SS20 fashion show at London Fashion Week. Photo: Courtesy of Burberry
    Tamsin SmithAuthor
      Published   in Fashion

    What started as cautious optimism has turned to concern for British brands attempting to navigate the evolving Brexit saga. With heightened tensions between Britain’s new Prime Minister Boris Johnson and the EU, the possibility of a ‘no-deal’ Brexit has become arguably more probable than ever. But what does this mean for British brands? For many, it means relying on the continued buying power of Chinese luxury consumers.

    Back in 2018, New West End CEO Jace Tyrrell, who manages London’s famous shopping district, told Jing Daily that London attracts 200 million luxury shoppers a year, and that showed no signs of slowing due to Brexit. He even claimed that the political climate could catapult London forward as a “tax-free haven for overseas shoppers.”

    However, this sunny enthusiasm may now have dampened. Amid this season’s London Fashion Week, the British Fashion Council released a statement to the press on the impact of a no-deal Brexit on the British fashion industry, emphasizing the catastrophic effects of such a scenario. The risk of moving to World Trade Organization rules means that British brands are having to assess the impacts of these tariffs, and it is unclear who will take on the additional costs — the businesses or the end consumers. According to the British Fashion Council, “based on export figures from 2018 it is estimated that switching to World Trade Organization rules would cost the fashion industry between £850 and £900 million.”

    Understandably, British luxury brands are fearful of what’s to come. Ahead of LFW, the British Fashion Council held a seminar for designers specifically around preparing for a no-deal Brexit, helping them identify the risks and challenges to their business and prepare for World Trade Organization rules in the event of no-deal being reached by the end of October.

    One of the promising solutions for British brands is to entice the ever-growing luxury Chinese consumer market. While Britain faces dwindling trade relationships with Europe, the Chinese government was among the first to prioritize trade deals with the UK. So far this year, luxury British powerhouses like Burberry and Harrods have demonstrated an intention to leverage the buying power of Chinese consumers, with WeChat Mini Programs and exclusive product launches.

    “It’s hard to say whether a big market like China can completely stop any gaps that might be created by Brexit, but more and more British brands have realized the new ecosystem created by China — from the keen consumers to the creative talents coming from China,” says Alicia Liu, Founder and Managing Director of Singing Grass Communications. “From my perspective as a specialist advising international brands on their marketing strategy in China, it’s not enough just to understand how the different marketing platforms work, it’s also important to produce tailored content to engage a digitally savvy and sophisticated Chinese audience.”

    At Burberry’s London Fashion Week show, the brand actively targeted the Chinese consumer. Burberry also displayed an impressive Chinese social media strategy, harnessing the power of its Chinese brand ambassadors, including singer Kun Chen, actress Dongyu Zhou, and rapper Lucas Huang. As a result, the British fashion house gained engagement from over 300,000 followers on Weibo, with Chinese consumers impressed by the brand’s classic craftsmanship and innovative design.

    Brand Britain is still a very popular angle with Chinese consumers,” explains Vanessa Wu, Director of Reuter Communications, a luxury integrated marketing communications agency headquartered in Shanghai, “They are looking for just the qualities that British brands possess; craftsmanship and a strong story with heritage, alongside a clear identity of fun, and even something a little bit quirky and funky. Savvy brands such as Harrods, Whittard of Chelsea, and Vivienne Westwood are using these traits in smart ways on China's unique digital eco-system and in physical retail back in the UK to show both a warm welcome and respect for their Chinese customers.”

    So where the likes of Burberry leads, other British brands may choose to follow. LFW also sought to attract a more diverse audience this year with the first-ever public sale of tickets. Interestingly, one of the two designers chosen to display their collection at the public-facing event was British supermodel Alexa Chung. Chung has gained affection in China, in part due to her British-Chinese heritage, and has previously been featured on the cover of Elle China. Last year, Chung appointed Chuan Huang as head of e-commerce at Alexachung to help shape the brand’s global e-commerce business. Huang has previously worked at Lacoste where she helped launch the brand online in China.

    According to Wu, “China is where all British luxury brands must be looking toward — all reputable business reports show that it's Chinese millennials and Gen Z who are responsible for the lion's share of luxury consumption globally. Brexit naturally causes concern among businesses that feel in the dark — not only on plans and guidance but on whatever form Brexit may take as a whole. What they can certainly rely on is the continued buying power of Chinese consumers.”

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