Canada Goose Engrains ‘The New Luxury’ Concept In Its China Business

In late 2018, Canada Goose opened the doors of its first stores in China, including one located in downtown Beijing Sanlitun. Despite the freezing-cold temperatures, a long line of shoppers queued outside the building to buy Canada Goose’s down parkas. Local enthusiasm for the outerwear brand’s debut in China was evident. “Since we entered China in 2018, we have been thankful for the warm reception from Chinese consumers,” says Larry Li, Canada Goose’s China President. “They’re very enthusiastic about our brand — the products we’re launching, the stores we’re opening, and what the future holds for us.“ Over four years on, the luxury performance label famed for its down jackets has turned China into one of its largest markets. The country is now home to the company’s largest store network, with locations at 22 and employees at 550. Three new openings have taken place in the key cities of Xi’an, Qingdao, and Tianjin, with another one on the way in Chengdu by the end of this year. A critical part of Canada Goose’s success as a 1 billion Canadian dollar business (860 million), the outerwear giant is participating at China’s largest import fair — China International Import Expo (CIIE) — to underline its long-term commitment to the country and celebrate the journey into its fifth year there. How has it built relevance in China, and how will activities at the CIIE further drive the brand to reach its ambitious one billion-dollar goal? A China-tailored growth strategy Products and marketing tactics that turn out to be viral in the west may not necessarily work in China. To fully capitalize on this lucrative market, brands must create a tailored strategy, which Canada Goose knew from day one. Li revealed how “in the very beginning, we approached China differently than any other market we’ve entered. We built our direct-to-consumer business first, while in other regions, we entered with distributors or wholesale partners. China has such an established consumer culture, and our brand strength was already significant there.” The outerwear label’s expansion in China via directly operated physical stores has been vital for its growth. Offline retail points allowed locals to feel the quality and craftsmanship of its goods and experience the performance before making their actual purchase. By doing so, it succeeded in gaining trust and deepened knowledge of homegrown shoppers’ behavior and preferences. This close interaction helped Canada Goose realize the huge potential of its non-parka categories in the domestic market. According to the business’ results of the second quarter of the fiscal year 2023, lightweight down coats sales grew by 46 percent compared to the same quarter last year and represented 44 percent of total sales. Fleece and knitwear sales grew more than 60 percent, and among these the fleece category grew 170 percent. In 2021, the 65-year-old establishment chose to expand into footwear, launching the category in China prior to any other countries. Indeed, the mainland is the first port of call for many of Canada Goose’s initiatives. The brand announced homegrown designer Angel Chen as its first-ever guest designer in 2020 and launched two capsule collections the following year. In 2020, the business created its first gamified experience at its Chengdu exhibition, where consumers could try on clothes virtually and travel through different seasons. 2021 saw the company experiment with naked-eye 3D LED advertising placements in Shenyang, Wuhan, and Chengdu to promote its footwear. “China’s diversity and flexibility in digital ecosystems allow us to produce rich, vivid content that illustrates our brand in innovative ways,” Li states. Expecting a “spillover effect” from CIIE This year marks the first time Canada Goose is participating in the China International Import Expo (CIIE). The biannual exhibition, launched in 2018, is one of the most important events for global companies operating in the country: leading global luxury groups — including LVMH, Kering, Richemont, and Tapestry — as well as beauty conglomerates like L’Oréal and Estée Lauder have all signed up. “We understand the immense ‘spillover effect’ of the CIIE,” Li tells Jing Daily, “where trends shown there have a national and even global significance.” Canada Goose’s Pavilion-themed “Live in the Open: Embracing China,” occupies three main areas, allowing full visitor immersion. Starting from “The North, Where it All Began,” the label showcases Canada Goose’s roots — how it was born in the north, its iconic products, and how it built relevance across the seasons. Alongside this, “From the Canadian North to China” is where the label showcases its collaboration collections with Chinese talents. Lastly, “HUMANATURE” outlines the brand’s commitment to sustainability and the progress made so far. “HUMANATURE platform unites our sustainability and values-based initiatives, underscoring our purpose to keep the planet cold and the people on it warm,” remarks Li. Winning China with the “new luxury” concept Despite global headwinds, Chinese consumers have been resilient. By 2025 the area is expected to account for nearly half of the global luxury goods market. As the younger generation becomes one of the main drivers of the sector, brands must reflect the “new luxury concept” embraced by this demographic. According to the latest report by strategic consulting firm Bain, quality and durability are the primary purchasing considerations for global fashion consumers, with Chinese consumers valuing quality the most. The down jacket leader is well-positioned here. By offering a lifetime warranty for its parkas, it has cemented a remarkable reputation in this regard. “Traditional luxury was typically about exclusivity and elitism, but today’s luxury brands are focused on making quality products, standing for something bigger than themselves,” explains Li, “especially through sustainability and corporate citizenship, enabling their consumers to thrive, and aligning to their consumers’ personal beliefs.” This June, PwC’s survey revealed that 34 percent of Chinese consumers “often” or “always” agree that a business’ environmental actions influence purchase behavior compared to 29 percent in the US. In light of the growing cohort of climate-conscious shoppers, Li shared with Jing Daily that the company is planning in the country its first-ever corporate social responsibility program outside Canada. The endeavor will focus on exploring a sustainable model for reaching human-nature harmony with reputable institutions. Sustainability, as well as national pride, are among the top priorities of domestic buyers. Given the rising guochao trend, creating local cultural relevance is critical in the China market. Beyond collaborations with promising local designers like Angel Chen, Feng Chen Wang, and artist Xu Zhen, the brand has recently announced actress Qiu Tian as their ambassador — “Goose Person.” The “new luxury concept” is now fully engrained in Canada Goose’s business model. Yet, brand identity and DNA are still important when competing against local and international rivals. Li concludes, “the growth strategies — DTC, category expansion, and local cultural relevance — are all underscored by authenticity. We are a purpose-driven brand that has remained true to ourselves throughout the past 65 years. That will continue to be a priority as we further evolve.”

Canada Goose Engrains ‘The New Luxury’ Concept In Its China Business

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Published November 07, 2022

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Canada Goose Engrains ‘The New Luxury’ Concept In Its China Business