Global brands expand in China despite retail decline

Retail sales of clothing, shoes, hats, and textiles in mainland China declined 5.2% YoY to 93.6 billion RMB in July. It might come as a surprise, then, that several international brands are forging ahead with new store openings, signaling long-term vision and confidence in Greater China’s consumer base and defying the broader fashion, retail and luxury slowdown in China and beyond. In fact, China’s luxury market remains crucial in the global luxury retail sector despite ongoing economic challenges. New horizons According to Savills’ latest Global Luxury Retail report, China accounted for 41% of luxury store openings in 2023, as Jing Daily reported, a slight drop from the previous year, reflecting broader economic issues. These challenges include declining consumer confidence, falling residential property prices, and rising unemployment rates. Despite these hurdles, China’s market still presents opportunities for brands that can adeptly adapt to the conditions. Meanwhile, the broader Asia-Pacific region has shown resilience, seeing a 31% year-on-year increase in luxury store openings, and contributing 17% of global openings last year. Tokyo and Singapore played key roles, benefiting from a surge in tourist spending, a weaker yen, and relaxed visa policies for mainland Chinese tourists. Long-term vision Some brands are betting on resilience and recovery across the region, and are moving in despite the uncertainty ahead. French designer brand Ann Andelman is quietly expanding its presence across China, launching new stores. The brand has been embraced for its gender-neutral designs and is gaining traction through celebrity endorsements and effective marketing strategies. Jonak, the renowned French footwear brand, has opened its first Hong Kong store at K11 Musea, Tsim Sha Tsui, the start of its expansion into Asia. Founded in 1964, Jonak is celebrated for its Parisian elegance and superior craftsmanship. The brand partnered with Rue Madame Fashion Group to enhance its footprint in this key Asian fashion hub. A month ago, Thai wellness brand Panpuri also opened in Hong Kong’s K11 Musea, which is apparently the start of its global expansion. Meanwhile, South Korean outdoor lifestyle brand Discovery Expedition has launched on Tmall and plans to open physical stores across China, starting in Shanghai, capitalizing on the growing demand for high-quality outdoor gear. Also among noteworthy entrants, American fashion retailer Frame has unveiled its first pop-up in the Asia-Pacific region at Shanghai’s Qiantan – a move overseen by Global CEO Nicolas Dreyfus and Asia-Pacific CEO June-Mee Hong. The store, conceived in collaboration with architectural studio Skynoa, echoes the aesthetic of Frame’s flagship stores in New York and London. Simultaneously, Italian fast-fashion label Subdued has made its Asian debut with a new outlet in Shanghai. After securing investment valued at approximately 70 million euros ($78 million) from Nuo, a VC fund created by Exor and The World-Wide Investment Company Ltd, apparently “Hong Kong’s oldest family office,” Subdued (with already 130 stores worldwide) is aiming to capture Chinas youth market with its accessible, size-inclusive fashion and competitive pricing. Its apparel is priced between 200 RMB ($28.50) and 600 RMB ($85.56). Laying foundations These expansions not only highlight the diverse strategies and segments these brands are tapping into, but also underscore the dynamic nature of retail in China, where opportunities abound despite broader economic and demographic worries. The continued investment in physical stores by international brands reflects a long-term commitment to the Chinese market, recognizing its potential for future growth. The success of these expansions will hinge on brands’ ability to adapt quickly to changing consumer preferences and economic conditions. As the country’s middle class continues to grow and evolve, those brands that can successfully navigate the current uncertainties may be well-positioned to capitalize on future opportunities in what remains a crucial market for global luxury and fashion retail.

Global brands expand in China despite retail decline

How Bottega Veneta weaved China’s forever it bag

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Global brands expand in China despite retail decline

How Bottega Veneta weaved China’s forever it bag