Chinese Whispers: Red Streetwear, Anti-daigou initiatives, and the Rise of Multi-brand Stores

In the "Chinese Whispers" column, we share the biggest news stories about the luxury industry in China that haven't yet made it into the English language. In this week's edition, we discuss: new purchase restrictions targeting makeup daigou (resellers) in Japan, Streetwear platform YOHO!'s newfound patriotism, and The expansion of Bailian Group's "the bálancing" multi-brand boutique. 1. Premium Japanese Beauty Brands Release Purchase Restriction Order Targeting Chinese "Daigou" — Jiemian High-end Japanese beauty labels including FANCL, Shiseido, and Kose-owned Albion released a new round of purchase restriction orders to curb rampant re-sales, mainly from China. For example, each customer can now buy only one bottle of Shiseido cream each day or 10 bottles of FANCL make-up remover per week. Brands stated that the excessive purchases by the Chinese daigou agents created unusual spikes in demand that made it hard to control their goods' quality. Background The popularity of Japanese beauty brands rose rapidly in 2017, which led to a drastic increase in sales among major players. The New York-based data intelligence company L2 said brands including SK-II, Dr. Ci: Labo, Fancl, DHC, Kate, and Pola were among the most mentioned beauty products on RED, a popular Chinese social media platform for beauty lovers. There is still a long way to go to completely get rid of the daigou phenomenon. It is nearly impossible as long as the consumer demand is there. It is worth noting that many cities in China still do not have flagship stores for major luxury and beauty brands, and people living in these cities still have to use daigou (in the absence of brand e-commerce stores) if they don’t have many opportunities to travel domestically. Read More 2. China's Youth-oriented Fashion Platform YOHO! Combines Streetwear and Nationalism — Fashion Network During the 2018 A/W Shanghai Fashion Week, streetwear e-commerce platform YOHO! launched its loudly-titled "YOHO! RISING CHINA" project in collaboration with five equally shouty domestic brands,: AKOP., RANDOMEVENT, ATTEMPT, ROARINGWILD, and ENSHADOWER. As the leading streetwear player in China, with enormous influence over youth culture, YOHO!'s new project promotes streetwear with strong Chinese characteristics. Nationalism is playing a bigger and bigger role in the country's fashion market, with a China-defined streetwear trend, called "guochao (国潮)" rising strongly. Background Hip-hop fashion and streetwear culture, though popular in the West, have never gone mainstream in China. But that changed last summer owing to the popularity of reality TV rap competition The Rap of China. However, the explosion of the 'foreign' culture hip-hop and streetwear was seen as a huge threat by the Chinese government, who banned it from showing on television and in film. Finding a way to reconcile hip-hop and streetwear with Chinese culture is a pragmatic way to persevere in the current political climate. Read More 3. Bailian Retail Group Opens A New Multi-brand Boutique in Shanghai — Fashion Network Traditional department store player Bailian Retail Group launched a second store of its premium multi-brand boutique "the bálancing" in Pudong, Shanghai last week. The first opened in September 2017 in Shanghai's Xujiahui. The new store will sell brands that have not yet entered the Chinese market, including Paul Andrew, Marques’Almeida, Peter Jensen, and Ron Dorff. Background The digitalization of shopping activities in China has put great pressure on many traditional brick-and-mortar players. For the past several years, old department stores and shopping malls have made efforts to enhance their digital capacity and uniqueness to stay relevant and competitive. Bailian Retail Group, which received investment from Alibaba Group in 2017, believes the multi-brand boutique is a way to make it stand out and win over millennial shoppers who demand uniqueness and diversity. Read more

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Chinese Whispers: Red Streetwear, Anti-daigou initiatives, and the Rise of Multi-brand Stores