Pros and Cons of Luxury Brands Taking Runways to China

    Luxury brands are deciding to show their runway collections in China, but they must overcome certain factors to fully unlock these opportunities.
    Prada Uomo Spring 2020 show in Shanghai. Photo: Courtesy.
      Published   in Fashion

    In 1979, Pierre Cardin produced the first Western runway show in China, yet half a century later, China is now many brands’ first country of choice for staging shows. This is hardly surprising, as China currently accounts for more than 30 percent of all global luxury sales. This trend has been gaining momentum since the 2000s but has mushroomed over the last couple of years as more brand names venture into the Chinese market. Who can forget Fendi’s iconic show on the Great Wall of China in 2007? This was followed by Hermès’ memorable show in Shanghai’s World Financial Centre in 2008 and Armani’s seminal One Night In Beijing show, which was watched by over 1,000 guests in 2012.

    While platforms like the Shanghai International Fashion Showcase — an event helmed by the man who made Karl Lagerfeld’s Great Wall show a reality, Terence Chu — offer traditional venues where brands can present their collections during Shanghai Fashion Week, these days, many prefer to go it alone. The latest brand to announce it will show in China is British luxury giant Burberry, which will show its Fall 2020 collection in Shanghai on April 23. Last year, Valentino, Prada, and Dior all chose to produce solo runway shows in China, and even sportswear lines are making this leap (American brand Under Armour held an event at the Imperial Ancestral Temple of Beijing in 2017.)

    It’s a trend that has firmly taken hold, regardless of the city, since these shows provide direct access to the world’s largest fashion market (as an example, China now provides Valentino with roughly 30 percent of its global business). And while the spectacle and drama associated with these fashion shows have not waned, they’re no longer staged as spectacles in their own right, rather they are strategically-produced attempts to earn shares of this valuable market.

    Thus, in this current landscape, stakeholder interests have shifted due to increased domestic luxury consumption. Government policies that encourage this shift in spending have left Western companies scrambling to find new and authentic ways to avoid sales losses. For many, this has meant refocusing on the Chinese market. To ensure names like Burberry remain relevant with existing Chinese fans as domestic competition heats up, it makes sense for fashion houses to showcase inside mainland China. And while potential rewards are enticing, there are also many pitfalls. Here, Jing Daily has taken a deep dive into what luxury brands can gain by staging runway shows in China and what can unfortunately backfire.


    Increased brand value among China’s consumers#

    Westen luxury groups are increasingly dependent on Chinese luxury consumers, so they must keep ahead of the competition and increase their brand’s value or else face additional competition from local conglomerates and emerging designers. Jack Porteous, head of the retail and e-commerce sector at the China-Britain Business Council (CBBC), suggests the answer lies in dynamic content. “If companies can get the content right,” he states, “then demonstrating to Chinese consumers that they are a valued part of the brand story and the brand’s future development... will surely build a lasting connection and add brand value.”

    However, content must be authentic enough to resonate memorably with consumers in a genuine way. If it's not, netizens will be quick to vent their objections online, as they’ve done on numerous occasions. Most recently, it happened in retaliation to Dior’s ill-advised playing of a classic Chinese patriotic song, “My Motherland and Me” (“我和我的祖国”) after its Spring 2020 fashion show in Shanghai.

    Porteous argues that being on the ground in China offers increased market awareness, while hinting that these types of missteps might be avoided, saying, “[being here] will help brands to grow an understanding of the market and [its] customers. Moreover, ensuring you have Chinese designers and creatives as part of your team is your best chance of making sure you get it right and can develop a true understanding of Chinese heritage.” Indeed, repeated miscalculations in content and the reactions it produces could be sidestepped by giving on-the-ground teams more power to create legitimate brand messages.

    A commitment that evolves#

    According to Javier Cavier, Senior Director at the marketing firm Ipos, an amount of evolution in the market is necessary. “If you look historically behind the location of shows, they were driven by three main factors: They were aspirational cities within fashion like Milan, designers were based there, and they were home to an influential industry,” he says. But when it comes to China, this isn’t necessarily the case. “Ideally, the long-term desire to develop a close relationship with an audience should be on a local level,” adds Cavier. “Designers started with digital livestreaming from Western fashion weeks, and now, they step up to a physical presence. Plus, these shows are market-specific.”

    For brand activations in the Chinese market, the message to audiences should be clear: We value you, and we want to connect with you, but this needs to be carried out consistently over time.

    Ample locations to choose from#

    China has no shortage of destinations for shows, and while most companies choose to set their brand’s standard in Shanghai or Beijing, but other cities are starting to emerge as important destinations. Chanel, for one, chose to stage its Cruise 2018 collection in Chengdu. Cavier outlines the reasons behind show location choices, saying, “In China, the separation between affluence and influence is very different. The two don’t come together in the same way as they might in other countries.”

    Take Chenyang in the Hunan province, for example. Cavier points out that the city was part of “old China” 20 years ago, but like many other second-tier and third-tier cities, it now has a lot of financial wealth. “Western houses can’t necessarily do shows there as inhabitants can buy, but they can’t necessarily influence,” he says. “Hangzhou, on the other hand, home to Alibaba, might work, but [brands should] think a little harder about choices outside the capitols.”

    This only adds fuel to the idea that Western brands must be ready to match domestic conglomerates and go deeper into the country to make their mark on the Chinese market.

    Boosted engagement and visibility#

    When combining a physical runway and an online platform, Emma Sharley, CEO of the strategic marketing and branding consultancy Sharley Consulting, describes the nuances that brands should employ. “Fashion shows generate invaluable engagement for new and established luxury groups,” she says. “In addition to the physical runway experience, brands are offering added consumer access by tapping into China’s vast digital platforms. This allows fashion shows to reach a new level of sophistication, engage both discerning luxury buyers and consumers through exquisite and immersive experiences, and appeal to their underlying passion for the new.”

    As part of last year's runway show, Valentino created a Mini Program on WeChat that displayed an array of content ranging from showpieces to celebrity outfits. The brand’s CEO, Stefano Sassi, told Jing Daily in an exclusive interview last year that, years ago, the company would “just organized an event,” and that was it. But, he adds, “Now, we organize it and, in the meantime, provide this message to millions of consumers around the world. So, you have to work with the key partners that provide you with a high level of visibility.” As Jing Daily reported, topics about the show skyrocketed up Weibo’s trending list, thanks to the presence of multiple celebrities, and the hashtag #daydreamvalentino was mentioned over 300 million times on the platform. The show was followed by the launch of a capsule collection of the show in the brand’s flagship store in Beijing’s Sanlitun shopping plaza.


    Getting specialized designs right#

    Burberry's runway show in April will primarily feature the collection it showed during London Fashion Week, but the fashion house will also drop new looks designed specifically for the Chinese market and available exclusively in China’s stores and online platforms. Rachel Arthur, co-founder and Chief Innovation Officer of the communications, marketing, and PR agency Current Global, sees the value in this and stresses the need to cater to “unique tastes and demands” and the “importance of the product.”

    But Porteous urges caution to labels that want to incorporate Chinese design, culture, or heritage into a collection. “It’s a difficult tightrope to walk,” he states. “Do it right, and you build a strong emotional connection with consumers. But get it wrong, and you risk being seen as patronizing or not truly understanding China.” He continues, adding that cultural elements must be included based on design merit rather than just commercial expediency, as those maneuvers are “often transparent and rightly derided.”

    Being authentic#

    For Cavier, brand leaders need to tread carefully in general when in China. “There is often a backlash when entities are seen as pandering to the wishes of the Chinese Government,” he says. “It’s a difficult balancing act, but ask yourself: Can they be aspirational in the market but also be absolutely upfront and above board? So many things can be misconstrued by an audience that can take sentiments to new levels.”

    We have seen how many ill-judged luxury strategies can damage reputations. Dior managed to bounce back from its recent faux pas relatively quickly and with little harm done thanks to some insightful measures. Cavier’s suggestions for countering unexpected issues are simple: connect locally, be careful, and act cautiously. Due to what he calls “idiocracies in the market,” the way companies articulate their brand activations in China must be very specific. Accordingly, they can be “irreverent, creative, and push boundaries, but there are limits.”

    Choosing the right online tech partners#

    Claudia Verbost, Commercial Director of the China-focused marketing and e-commerce agency AgencyChina, confirms that the big e-commerce giants — including Alibaba, Tencent, and ByteDance — are all fighting to win over Western luxury companies. “Online is so crucial in China,” she states. “Tencent is making more attractive WeChat programs and drops, while Alibaba’s Luxury Pavillion continues to impress, along with other initiatives.” While runway shows will undoubtedly benefit from these alignments, according to Verbost, an important question remains: “Which platform is the best for your brand?”

    Making mistakes offline will affect a brand's online decisions — if not now then down the line. Burberry is collaborating with Tencent in Shenzhen to open a “social retail store” while Prada has chosen to go it alone by launching their own e-commerce shop. And while there’s risk in choosing a platform, Verbost admits that any choice is ultimately a massive opportunity.

    Facing sustainability concerns head-on#

    Given the current climate crisis, the thought of another luxury brand flying across the world to present a runway show sits uneasily with many consumers. Yet, the situation shouldn’t be seen in black-and-white terms. Arthur suggests that, in time, issues like this will become a key consideration as sustainability becomes less siloed. “Right now brands need to react to a shifting landscape and reach more consumers through any means possible,” he notes. “Opening more stores is no longer the easiest route to market, hence the physical show can boost growth. But we know there is a huge amount of environmental impact from shows. There is a carbon footprint, but you’d hope these people are on the ground [in China] already, and I’d imagine they will try to offset this.”

    Brooke Roberts-Islam, a fashion tech and sustainability innovator, says that there are additional areas “behind the scenes” where brands can look to be more ethical. “There are other areas that need to be targeted, sampling in design for one, he states. “There’s an amount of waste on carbon emissions associated with that, and I’d be interested to see how that stacks up against flights.”

    Staying ahead of rapidly shifting trends#

    Verbost, who has offices located in both Europe and China, adds that brands should also take heed of the speed factor in China. “The market requires quick movement,” she states, “so the fact that luxury companies are only stepping up their runway shows now, alongside the fact that China still isn’t the first location but a secondary add-on, proves they’re still too slow.” She wonders if these big juggernauts can adapt to the needs of a post-90s generation, particularly when it seems like millennials are focusing on local independent designers. “Having only lived through the years in which China was experiencing double-digit growth and worldwide success, the Post-90s generation is proud to be Chinese and therefore also proud of the Chinese luxury lines that the country has to offer,” she adds.

    Whether or not Western brands can move fast enough to stay up-to-date and on-trend over the next couple of years will likely indicate where mainland Chinese consumers will be spending their money.

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