In “Chinese Whispers,” we share the biggest news stories about the luxury industry in China that have yet to make it into the English language.
In this week’s edition, we discuss:
- MAC Cosmetics and NetEase's trademark dispute,
- Little Red Book's monetization move, and
- Galeries Lafayette's second department store opens in Shanghai.
1. China rules against NetEase in MAC Cosmetics trademark infringement case - South Metropolis Daily
Kaola, the cross-border e-commerce platform of China's tech company NetEase, was ordered to pay up to approximately 15 million (RMB 1 million) in economic compensation to the American beauty brand MAC Cosmetics for infringing upon the brand's trademark and logos. In July 2018, the Shanghai entity of MAC Cosmetics' parent company Estée Lauder Companies sued Kaola, which did not acquire official distribution rights from the brand in China, for misusing the brand's trademark and logo. The plaintiff requested Kaola to stop selling their products, disclose the sources of products, and destroy its inventory. South Metropolis Daily said the case once again showed the difficulty Chinese e-commerce platforms face in establishing a direct business relationship with international luxury brands.
China's social e-commerce app Little Red Book has continued to monetize on the platform's vast user base. On March 20, the app officially launched the brand account feature, providing more assistance for brands to sell directly to app users. For example, the entry into a brand's flagship store will now be displayed to users on the brands' homepages. Brands can also invite influencers to co-release notes to reach more consumers.
The French high-end department store Galeries Lafayette will open its second location in China on March 23rd. The store is located in Lujiazui (陆家嘴), Shanghai's financial district. The new store has more than 80 fashion brands setting up shop inside, with some of them, such as Jacquemus, Maison Kitsune and Veja, venturing into the mainland Chinese market for the first time.