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:
- The massive removal of influencers on the social commerce site Little Red Book,
- 10 Corso Como’s permanent exit from China, and
- Beijing SKP named as the best-performing luxury shopping mall in Asia.
1. Little Red Book’s new regulation killed the business of over 13,000 influencers – 36Kr
This week, China’s leading social commerce platform Little Red Book, which has acquired over 250 million registered users as of today, has rolled out a slew of new policies to regulate this fast-growing brand-influencer platform. One of the rules redefining the eligibility of its influencers immediately wiped out over 13,000 people, leading to an earthquake in China’s influencer community.
The new rule stipulates that only influencers with over 5,000 followers, and whose average post view of the past one month exceeds 10,000, are allowed to establish a business relationship with brands. Previously, influencers just needed to acquire 1,000 followers and 1,000 monthly average post view to be eligible. The development forced many influencers to terminate contracts with brands, which brought short-term impact on some luxury fashion brands that do digital marketing on the platform.
Zhai Fang, CEO and Co-Founder of Little Red Book, said in a public live-streaming session on May 16 that the new regulation aimed to discipline the behaviors of influencers, and that the company will come up with more rules to regulate the content-making process of influencers, such as criteria of ads and sponsored posts, in the near future.
Due to the sluggish business performance in the Chinese market, Italian buyer store 10 Corso Como plans to close down its store in Shanghai, in June, signaling the company’s full exit from China. All products selling on 10 Corso Como’ WeChat Mini Program store are currently being marked down to up to 60 percent. In 2017, the company had already closed down its store within Beijing SKP mall.
Founded by the fashion businesswoman Carla Sozzani in 1991, in Milan, 10 Corso Como is a fashion and art boutique concept that has gained global popularity in the recent decade. In 2011, Trendy Group, a Chinese fashion and lifestyle corporation, took 10 Corso Como to China but failed to market the brand to Chinese consumers. Chinese media outlet Jiemian, citing insider sources, said the failure of 10 Corso Como was due to Trendy Group’s poor management capability: they constantly reshuffled the management team, which caused the store a lack of a consistent strategy. The decision of closing down the profit-losing Beijing SKP store in 2017 was also made to improve Trendy Group’s balance sheet ahead of the initial public offerings (IPO).
3. Beijing SKP became the best-performing luxury shopping mall in Asia – LadyMax
Beijing SKP was named as the strongest performer in the luxury retail sector in Asia by sales per square foot, according to a new report released by architecture firm Sybarite and data company GlobalData. Beijing SKP was also the second best performer by the same measure across the globe, following the British luxury department store Harrods.