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Arc'teryx Peet's Coffee Skiing

Arc’teryx Capitalizes On Coffee and Skiing Fever This Winter Season

Overview

Arc’teryx has collaborated with coffee roaster and retailer Peet’s Coffee to launch a coffee shop at the sportswear brand’s academy in Beidahu, Jilin Province — one of the most popular skiing destinations in China. Featuring the slogan “A power station for skiers,” the in-store coffee shop offers two special coffee drinks exclusively for the Baidahu location in addition to the regular menu. 

Peet’s Coffee has also launched canned drinks, which are convenient for replenishing energy while skiing. Elsewhere, the two parties will roll out outdoor coffee brewing workshops in Shanghai and Beijing in December, providing outdoor enthusiasts with professional tutorials and experiences. 

Peet’s Coffee has launched canned drinks with Arc’teryx Academy. Photo: Peet’s WeChat

Netizens’ Reaction

The crossover between coffee and outdoor sports has excited consumers in China. With the winter sports season kicking off in November, skiing resorts in northern China are among travelers’ top choices. On Weibo, WeChat, and Xiaohongshu, users have shown their desire to visit the new coffee shop. Given urban-dwellers’ coffee-drinking habits, they enjoy following similar routines on their trips.

Verdict

Fashion and beauty players have tapped the coffee boom in China since last year, and Arc’teryx is not the first brand to open a coffee shop in an alpine resort. From December 2021 to February 2022, Fendi presented Fendi Caffe and a pop-up space with its winter sports capsule collection at Changbaishan International Resort. The temporary café became a social media-friendly spot that attracted skiers to check in.

Fendi opened a pop-up café at Changbaishan International Resort from December 2021 to February 2022. Photo: Fendi

However, as lockdowns and travel restrictions surge since the mainland adjusted its COVID-19 policy earlier this month, the inbound tourism prospects of this winter season seems to be gloomy. It’s uncertain if foot traffic to skiing resorts this year will soar like it did last year. 

Still, Arc’teryx’s initiative showcases its commitment to its loyal communities in the Chinese market. With workshops, clinics, seminars, and socials, the Arc’teryx Academies program covers alpinism, backcountry skiing, running, and climbing. The partnership with Peet’s Coffee not only expands the services of the outdoor apparel label’s Beidahu presence but also engages a broader audience of travelers, adventurers, and coffee lovers. 

Raf Simons Has Shuttered. What Happens To The Adidas Collaborations Now?

What happened: On November 21, Belgian fashion designer Raf Simons announced that he is shuttering his eponymous 27-year-old brand. In a statement on Instagram, the creative visionary confirmed the closure, adding: “I lack the words to share how proud I am of all that we have achieved.” He then went on to thank his team, buyers, fans, friends, family, and collaborators.

The latest Spring 23 collection will therefore be Raf Simons’ last. It also means that there will be no more of his Adidas footwear, which has been a trailblazer among sports-high fashion crossovers since the first Ozweegos, Terrex, and Response Trail 1 sneakers were revealed at Paris Fashion Week in 2013.

In conversation with Jing Daily, sneaker journalist Ross Dwyer said, “what’s most interesting to me about Raf Simons’ sneaker collaborations is how ahead of his time he was.” When the designer started working with Adidas, the high-fashion trainer was nowhere near today’s level of hype and mainstream acceptance. “The shoes that came out of those partnerships were ‘designer’s sneakers’ instead of ‘designer sneakers’ if that makes sense,” explained Dwyer.

As part of the duo’s longstanding partnership, the RS Ozweego became a firm favorite amongst Raf Simons and Adidas supporters. Photo: Adidas

The Jing Take: The growth of luxury athleisure collaborations has been well reflected in Raf Simons’ output with the leading sportswear name. It took time for consumers to fall in love with his experimentally garish Ozweego designs; they did not sell well for the first two years, forever landing in the discount sections. But that cartoonishly oversized footwear actually became one of the luxury label’s most reliable signatures in sportswear, always selling out. 

By 2015, all the most esteemed luxury houses were producing their own chunky runner silhouettes, attesting to the collab’s bankability. Right now, on Chinese StockX Dewu, the original Ozweego by Raf Simons has outsold all styles, currently at 178,000 sales almost 10 times the sales of Adidas’ solo design of the same silhouette illustrating the popularity has reached China. 

Now, nearly two decades later, many are claiming sneaker culture has reached boiling point. Is it coincidental that the Belgian brand is closing at such a time, moving away from Adidas drops before the shoe’s popularity finally wanes (if it ever does)?

Raf Simons’ termination certainly spurs reflection upon his leading influence in the streetwear space and, rather notably, in sneakers. As Dwyer noted, “Raf’s contributions to sneaker collaboration were both deeply respectful and inherently free-spirited. I don’t think we’d see a lot of the partnerships we see today if they didn’t have the impact they did back then.”

Raf Simons famously designed his very own Stan Smiths, the iconic Adidas silhouette. Photo: Adidas

And although in the (pretentious) world of sneakers the Raf Simons x Adidas takes did not necessarily become the holy grail — they generally sold below retail on resale sites, and cannot be compared to coveted styles like Aimé Leon Dore’s New Balances or the Fragment x Sacai x Nike drops — their role in pushing fashion’s embrace of sportswear was never in question. People did pay above the average price of an Adidas for each style yet prices were generally accessible, with a pair of Raf Simons slides going for $130 (930 RMB), which is $95 (679 RMB) more than the classics. 

It was not only Raf Simons’ consumers shopping for them though. These collaborations helped merge the camps of sneakerheads and fashion fans, paving the way for today’s solid generation of hypebeasts. After all, the world-famous ASAP Mob even dedicated a whole song to Raf Simons’ Adidas sneakers — their positioning within popular culture is momentous. In short, the Belgian designer was one of the great innovators in sportswear collaborations, walking so that designers such as Wales Bonner, Gucci, and Balenciaga could all run confidently with Adidas.

It’s too early to predict whether this means that these sneakers are going to reach high price premiums, though it is highly likely. But if luxury lines can learn anything from Raf Simons’ partnership with the German sports powerhouse, it’s that long-term footwear tie-ups can be a reliable route for popular cultural stability.

Adidas can thank Raf Simons for feeding its position within luxury fashion, and the Belgian label, in return, owes a lot of its mainstream admiration to the sports brand.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Disgraced Popstar Kris Wu Sentenced To 13 Years For Rape

Yesterday a court in Beijing convicted Canadian-Chinese popstar Kris Wu of raping three women between November and December 2020. He was also found guilty of assembling a crowd to engage in sexual activity, a crime in China. Not only has Wu received a 13-year sentence but he will also be deported from the country after serving the prison time as is typical for foreign criminals. The disgraced 32-year-old star holds a Canadian passport. 

Recommended ReadingWhat the Kris Wu Scandal Says About ChinaBy Gemma A. Williams
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Today on Weibo, the hashtag “Kris Wu sentenced 13 years in the first trial” has received 10.1 billion views already, becoming the top trending topic on the social media platform. Comments on the platform include: “It’s my first time seeing an idol being sentenced 13 years. I’m witnessing history,” (with over 96,000 likes); another posted that “The sentence is longer than his career history lol” (with 86,000); while one wrote, “He has a date with 2035” (31,000).

Kris Wu faces 13 years in Chinese jail for rape, plus a 600 million RMB fine for tax evasion. Photo: Kris Wu/Weibo

Wu was first detained by police in Beijing on July 31, 2021 after public allegations by an 18-year-old female student Du Meizhu went viral on WeChat. He was accused of date-raping her whilst she was intoxicated at the age of 17, as well as sexually exploiting other girls, some also under 18.

Also known as Wu Yifan, the rap star and singer initially denied the allegations and threatened a defamation suit against Du. At the time he was one of the mainland’s biggest stars with ambassadorships for the likes of Louis Vuitton, Bulgari, L’Oreal Men, and Lancome as well as Chinese companies such as Tencent Video, c-beauty brand Kans, and mobile game Honor of Kings, all of whom quickly ended their relationships with him.  

The length of the sentence is also notable. Media initially reported that three to ten years would be likely if he was found guilty. But judging by the 13 given, it’s likely that the courts want to make an example out of this celebrity. In addition, authorities have also fined Wu $84 million (600 million RMB) for tax evasion. The message from the government is clear: in China, celebrity status carries little weight when you’re caught breaking the law.  

arianee web3 fashion

From Moncler To YSL, Arianee Is Bringing The Metaverse To The Mainstream Fashion Crowd

One of the first platforms to consider luxury’s place within the developing Web3 landscape, Arianee has solidified its presence among the leading startups shaping the online world since its launch in 2018. Now, it’s working alongside some of fashion’s biggest magnates including the likes of Moncler, YSL Beauty, and Breitling. The Paris-based enterprise has helped spark mainstream discourse surrounding luxury fashion’s place in Web3 and contributed to the blockchain playbook that companies worldwide turn to today. It offers solutions to brands seeking to tokenize and distribute online assets: specializing in digital twins, NFTs as community access, and proof of attendance. 

With the digital world still in its infancy, the channel represents the importance of education and accessibility, as seen in its commitment to ensuring that labels are equipped with the correct personalized toolkit for cracking the virtual terrain. As a result of its efforts, the platform received $20.7 million (148.6 million RMB) in fundraising in May this year, contributing to the acceleration of its international expansion. More recently, the company partnered with POAP Studio in a bid to bring virtual proof of attendance to mainstream fashion. With the concept of “proof of attendance protocols” taking off particularly during seasons such as fashion week (Christian Louboutin’s Paris Fashion Week event utilized POAPs at its Eiffel Tower showcase) Arianee’s latest move allows users to own a one-stop wallet system, making the onboarding process as streamlined as possible. 

To celebrate the platform’s success and vision towards a global takeover, Jing Meta sat down with Pierre Nicolas Hurstel, CEO and co-founder of the channel, to discuss his ambitions of creating a decentralized future in fashion, why the industry needs to reshape its resell and drop strategies, and Arianee’s commitment to supporting the next era of digital consumers.

The luxury metaverse company partnered with YSL Beauty earlier this year to create a branded wallet and token-gated Web3 hub for the group. Photo: Arianee

Following its launch, the platform has become one of the leading names within the space. What are your ambitions for Arianee?

What we want to build is a different internet, where people manage their data and where the relationship with the brands they like is more communal. And we believe that the link will be a digital asset (our token), which can be used as a digital passport and to enhance physical products. We believe that tokenization will not only unlock amazing and engaging use cases but also transform the way the interaction happens without personal data collection or the need for a centralized platform.

Can you tell us about some of the brands that Arianee has worked with? 

We’ve worked with Moncler, YSL Beauty, and Breitling. We have minted more than 500,000 NFTs for every single Breitling watch that has been produced and sold in the past couple of years, which will become the foundation of ticket-gated services and extended membership opportunities. YSL Beauty first launched a collection of 10,000 free NFTs that were dedicated to its most engaged community members, which were all claimed in a very short amount of time. And with Moncler, we just launched an NFT collection with Antoni Tudisco for its 70th anniversary. In all of these, you can see the potential of enhancing products or experiences with digital assets that can complement them and offer a different take on creativity. 

Since entering the world of Web3, has Arianee faced any challenges?

Education is always a challenge — making sure that the ecosystem within understands what’s going on. It’s about recognizing what the core principles are. The other challenge is adoption. This is still a technology that is used by very few people across the globe. That’s why our main focus is on onboarding the next billion new customers, rather than just leveraging the OGs in the space. 

Luxury is all about exclusive experiences. How do you think Web3 can leverage that?

I think Web3 and luxury have resonated a lot because of scarcity and ownership, which are core elements of the luxury business model. But if you look at drops and models today, lines in front of stores, online randomized raffles, and people who just grab products and then resell them with a premium — it’s broken. Web3 is going to make these drops less stressful for real brand fans and a very rewarding experience. I also think there’s this whole thing of being able to enhance yourself through avatars; it’s the beginning of a new business model for luxury.

China luxury branded residences

How China’s Branded Residences Are Bringing Luxury Home

Property has always been a key wealth asset for the affluent across the globe, but the rise of branded residences has given new life to both the financial and emotional value of bricks and mortar. Savills’ Spotlight: Branded Residences — 2022 report points out that there are 640 branded residence schemes operating worldwide, with premiums of 30 percent over comparable non-branded residences. 

Luxury automobile branded residences have, for example, stepped up a gear in hotspot locations. Porsche Design Tower and Aston Martin Residences have already opened and are de facto landmark properties in Miami, Florida, while Bentley Residences is scheduled for completion in 2026. China, too, has become an emerging destination for branded residences.

Raffles Residences in One Shenzhen Bay is located in a 72-storey high building, which also includes a concert hall and car showroom. Photo: Accor

Yet, according to Savills, even with a fast rate of pipeline growth, the Chinese market remains underdeveloped. By volume of pipeline, the US, UAE, Vietnam, and Mexico are forecast to add the largest number of branded residence schemes. The opening of hotel branded residences all around China, such as Beijing’s Fours Seasons Private Residences and Raffles Residences at One Shenzhen Bay, has created a niche market for luxury real estate.

China’s complex property game

A recent Knight Frank survey shows that 43 percent of respondents in Asia would be willing to pay a premium for ownership of a branded residence. Hotel branded residences are particularly appealing to residents who wish to take advantage of the simple convenience, first-rate security, and exclusivity of many hotel amenities and services. However, it is the trend of lifestyle branded residences that is reframing the overall concept of luxury living. A distinctive focus on signature design is a hallmark of Chengdu Art Residence by Armani/Casa and Bulgari Residences Shanghai.

Giorgio Armani’s interior design studio Armani / Casa chose Chengdu for its first residential project in China. Photo: Weibo

Recent events such as the near-collapse of China’s second-largest property developer, Evergrande, have led to the market being regarded as a high-risk investment. The roots of this perception are complex, but the result has been a dramatic fall in potential investor confidence. As reported in The Economist, new project starts in China decreased by 45 percent and the value of new home sales by 29 percent in July compared with a year ago. 

Despite a depressed property market, branded residences are nonetheless well-positioned to capitalize on growth opportunities. Riyan Itani, head of global residential development at Savills, explains that “China has a huge potential when it comes to branded residences due to the rise of High Net Wealth households, strong regional cities, and tremendous touristic potential.” 

China’s growing high-net-worth households

Wealth generation at the top of the pyramid is certainly a key factor in boosting future demand for premium and luxury real estate.  Credit Suisse’s Global Wealth Report 2022 states that the number of US dollar millionaires in China is to increase by 97 percent to 12.2 million (compared to an increase of 13 percent for the US) from 2021 to 2026. 

It seems that the luxury real estate market remains resilient to overall market pressures. According to China Real Estate Information Corp (CRIC), in the first half of 2022, the average selling price of luxury properties valued at more than $1.4 million (10 million RMB) increased 11 percent from a year earlier.

The global outlook for branded residences remains strong, although many developers are still hesitant to embark on capital-intensive projects in mainland China. This might end up being a serious missed opportunity. Branded residences that offer very high levels of service and design and are situated in prime locations are considered to be “trophy assets.” And buyers, particularly in Asia, greatly value the prestige of owning or living in a branded residence. 

Status Symbols

Luxury living has become a conspicuous status symbol for the Chinese affluent, which is certainly consistent with global trends. The country’s COVID lockdowns compounded people’s interest in living in a comfortable, stylish space. Branded residences embody a distinctive advantage versus other potentially competitive offerings. This plays directly on the consumer desire to live a luxurious life, and by extension, lifestyle.

“The concept is adaptable to several situations where it can be tailored to supply luxury primary housing or second home/investment products in the areas of natural beauty,” Itani points out. For example projects like The Residences at the St. Regis Lijiang, located in one of Yunnan Province’s most unspoiled natural areas, offers wealthy buyers a dreamy second home and staycation venue.

 

Some Asia-based companies like Kerry Properties and Swire, saw the potential in branded luxury residences years ago. In China today, the opportunity is huge. A blend of long-term vision, optimism, and balanced pragmatism might just be a winning formula for developers to turn owning branded property into living the luxury dream.

Glyn Atwal is an associate professor at Burgundy School of Business (France). He is co-author of Luxury Brands in China and India (Palgrave Macmillan).

Web3 digital designers china

Meet China’s Digital Designers Going Global

Fresh from his role as CGI artist on Gucci’s latest “Good Game” campaign under the creative direction of Alessandro Michele, Zongbo Jiang is a cool customer. “I’m very shy…I don’t care about self-promoting,” he tells Jing Daily at the recent Into The Metaverse event hosted by Le Book. Alongside Gucci, his vibrant, immersive aesthetic has already been tapped by Vogue China, Metaverse Fashion Week, Ravyn Lenae, and Victor Wong. 

Jiang is one of a new, exciting wave of digital designers from China making their mark on Web3 not only at home but globally. He joins the likes of Scarlett Wang, Keiga Hua Hui, Stephy Fung, and others exploring the limits of the medium. “I want to make work that explores issues such as mental health, animal rights, and the environment in a virtual world: to create a community that can provoke change as we all share this commonality — of living on this planet,” says Jiang, who hails from Chengdu, and calls himself a “visual activist” rather than a digital designer. 

Jiang is one of a new, exciting wave of digital designers from China making their mark on Web3. His works explores issues, such as mental health, animal rights and environment in the virtual world. Image: Courtesy of Jiang Zongbo

Jiang, along with contemporary from the Royal College of Art Xiaoling Jin from Ningbo, was recently recognized with an award at the recent ITS graduate showcase in Trieste. Barbara Franchin, president of the ITS Foundation, explains that while the ITS digital fashion contest is only two years old, they had “definitely witnessed a strong fascination from Chinese young designers in the freedom the digital realm allows for.” She continues, “they seem to have a sense of the poetic, of the purely symbolic, in their digital projects that is, for the moment, stronger than what we have received from other countries.”  

In fact, it was Suzhou-born Hua Keiga Hui who won ITS’ inaugural Digital Fashion Award in 2021 and was on hand this year to present 2022’s version. Hua sees his role as one of “creating additional value in the real world.” He honed his virtual craft at Japan’s Kyoto Seika University, where he studied product design including 3D. He’s now building inclusive and progressive digital worlds to create the future landscape of emerging Asian youth subcultures. 

Suzhou-born Hua Keiga Hui, who won ITS’ inaugural Digital Fashion Award in 2021, sees his role as one of “creating additional value in the real world.” Image: Courtesy of Hua Keiga Hui

“Once I was back in China last year I realized that people here love to look at Web3 and the metaverse, and I think it comes from platforms like Douyin or Xiaohongshu where they are already being very prolific. It’s also coming from communities or subcultures like techno where they quite like to combine these with computer tech into underground nightclubs,” Hua remarks on a Zoom call from Shanghai. He’s currently the main squeeze of Ambush, where he art directed the limited edition collaboration with Reese’s Pieces in the so-called “breakfastverse,” which gives the commodity cereal a bold, pop-inspired makeover in Web3.  

The role of the Chinaverse and its expansion is becoming increasingly important in the mainland. “Despite the modifications, Beijing recognizes the potential of the digital economy and big tech has the backing and support from the Party from their five-year plan in place to achieve leadership in the new and developing space,” retail analyst Tiffany Lung observes. 

Meanwhile, the country’s tech sector continues its rollout. Alibaba Group heavily utilized metaverse technologies in this year’s Double 11 e-commerce shopping festival. The multinational’s research institute DAMO Academy introduced an XR-powered marketplace on Tmall and Taobao that enables consumers to shop for merchandise in their customizable avatars. Its Openverse platform, co-developed with Tencent, has completed pre-A round financing to the tune of hundreds of millions of RMB while Tmall Luxury Pavilion has created its virtual influencer Timo to showcase 3D digital collectibles. It also launched 3D virtual complexes on its mobile app to allow consumers to preview items in real-life digital scenarios.

Metaverse issues are now high on educational platforms too: this November saw the launch in Wuhan of the first China Metaverse Fashion Design Competition (中国元宇宙服装设计大赛), developed by tech company Zettakit (泽塔云) and featuring over 20 fashion and art education institutions. And Istituto Marangoni Shanghai held a graduate show which straddled Web3 via a showcase directed by fashion duo Pronounce. It’s quite evident that we can see a boom in terms of investment coming into the Chinese Web 3 space. These resources allow creators to have the freedom to experiment with all types of digital designs,” Hong Kong-born Scarlett Yang, known for her ethereal, otherworldly visuals, suggests. 

Hong Kong-born Scarlett Yang is known for her ethereal, otherworldly visuals. Image: Courtesy of Scarlett Yang

Yang’s capsule for The Fabricant earlier this year combined inspiration from gaming avatars with human biology to explore how clothes and movement mold identity in the virtual world. She has also been working with creative technologist communities within China and has been, she enthuses, “very inspired by the ‘can do’ spirit that I believe is inherently cultural. It comes from the open attitude towards technological experimentation, which is very valuable these days in building a truly impactful digital future.” Her talent has captured the attention of the V&A Museum, Paco Rabanne, and SHOWstudio to name a few. 

The Chinese diaspora is clearly enabling this educational wave to extend globally. Richard Hobbs from fashion company Brand New Vision points to the team behind digital fashion platform altar.space, which records and celebrates archival and influential historic fashion pieces. “Their head of 3D design, Yao Yao, has a great aesthetic and a focus on attention to detail from both a replica and a fantastical viewpoint. They are going to make a mark in this important area which is important for bringing history and education into web3,” he affirms.

Other stars of this nascent sector include CSM alumnus Christie Lau, an emerging name currently commanding the field. Born in Hong Kong and based in London, she earned herself a place in the top 10 CMS graduates to know after presenting three gigantic cubes printed with QR codes which, when scanned, revealed Instagram filters featuring digital garments. Currently, she’s working on a brief for an AR world filter on the photo-sharing app to create a filter inspired by her own culture. 

Other stars of this nascent sector include CSM alumnus Christie Lau, an emerging name currently commanding the field. Instagram Screenshot

“For me, my heritage is a weird one,” Lau states. “I haven’t been back to Hong Kong for a while but I miss it. But for this, I’m using one of the few things that I feel connects me to my Chinese identity — going to the Columbarium on Tomb Sweeping Day to pay my respects to my grandparents. Now I’m reimagining one in the digital space.” 

As the creator of the first 3D Qipao, Jing Daily favorite Stephy Fung has also often turned to her Chinese roots to inspire her aesthetic. In April 2022 the artist launched an NFT drop with The Fabricant inspired by the Chinese zodiac; for Chinese New Year, she will collaborate with Dragon City the metaverse platform in Decentraland. Janice Wu, event planner and ambassador at the virtual metropolis, thinks that domestic Web3 practitioners and creatives are well placed to become leading lights globally because they grew up digitally native. “Some of them live in an almost hyper-realistic world, born from Chinese tradition but becoming this kaleidoscope of gaming, Hanfu, and cosplay but also entirely futuristic. It’s fascinating,” she declares.

Fashion film festivals are also embracing the Chinaverse: the latest editions of Diane Pernet’s ASVOFF in Paris included a China strand that featured the emerging talent Shan Hua, also from the Royal College of Art. Her short graduate creation entitled They, which explored self-acceptance and the quest for beauty, also claimed Best Animation at London Web Fest. “These creatives are pushing the boundaries of the fashion industry’s imagination with more diverse, visual effects. Her film was like a poetic journey for me,” says Tasha Lau, founder of Labelhood and ASVOFFS judge. 

The emerging talent Shan Hua’s short graduate creation entitled They, which explored self-acceptance and the quest for beauty, claimed Best Animation at London Web Fest. Image Courtesy of Shan Hua

My grandfather would tell me about the metaverse in China, but of course, that might be a special case,” Hua jokes. “What’s uniquely Chinese about the new wave of local ‘metaversers’ is the poetry and mood in traditional Chinese painting which I can also see in Chinese digital artists. There are some digital artists who are bringing Buddhist culture to the digital world too such as LinKunhao, LuYang, Tian Xiaolei, LinKunhao.”

Hua combines a digital identity with fashion-based thinking, and it’s this that marks her and her contemporaries out as leaders in their respective fields. She goes on, “I feel that the digital world is filled with the desires and fantasies of many people. What cannot be realized in reality may become a creative force in the digital world.” 

In her project 2 5 2 6, fashion designer and professor Ying Gao from the University of Quebec in Montreal takes this one step further by asking, “if the role of fashion designers is to imbue a form and a function to materials intended to dress the body, I wonder about the question of the immaterial garment and the virtual body, devoid of substance, when the digital has become a real ‘second nature.’” 

We might well be facing this (admittedly obscure) prospect in the decades to come. But in the work of these creatives, such changes begin to look less daunting. Their art has already made Web3 into something more powerful — and beautiful — than it might otherwise have been. 

 

JD.com Pledges Wealth Redistribution As Part Of China’s ‘Common Prosperity’ Drive

What Happened:  E-commerce giant JD.com is to cut top executive pay at the company starting from the first day of 2023. Senior management at the firm will have their salaries reduced by 10–20 percent, with the highest earners taking the biggest cut. This will affect 2,000 employees at the deputy director level and above.

Founder Richard Liu announced the move in an email to all employees on November 22. In it, he apologized to those with salary cuts and explained further that the money will be redistributed to front-line employees at the firm. The business, which employs around 540,000 people, will be giving more benefits to some employees and contractors such as their 100,000+ express delivery drivers who currently don’t receive social security contributions from the company. This will also change in 2023. Liu also declared that he would donate $14 million (100 million RMB) to a fund helping dependents of employees who were majorly disabled or had died on the job.  

The business will be giving more benefits to their 100,000+ express delivery drivers who currently don’t receive social security contributions from the company. Weibo Screenshot

The Jing Take: This push for better wealth redistribution at one of China’s biggest tech establishments is an explicit response to the government’s call to promote “common prosperity.” President Xi Jinping first introduced the phrase in August 2021 but it has been reiterated at key events such as this year’s Party Congress. It pledges to regulate excessively high incomes and encourage people and companies with large revenues to give back to society in efforts to reduce income inequality in the country. 

The public response to JD.com’s move has been, predictably, overwhelmingly positive online. One Weibo user remarked, “why is he (Liu) full of vision and generosity? Because he was born in the countryside. He does not forget where he came from”; the statement received more than 31,000 likes. Some netizens praised the company for being “responsible” while others offered positive comparisons to its main competitor: “much better than a certain Ma,” read one post in reference to the Alibaba founder.

After a tough second quarter, JD.com has been performing well, with reportedly “record-breaking” results from this year’s Double Eleven. It beat analyst expectations in an 11 percent revenue increase this third quarter at $34.2 billion (243.5 billion RMB). This was after Xu Lei was promoted to CEO in April when billionaire founder Liu stepped down. The latest move by JD.com means more change at the e-commerce outfit, clearly signaling its commitment to Xi’s promotion of “people-centered development.”

JD.com fund frontline workers benefits

JD.com has been performing well, with reportedly “record-breaking” results from this year’s Double Eleven. Photo: Shutterstock

How will all this affect retail and luxury? Upon the introduction of “common prosperity,” luxury stocks were sent into a nosedive, with the Jing Daily KraneShares China Global Luxury Index hitting a new low of 324.43 in August 2021. But since then luxury has bounced back. Global reports like that by Bain and Altagamma foresee global growth in the future. 

By prioritizing lower and middle class growth and stability in China, this could mean positive things for retail in the long run and more aspirational purchasing as overall incomes rise. However rich luxury buyers with cuts to their “excessively high incomes” might rightly be discouraged from purchasing as much or as often. 

China is in the midst of a careful balancing act between encouraging growth, stabilizing an economy shaken by persistent Covid-19 lockdowns, and a crackdown on the culture of rampant conspicuous consumption of luxury. It is a delicate situation but over time, addressing massive income inequality can only help to stabilize a nation: both socially and economically. JD.com is coming out ahead by making this move. And we’re predicting that more firms will follow suit. 

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Chinese art collections CCC

Why Chinese Consumers Are Not Your Average Art Collectors

The following is an excerpt from the newly published second edition of Jing Daily’s report Winning China’s High-Spending Cultural Consumer: The Future Of Luxury, packed with all-new data, case studies, and exclusive interviews. Get your copy today on our Reports page.

For those working with the China market, the focus has officially shifted away from millennials and toward Gen Z. But brands, institutions, and organizations that want to  stay ahead of the curve must look beyond generational demographics and turn their attention to a new type of grouping: the Chinese Cultural Consumer (CCC).

Within that crucial realm of luxury consumption sits the Chinese art collector. “When we speak to these collectors, they’re not limited only to street art, sneakers, toys, and all that. It’s more about lifestyle in general for them,” said Isaure de Viel Castel, Head of 20th Century Contemporary Art Department at Phillips. “They collect the rare sneakers, and they like to buy collectibles because it’s so much fun, and they’ll follow the artist and what the artist is doing.”

Expanding on that topic and providing you with a more detailed breakdown of the Chinese art collector, below are three defining characteristics taken from Winning China’s High-Spending Cultural Consumer: The Future Of Luxury.

  • Think 360-degree consumption

The CCC’s deep interest in culture is largely unaffected by commercial considerations. According to Karl Cyprien, managing director of Archive Editions, the China-specific  platform launched by artist Daniel Arsham, “The hierarchy between the mediums is  relatively nonexistent compared to the West.” The CCC cannot be likened to classic art collectors, Cyprien said, as they act in an educated, fan-like fashion, collecting and consuming culture in all its facets, whether through branded merchandise or works of art.

  • Popular culture and collaboration is king

Despite the rise of national pride in recent decades, eyes continue to be drawn to the global stage. Joseph Yang, Senior Specialist, Modern and Contemporary Art Department, Poly Auction explained, “Although young Chinese collectors are its key target demographic, art originating from popular culture has surprisingly drawn the attention of seasoned collectors. Artworks are, after all, all about diversified styles and ideas; they follow the path of development in arts history.”

The CCC’s habits are still largely driven by their understanding of global pop culture, which also explains their attraction to cross-sector collaboration. Understanding a well-curated marriage of significant names is the ultimate badge of culture capital in China.  

Collaborations can serve as a gateway for art consumption as well, with collectible toy figurines by the likes of KAWS or Daniel Arsham serving as a route for young Chinese to take their first steps into the art world, as highlighted by X Museum co-founder Michael Xufu.

Our Jing Daily survey for the report found that exclusivity, status, and cultural significance were the next most important factors driving the CCC — all of which  characterize a demographic of aspiration-led consumers, whose choices enhance their personal cultural capital through globally relevant signifiers and exhibit a well-rounded awareness of value.

  • Younger generations lead the way

Newer buyers, particularly those with overseas education or work experience, have driven demand for Western and modern and contemporary art. While this interest is unlikely to challenge the overall dominance of Chinese art, it will continue to incentivize major auction houses to expand their business portfolios. One case in point is Sotheby’s Hong Kong’s Spring 2021 contemporary art evening sales featuring works by foreign artists, including from younger generations. 

The auction set a record for a single offering of Western contemporary art in Asia at HKD 573.2 million ($73.8 million). It also earned a record high of HKD 952 million (about $122.5 million) in total sales and all 21 items offered were sold. 

Sotheby’s record-setting contemporary evening sale in Asia included Salman Toor’s Three Boys (left) and Zimbabwean artist Kudzanai-Violet Hwami’s Skye weNehanda (right). Photo: Sotheby’s

Last year, the dual auctions from Phillips and Poly Auction of 20th century and contemporary art and design in Hong Kong boasted a 100 percent sell-through rate for a combined total of HKD 701.5 million ($90.4 million) and set records for 17 artists. Fueled by the need to adapt to the impact of the pandemic and attract more digitally savvy young consumers, auction houses have been diversifying their businesses beyond public auctions and private sales. Emerging strategies include collaborations along with livestreams and virtual events. 

In February 2021, Sotheby’s partnered with Italian luxury brand Bulgari for its “Masters Week” auction.The event included a livestream, “From Bernini to Bulgari: The Beauty of Baroque,” featuring Bulgari’s creative director for  jewelry, Sotheby’s executives, and a British art historian discussing the background behind a piece at auction. Bulgari also provided the jewelry items worn by some of Sotheby’s specialists during the auction. 

According to Yang, “There are many collectors who were born in the 1990s. Some of them have collections which are very international, encompassing many key international artworks; some collectors favor things that are more personal and more influential.”

Get your copy of Winning China’s High-Spending Cultural Consumer: The Future Of Luxury on our Reports page.

nan knits labelhood

Skechers’ 2022 World Cup Celebration, Clot x Be@rbrick’s Save Pandas, And Nan Knits’ Retail Tie-Up: China Collabs Of The Week

This week’s industry-shaking news of Raf Simons shuttering his eponymous, 27-year-old brand has triggered preemptive nostalgia for his winning collaborations. Since launching their first pair in 2013, Raf Simons and Adidas’ sneakers have paved the way for the independent designer x sportswear crossover movement. 

On Weibo, the hashtag #rafsimons# has over 100k views. However, you can scour historical searches to realize just how much the Raf Simons’ Adidas collaborations won over the hearts of Chinese sneaker fans over the years.

Other, more optimistic, headlines this week include Clot’s Be@rbrick panda and American footwear giant Skechers announcing a new line with local brand Pros By Ch dedicated to FIFA World Cup Qatar 2022. Independent designer-nurturer Labelhood has also revealed a new collaboration with exciting talent Nan Knits. 

Read our verdict below, and to have these weekly updates straight to your inbox, subscribe to our Collabs and Drops newsletter here.

CLOT X BE@RBRICK PANDA 

clot x bearbrick

The Clot x Medicom Toy Be@rbrick Panda is part of Clot’s month-long Panda campaign. Photo: Clot

Launch date: November 25

Trend: Streetwear x Art Toy 

Verdict: Partnering with one of China’s most popular toy makers Medicom Toy on Clot x Be@rbrick, a new set of collectibles, is a great way to support panda conservation in China. It amps up the public identities of Clot and Be@rbrick in terms of good morale while enhancing both brands’ cultural capital. The design is based on Clot’s panda mascot Ning Ning and leans into a new product category that further hones the existing symbols within the brand. The Be@rbricks collab also increases the overall value of Clot’s clothing and accessory collection. 

SKECHERS X PROS BY CH 

skechers x pros by ch

One of the jerseys by Skechers and Pros By Ch to celebrate the Fifa World Cup 2022. Photo: Pros By Ch Weibo

Launch date: November 10

Trend: Sportswear x Local Brand

Verdict: Resurrecting the ’90s, Skechers and Pro By Ch have achieved the full retro aesthetic with their local co-branded sportswear and sneaker line. It’s been launched to celebrate the FIFA World Cup Qatar 2022, which is hugely popular in China, with the nation being the largest sponsor this time round. Despite Skechers boasting 744k fans on Weibo, and Pros By Ch, established in 2014, having 37k, there are currently just 716 views of the hashtag #skechers x pros#. Though, for Skechers, working with a niche local name will definitely resonate with consumers, and the World Cup connection ensures it will get into mainstream view. For Pros By Ch, this partnership brings exposure to new like-minded consumers. Score for both teams.

NAN KNITS X LABELHOOD

Nan Knits has brought its signatures to the pop-up decor at Labelhood. Photo: Labelhood

Launch date: November 14th to November 30th

Trend: Retailer x Independent Designer

Verdict: Independent Chinese label Nan Knits has been invited by Labelhood Leihu to decorate two spaces of the retail store for winter. The psychedelic art-inspired space allows consumers to really perceive the brand’s artistic identity, with everything constructed from rainbow knit fabrics. Domestic retailers have become the best way for local brands to showcase their collections and intimately connect with new fanbases. Even though Nan Knits is still relatively unknown, the distinct, unique designs are winning over Generation Z and their love of knitwear. 

Address: LABELHOOD Leihu Flagship Store , No. 2, Lane 764, Changle Road, Jing’an District, Shanghai Time: November 14th to November 30th Address: Fumin, Jing’an District , Shanghai Road 184

stove-boiling tea hobby

‘Stove-Boiled Tea’ — China’s Newest Way To Chillax

What Happened: “Stove-boiled tea” (围炉煮茶) is quickly becoming the latest slow-living lifestyle trend among young Chinese consumers. As the name suggests, the activity refers to lightly roasting tea leaves before boiling them in a pot on a charcoal-filled stove. People sit around the stove and have snacks such as fruits, nuts, and desserts with their hot tea, which can be enjoyed alone or blended with flowers and milk. 

Originally practiced by ethnic minorities in China’s remote Yunnan Province, “stove-boiled tea” has gained viral traction across social media this fall. 

On the app Xiaohongshu, there are over 40,000 posts on the topic, which have collectively received about 12 million views. On Weibo, relevant hashtags have also gained tens of millions of views. For instance, the hashtag “How wonderful it is to have stove-boiled tea in winter” (冬日围炉煮茶有多香) has gained over 18 million views.

“Stove-boiled tea” is typically set against a picturesque backdrop with Chinese decorations. Photo: Xiaohongshu

The activity has attracted young Chinese consumers through its association with natural surroundings. People normally sit in outside or indoor courtyards with gravel floors, bonsais and flowers, and traditional Chinese decorations. Some people also post their love of stove-boiled tea while wearing traditional Hanfu clothing in these picturesque settings. 

Additionally, “stove-boiled tea” is affordable and customizable. A review of Xiaohongshu posts suggests that these services at tea normally cost between $28-56 (200 to 400 RMB). 

The Jing Take: Drinking loose-leaf tea has been commonly perceived as a habit of middle-aged or older people in China, whereas young people favor bubble tea or coffee. However, this trend represents the revival of Chinese tea culture among Chinese youngsters yearning for a slower life. The art of boiling tea is a time-consuming process that requires constant attention to the temperature in order to properly “cook” it. 

Similar to other 2022 lifestyle trends such as glamping, cycling, and frisbee, “stove-boiled tea” reflects young Chinese consumers’ desire to escape urban settings, embrace the outdoors, and practice mindfulness. As one Xiaohongshu post testifies, “It is absolutely relaxing to drink hot tea, feel the fall breeze, and chat with best friends.” Another Xiaohongshu user states she “felt peaceful when stepping into the courtyard — a wonderland secluded from the bustling city.”

Recommended ReadingWhy Chinese Women Are Embracing ‘Chillax’By Huiyan Chen
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The practice is also the latest addition to China’s “Guochao,” or “national trend” movement, referring to the integration of Chinese cultural elements into modern life. Slow-boil was the dominant way to make tea in ancient China until the faster steeping method became widespread during the Ming Dynasty (1368-1644). It is telling that, in 2022, the old method is making a noticeable comeback in the hands of Chinese millennials and Gen-Zers.

Earlier in summer, the C-drama hit A Dream of Splendor, which follows three women transforming a tea shop into a successful restaurant during the Song Dynasty, led many fans to imitate the desserts, clothing, and tea from that period. “Stove-boiled tea” complements the fall and winter seasons and transcends into a widely-followed lifestyle. China’s younger generations increasingly appreciate the health benefit and spiritual comfort associated with drinking tea and slow living.

Afternoon tea has taken off in China following the hit show, A Dream of Splendor. Photo: Xiaohongshu

Chinese tea culture could be the next focus for luxury brands as they strive to identify new ways to connect with discerning young consumers. Some brands already offer afternoon tea services in partnership with five-star hotels in China. The popularity of “stove-boiled tea” might inspire them to introduce a broader range of products and experiences that pays homage to the traditional Chinese way of tea, and life, which values patience and serenity. 

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Bain & Co. report China luxury Gen Alpha

Bain Report: China To Make Up 40% Of Luxury Consumers By 2030

Key Takeaways:

  • Chinese shoppers will make up 40 percent of all luxury consumers by 2030.

  • Gen Z and Gen Alpha luxury spending is expected to grow three times faster than other cohorts.

  • India’s luxury market is forecasted to expand to 3.5 times today’s size by 2030, making it a country to watch.
  • The global luxury market in 2023 will be more resilient to recession than during the 2009 financial crisis due to a larger consumer base and better balance across regions.

Even as economic conditions worsen, the global luxury market marches on. A recent study released by Bain & Co. and Altagamma projects that the industry will reach $1.4 trillion in sales revenue this year, growing 21 percent from 2021. Despite high inflation and rising costs of living, as well as ongoing COVID-19 restrictions, some 95 percent of luxury brands reported positive growth in 2022.

That said, China is still performing below 2021 figures and not expected to recover until the middle of next year. Notably, after previously reporting that Chinese consumers would make up half of the global luxury market by 2025, the global consultancy has amended its forecast: They will represent 40 percent of all luxury consumers by 2030.

“China (and Chinese) are a fundamental growth driver in the long-term,” said Federica Levato, Senior Partner and EMEA Leader Fashion & Luxury at Bain & Co. “The lower incidence forecasted in 2030 versus figures in 2025 has to be found in the unleashing of additional pockets of growth related to mature and emerging markets, and not a slowdown of China and Chinese, which are expected to continue their strong growth trajectory.” 

Below, we take a closer look at the factors shaping the global luxury sector — and what brands can do to prepare for a potentially turbulent future.

Old and new markets take center stage

As China remains challenged due to COVID-19 restrictions, other parts of the world have begun to shine. According to Bain, the US luxury market is still leading in size while Europe has managed to surpass pre-pandemic levels thanks to an uptick in local demand and overseas shoppers. In the third quarter, Kering’s sales in Western Europe jumped 74 percent year-onover-year, boosting group-wide revenue to 5.14 billion euros, while LVMH and Hermès posted double-digit growth thanks to strong performances in Europe and the US.

Newer luxury markets have emerged too, including Southeast Asia, although it lacks the infrastructure to facilitate expansion locally. In South Asia, India is a country to keep tabs on, with a luxury market forecasted to swell to 3.5 times today’s size by 2030. In a show of confidence for this trajectory, Aditya Birla Fashion and Retail Limited (ABFRL) recently announced a partnership with Galeries Lafayette to bring luxury department stores to Delhi and Mumbai by 2025.

Recommended ReadingFor Luxury, Is India the Next China?By Adina-Laura Achim
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Luxury consumers are getting younger and pickier 

In addition to the geographic shift, the generational one is also critically shaping the space. Bain and Altagamma’s analysis found that Gen Y and Gen Z accounted for the entire growth of the global luxury market in 2022. In the coming years, Gen Z and Gen Alpha spending will grow three times faster than other generations until 2030, when they will make up a whopping one-third of the market. 

“[The] impact for brands of these young consumers entering the market will be substantial,” Levato told Jing Daily. “Brands will be asked to adapt their value proposition to the new and evolving Pyramid of Values, where purpose and expanded brand meaning have a central role in order to remain relevant.” 

Brands will be asked to adapt their value proposition to the new and evolving Pyramid of Values, where purpose and expanded brand meaning have a central role in order to remain relevant.” 

Evaluating relevance and offerings will be especially important in China, where Gen Alpha has been deeply influenced by the country’s development. “[They are] wealthier than ever, but increasingly isolated,” explained Adam Knight, co-founder of digital agency TONG. “Years of restricted outbound travel, limited study abroad options, and escalating geopolitical tensions are likely to lead to further disengagement with the outside world.” 

Although most of Gen Alpha is still under 12-years-old, it’s not too early to start courting this cohort — consumers today are purchasing high-end goods as early as 15-years-old. However, being more “knowledgeable and choosy” as studies found, brands will need to work harder to gain their loyalty. 

“Old hat loyalty programs are now being innovated with social incentive schemes,” Knight pointed out. “These flip traditional VIP schemes on their head, incentivizing brand engagement and advocacy pre-purchase rather than post, gamifying the user experience with points rewards for each interaction with a brand to be redeemed against exclusive content and discounts.”

Even if a recession hits, global luxury will be resilient 

Supported by these various growth avenues, Bain predicts two scenarios for 2023: Sales of personal luxury goods will either increase 3 percent to 5 percent, or 6 percent to 8 percent at constant exchange rates, depending on the strength of China’s recovery and the ability of the US and Europe to withstand economic headwinds. Regardless of which, Bain believes the luxury market should still be able to withstand the potential recession next year.

Not only does the current industry have a larger consumer base than it did during the 2009 financial crisis — topping 400 million today — but brands have done a better job at developing and balancing business across regions and generations. Furthermore, “brands have been able to nurture their top, ultra-high-net-worth customers, traditionally less impacted by economic downturns,” Levato added. “They constitute a ‘safer’ bucket of sales for brands to rely on, especially during periods of economic pressure.”

Ultimately, big spenders will likely keep on spending in times of economic hardship. And with brands already adept at navigating through turbulence — be it lockdowns or the latest tech trends — they should be able to weather the rocky road ahead.

price hikes Dior luxury Chanel

Luxury Gets More Unaffordable As Prices Hike During Crisis, Inflation, And Looming Recession

“When did Prada become so expensive?” So asked users on the lifestyle platform Xiaohongshu earlier this year. When indeed? Price hikes seem sadly, inevitable. But in recent years the pace and frequency at which they have been introduced in the luxury industry are staggering. 

In January 2023, Hermès will increase prices by 5 to 10 percent, while Dior, Gucci, Saint Laurent, and Richemont’s Cartier have already raised theirs again. Louis Vuitton has done it twice this year. The list goes on and on. 

When it comes to China, such hikes are especially notable. At the beginning of the year, Celine raised prices for the second time in just three months leading to it being branded “unaffordable” by Xiaohongshu users. And on that platform netizens have also been sharing stories of uplifts from Chanel: for instance, the 2.55 bag rose by $560 (4,000 RMB) in one year alone. 

According to Chinese media, the Chanel 2.55 bag is priced at 75,500 RMB, up from 71,500 RMB last November.

Even more stark is the example of Chanel’s Classic Flap handbag. When Lagerfeld released his inaugural design in 1983, it was a breakout success. Granted, it’s now synonymous with the Chanel brand but does that justify a staggering 84 percent rise in the mainland in just three years? At $10,500 (75,500 RMB) it’s close to the price tag of an Hermès Birkin bag. 

Local media reported this month that American jeweler Tiffany will apply adjustments to its entire line in China with estimates ranging anywhere from a staggering 20 to 59 percent, depending on collections, but these reports are unconfirmed. Amid few signs of this peaking, Jing Daily explores why this might be happening during times of war, social crisis and looming recession and whether it’s a wise strategy in today’s biggest luxury market. 

China’s online response  

Firstly, this is very much on the minds of consumers. Hashtags on the topic include: “Chanel increases prices again,” with 1.44 million views; “Chanel mini CF handbag costs over 60,000 RMB for the first time, ” with 1.12 million; “Tiffany increases prices for all products” with 2.44 million; and “Hermès to notably increase prices next year” with 2.55 million. Granted, the average Weibo user is unlikely to be a luxury follower or buyer and so the common theme may be along the lines of “those who can afford them probably don’t care about the hikes anyway.” 

When a short video from Jing Daily’s WeChat account on this very topic was posted on November 13, viewers expressed mixed reactions. One comment reads: “Keep increasing the price! The resale price of my ‘nano speed’ is already higher than when I bought it, so if I sell it now I can get another handbag for free.” On the other hand, others questioned the move: “Without a corresponding ‘hike’ in their design value, I don’t understand why they are so expensive,” another reader wrote. 

This sentiment is echoed by Arnold Ma, founder of marketing agency Qumin, who observes that “without product innovation or big changes in China, price hikes are the easiest way for brands to create more desirability the less people can afford it, the more it will be in demand.” Though as he points out, this sounds less like a long-term or well-thought-out strategy, and more like an attempt at creating “manufactured scarcity.” 

Are luxury consumers still biting?

Regardless of undersupply or not, the mainland luxury market is buying; it accounted for approximately 21 percent of its global counterpart in 2021, up from 20 percent in 2020. According to Ma, “brands are doing this [rising prices] in China due to the increase of sales numbers in the country,” and this “sends a signal that Chinese luxury buyers are not that price sensitive.” 

Additionally, “The New Faces of Chinese Luxury Shoppers” report found a surge in first-time luxury fashion consumers that was responsible for 88 percent of the Chinese luxury fashion market growth in 2021. About 50 percent of this group bought luxury fashion items (including ready-to-wear, footwear, leather goods, and accessories) for the first time between October 2020 and September 2021. That would indicate that many of these shoppers won’t be aware of previous prices. They are also much younger, as data from Xiaohongshu found, and might take figures at face value rather than remembering previously lower ones.  

However, Chen Liang, managing partner of marketing consultancy éCLAIR, has concerns about solely banking on these shoppers. “These first-time purchasers are very unloyal and susceptible to social changes and trends. So it is not rare to see them shift from entry-level luxury to others at similar price levels or simply stop spending money, because of the loss and instability resulting from the pandemic.” 

Liang also thinks that houses employ this strategy as they have begun to “retreat back to their high-value lines” such as leather goods and jewelry to cater to those HNWIs who actively want “more expensive items.” Hermès’ strong results in Q3 send a clear signal to shift more focus to these categories. 

Cultural and consumer trends impacting the market

Meanwhile, éCLAIR has recently found a hot search word across global social media platforms (including Xiaohongshu, Instagram, Pinterest, and Tiktok): “old money style,” or 老钱风. “To understand this aesthetic, you need to look to the timeless styles of the inherited wealth of yesteryear’s most famous family dynasties, like the Kennedys, the Gettys, and the Vanderbilts,” Liang says. This trend celebrates logo-less, classic, even “quiet” luxury — with extremely high quality and craftsmanship — and is producing notable sales for names like Brunello Cucinelli, Stefano Ricci, Loro Piana, and even domestic name Icicle

Xiaohongshu users share looks that fall under the “old money style.” Photo: Xiaohongshu

Still, the underlying question remains: are local consumers’ wallets impervious? “While strategies like this have worked very well in the past when the Chinese economy was booming and GDP growth was at double digits, I think going forward it will be counterproductive,” Ma explains. He puts this down to a number of factors including an overall decline in luxury consumption (houses like LVMH, Burberry and Richmont have all seen a drop in sales), governmental policy (Xi’s “Common Prosperity” could discourage too much luxury consumption), and a rise in nationalism (seen in the growth and maturity of local companies combined with a move away by younger shoppers from global names).  

“Mix all this with the Guochao movement and the new younger luxury consumer who is less attracted by foreign heritage or big showy logos, we can see the potential outcome already,” Ma remarks. He mentions the latest report from Barclays, which shows a staggering drop of 40 percent in luxury consumption from China’s domestic market between this April and July, during major lockdowns. The market’s “underperformance” indicates that “China’s appetite might not be as high as it used to be.”

Another challenge for luxury is the country’s growing acceptance of and interest in the resale market. The younger generation faces struggles far more challenging than those of previous cohorts (the climate emergency among them) and as such, some have adopted a bleaker outlook. Faced with the sharp increase in life pressures caused by global inflation and high unemployment, young consumers have had to become savvier. The secondhand platform Plum’s latest report showed that it had 100,000 consumers participating during Double 11. In fact, Plum, also known as Hongbulin, completed $100 million (700 million RMB) in round C financing, and its income has doubled compared with last year.

The very foundations of luxury are built upon scarcity. Even in times of extreme crisis, whether it is the pandemic or the impending recession, the sector, on the whole, appeared bulletproof. As luxury expert Daniel Langer writes: “pricing mistakes — along with weak brand positioning and a deficit in luxury experience creation — are among the top shortcomings.” But could 2023 change all that? Brands that increase once too often might well find themselves in the middle of an unwanted backlash. If this happens anywhere, it will happen in China. 

L'Oréal Group Shihyo K-beauty

L’Oréal Targets K-Beauty, C-Beauty And J-Beauty Consumers With New Korean Brand

Shihyo, meaning “the wisdom of time,” is L’Oréal Group’s newest K-beauty brand launched out of South Korea, East Asia’s beauty and skincare mecca. The launch takes place nearly a week after L’Oréal’s first North Asia Industry Innovation Summit at the China International Import Expo, where the beauty conglomerate cited it would target the “unique ecosystem of the ‘beauty triangle’ of C-beauty, J-beauty and K-beauty” across East Asia. 

The new brand is inspired and informed by East Asian solar terms, otherwise known as the traditional harvest “calendar” consisting of 24 harvest elements including grain, heat, cold dew and other components. The brand’s collection comprises 24 herbal constituents steeped in fermented rice and other Asian innovated processes. 

The cosmetics giant debuted the beauty brand via Loshian, its first-ever third-party joint venture created through a partnership with South Korean hospitality chain Shilla Hotel and Korean equity firm Anchor Equity Capital. Shihyo’s new flagship store called “Seoul Garden” will open within The Shilla Seoul, a luxury hotel located in the South Korean capital.

According to Fabrice Megarbane, president of L’Oréal North Asia and CEO of L’Oréal China, who spoke at the group’s Industry Innovation Summit: “There are a lot of cultural relevance and commonalities in the beauty needs in [China, Korea, Japan] while each market brings [its] unique strengths.”

In late October, L’Oréal shared that China’s latest pandemic lockdowns had impacted its performance in the mainland, where its L’Oréal Luxe fragrance division plays a key role. COVID-19 restrictions impacted the group’s overall performance, bringing its growth in the nation down to 0.3 percent. However, the beauty conglomerate still seems to anticipate a rebound given its continued investment in China, Korea and Japan. It has launched innovation centers in Shanghai, Tokyo and Seoul which focus on beauty tech advancements.

Shihyo’s launch notably takes place nearly a year after the beauty conglomerate first established a “North Asia Zone” to cover five major markets including mainland China, Hong Kong, Taiwan, Japan and South Korea in 2021. These regions made up 30.5 percent of the group’s overall sales in the same year. 

Meanwhile, China has become the second-largest global beauty market, following the US. By 2025, the Chinese beauty market will be worth over $78 billion. Local consumers are increasingly opting for Asia-made skincare and cosmetics solutions tailor-made for Asian skin over big name western brands such as Maybelline, which is shuttering 14 of its freestanding shops throughout China — giving way to the rise of homegrown C-beauty brands.

According to L’Oréal, the “beauty-intense” regions of China, Japan and Korea make up more than a third of the world’s current skincare and cosmetics consumers. And it’s become clear to the beauty giant that it needs more products that address these markets’ specific desires and cultures.

 

China's Retail Continues to Slowdown in October

What Caused China’s Retail Slump In October? And Is There Hope For the Rest Of 2022?

What Happened: China’s retail sector and overall economy slowed down in October, according to the latest economic data released by China’s National Bureau of Statistics (NBS). 

Normally, September and October are known by China’s retail and hospitality sectors as “Golden September and Silver October” (金九银十) for their long holidays and busy retail activities. However, this year a lukewarm consumer sentiment and pandemic restrictions have neutralized the traditional shopping stimulus brought by the holidays.

Retail sales, which include online retail, reached $560 billion (4.03 trillion RMB), a 0.5 percent decrease compared to the same time last year and a 0.68 percent decrease compared to September. Dining revenue continued its downward momentum in the third quarter, dropping by 8.1 percent compared to last October. 

In the nation’s urban areas, the unemployment rate is at 5.5 percent — nearly the same as in the third quarter, which saw a rate of 5.4 percent. However, in China’s 31 large cities, which range from Beijing and Shanghai to Yinchuan and Hohhot, the rate is at 6 percent.  

NBS also shared economic data from January to October. Industrial output witnessed a 4 percent year-on-year growth. Meanwhile, total retail sales reached $5 trillion (36 trillion RMB), a 0.6 percent year-on-year growth. Online retail revenue was $1.5 trillion (10.9 trillion RMB), a 4.9 percent increase year on year, and online retail of physical items accounted for 26.2 percent of all retail during the period.

According to Reuters, JPMorgan lowered its GDP forecast for China’s fourth-quarter GPD growth to 2.7 percent from a prior 3.4 percent in response to the data release, while Citibank lowered it to 3.7 percent from 4.6 percent. Earlier in October, The International Monetary Fund cut its forecast for China’s growth to 3.2 percent this year, compared to 8.1 percent in 2021.

The Jing Take: The underwhelming performance of China’s retail sector in October shows that the country’s consumer sentiment has yet to recover from the pandemic. The data suggests that even if the stringent lockdowns in Shanghai had ended sooner, other lockdowns across China’s interior including Zhengzhou and Xining also collectively discouraged retail and consumption.

This is also reflected in plummeting consumer confidence levels: The latest available data is 87.2 in September, a 28 percent drop compared to September 2021 and barely an increase from 86.8 at the height of the Shanghai lockdown this May. 

A closer look at Chinese consumers’ spending choices reveals a more cautious consumer base as well. Per NBS data, food and beverage sales from January to October both experienced noticeable growth at 9 percent and 6.6 percent, respectively. Faced with unpredictable lockdowns, consumers tend to stock up on basic necessities and consume more beverages, including soda and alcoholic drinks, during online socialization or for homely spiritual comfort.

There were reasons to believe that November will still see a stronger rebound in retail, but this was dashed as China just announced mass lockdowns in Guangzhou and Shijiazhuang in Hebei  amongst surging cases in those areas and Beijing, causing a slide in Asian market and crude oil prices.

China had just recently unveiled 20 new measures to ease up its COVID-19 pandemic control policies, which will likely make consumers less concerned about stepping outside and visiting shopping malls. The recent Double 11 e-commerce shopping festival did not report total sales results, but reports suggest that the total gross merchandise value (GMV) from all major e-commerce platforms surpassed $139.6 billion (1 trillion RMB) for the first time – a strong indicator of positive momentum this month.

Rising consumer interest in outdoor sports, art toys, wellness, health, and education were also evident throughout the shopping festival. Therefore, focusing on products and services that offer long-term returns to Chinese consumers will be the key to success for international brands amid China’s slower-than-expected recovery.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

FIFA Louis Vuitton soccer luxury

LV Campaign Taps Messi And Ronaldo As Qatar World Cup Kicks Off. Should More Luxury Brands Get In The Game?

The FIFA World Cup has just kicked off. The world’s largest sporting event is more than just a football tournament. It is a global spectacle that showcases the heights of sporting excellence, national fandoms, the architectural splendor of stadia, and the culture of its host country. Taking place in Qatar, the decision to stage the competition here has proved controversial, with the country’s human rights record receiving unfavorable coverage from much of the western media. 

Football (known as soccer to the US) has become a cultural phenomenon which brands are eager to be associated with. Louis Vuitton set social media alight with its latest “Victory is a State of Mind” campaign, featuring Lionel Messi and Cristiano Ronaldo and shot by Annie Leibovitz. Luxury brand collaborations with players, teams, leagues, or grand tournaments are no longer out of the ordinary. Hublot, for example, is the Official Timekeeper for the FIFA World Cup. 

And yet, China is often overlooked as a footballing nation despite its strong obsession with the sport. The hashtag “World Cup” has 36.4 billion views on Weibo as of yesterday, and the “England vs Iran” hastag garnered 180 millions views. The FIFA World Cup is a timely reminder that the fusion of football and luxury holds great opportunity on a global stage.

China’s football fever 

Although China did not qualify for the FIFA World Cup, 65 percent of all Chinese respondents plan to watch the proceedings compared to only 24 percent in the US. Viewing data from the last FIFA World Cup 2018 shows that China matters. More than 655 million individuals in the country tuned in to World Cup coverage, accounting for 18.4 percent of the global total. The bottom line is that brands, luxury or not, can use this engagement to reach new audiences that may be otherwise difficult to reach.

The popularity of both Messi and Ronaldo are huge in the mainland: LV’s campaign already has had a huge impact, with Messi’s Weibo account garnering 24,000 likes on the news and Ronaldo’s 26,000 likes. In Mailman’s Red Card 2022 report, today, Ronaldo is the most popular footballer online in China with nearly 8 million followers on Kuaishou and over 8 million followers on Weibo. The posts with hashtag “Messi and C Ronaldo appear in advertisement together for the first time” gained 13.4 million views, whereas “PS (photoshop) of Messi & C Ronaldo” gained 78.4 million views. Most posts expressed their love and support for both stars and didn’t mind that the photo had photoshopped the two together. In 2010, LV bought together three footballing greats in MaradonaPele, and Zidane for an all-time commercial. 

Basketball may vie with football for most loved sport in the country but according to Nielsen data, 40 percent of Chinese do have an interest in football. And an Ipsos survey found that 17 percent of Chinese respondents consider themselves passionate about the sport, on par with Germany and just behind Italy (19 percent). 

Street credibility

Luxury houses have long used sporting icons in marketing campaigns. Football is, however, unique as it gives a distinctive edge in shaping countercultural trends. See, by way of example, The Art of the Terraces exhibition — just opened at Walker Art Gallery in Liverpool, U.K. — which documents the relationship between football, fashion, and popular culture. Luxury lines are searching for street credibility to attract younger consumers, and football can help to make that vital connection. 

This doesn’t mean that brands need to compromise on exclusivity. Louis Vuitton’s leather goods capsule collection for FIFA World Cup Qatar 2022 taps into a footballing theme. Likewise, Hublot launched The Big Bang e FIFA World Cup Qatar 2022, which, according to its website, is “designed for style-conscious people who lead active lives — and who love football.”

Hublot’s Big Bang e FIFA World Cup Qatar 2022 offers different dial and strap designs to represent each of the 32 participating countries. Photo: Hublot

The halo effect

The decision to award the World Cup to Qatar has been widely criticized in several regions due to the state’s LGBTQ+ criminalization, migrant worker conditions, and women’s rights. Although data from Kantar reports that only 29 percent of World Cup fans in China are concerned about human rights issues in the host nation, sponsors face a dilemma on how to avoid a possible backlash.

This is a delicate balancing act that involves labels creating associations with the prestige value of the tournament rather than the host country. For example, since 2010, Louis Vuitton has provided the travel trunk for the World Cup trophy.

The rules of luxury marketing are being rewritten and the sector is no longer watching from the sidelines. Football is a ubiquitous sport that unites the globe, played on dirt roads and multimillion-dollar stadiums — but the FIFA World Cup is an elite tournament. Moreover, luxury groups are competing to sign the biggest names in the game: David Beckham’s career is a prime example of legendary football status leading to global celebrity status and the luxury ambassadorships and partnerships that come with it. 

Kylian Mbappé, the star striker of French football club Paris Saint-Germain, was appointed an ambassador of Maison Dior in 2021. Photo: Dior

Messi and Ronaldo might be long-time favorites, but the forthcoming FIFA World Cup will reveal new sporting icons with a global appeal. Indeed, Kylian Mbappé, one of the fastest-rising stars in the world of football, is a brand ambassador for Hublot and Maison Dior. Any relationship between luxury brands and football has to be carefully managed, but the China market is a goal that can’t be ignored.

Glyn Atwal is an associate professor at Burgundy School of Business (France). He is co-author of Luxury Brands in China and India (Palgrave Macmillan).

Additional reporting by Zihao Liu

ZERO10 AR Fashion Metaverse

ZERO10 Offers New Gateway To Virtual Fashion Metaverse

What Happened: ZERO10 is on a mission to break down fashion’s often elitist entry barriers. On November 21, the New York-based AR fashion platform launched a first-of-its-kind digital hub that allows brands, designers, and users to wear and publish their virtual clothing designs.

Unlike other competing apps, ZERO10’s platform is unique in that it provides the technology for users to try on, showcase, curate, and soon — design and sell their own Web3 designs. Social media company Snap, for example, has an AR function for users to wear digital garments but not a space to display them, whereas The Fabricant offers a marketplace but not a try-on experience. Even in China, Xiaohongshu’s R-space allows for people to buy, sell, and showcase blockchain-based collectibles on their profiles but does not have the built-in tools to directly create them (though brands can apply to collaborate with Xiaohongshu).

As George Yashin, CEO of ZERO10, described, “We want our platform to become the designated space for collaboration, community and connection where anyone who is passionate about design, technology, content and digital fashion has a chance to bring their ideas into the world via augmented reality.”  

ZERO10’s AR Fashion Platform allows users to try on and publish their virtual clothing. Photo: Courtesy

The Jing Take: This is not the first time ZERO10 has worked to bring virtual fashion to the mainstream. In September, the tech solutions provider unveiled what it called a “physical gateway into the metaverse,” a pop-up with no actual clothes inside. Powered by QR codes and AR capabilities, the SoHo store gave consumers a chance to discover virtual fashion in a relatively familiar brick-and-mortar environment while pushing the boundaries of traditional retail. Prior to this, ZERO10 partnered with emerging names like Estonian rapper Tommy Cash and label Maisie Wilen to host their NFTs, phygital, and virtual-only fashion creations.

Now, ZERO10 is making Web3 more accessible with its latest initiative. In addition to the fashion platform, it also plans to launch an education program for designers to learn how to convert their 3D designs into high-quality AR pieces, along with the free design tools to do so — currently, ZERO10’s in-house team helps transform designs to AR. ZERO10 AR Studio, rolling out at the beginning of next year, will not only nurture and spotlight up-and-coming talent but contribute to the expanding library of premium digital wearables. 

ZERO10 wants to create “a future where fashion can truly be expressive and unique, limitless, and more sustainable,” according to its CEO Yashin. And in order to truly be limitless, providing both the resources and education needed to onboard people to Web3 will be crucial to challenging the fashion industry’s inherent exclusiveness. As consumers spend more time in the metaverse — McKinsey predicts in the next five years, Americans will spend almost four hours a day — the time for brands to try their hand is now. 

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Traversing Chengdu, China’s New Luxury Capital

Chengdu, the provincial capital of China’s southwestern Sichuan province, is perhaps best known globally as the home of cute giant pandas. But it is now also a rising star within the luxury sector. The city has become one of the most important regional markets in the mainland, in addition to top-tier cities like Beijing, Shanghai, and Guangzhou.

In November, the city once again proved its allure to leading luxury conglomerates such as LVMH and Kering. Louis Vuitton officially opened the third Louis Vuitton Maison in Sino-Ocean Taikoo Li mall, along with the first LV restaurant, “The Hall.” Last week, Dior unveiled its renovated flagship store in the same luxury shopping district. Balenciaga and Bottega Veneta presented their revamped storefronts in July and October, respectively.

Bottega Veneta presented a pop-up store at Sino-Ocean Taikoo Li in October. Photo: Courtesy of Bottega Veneta

In addition to large-scale flagship stores, brands are attaching greater importance to the scope of their physical footprints in the city. Boss, under the German luxury group Hugo Boss, has seven standalone shops in Chengdu, making it among the cities with the largest retail presence in the mainland. 

The strategic interest in Chengdu has been quantified by analysts. Wendy Liu, the analyst of luxury goods equity research at Barclays, shared with Jing Daily that “Chengdu ranked No. 4, just after Beijing, Shanghai, and Hangzhou, in our city store presence analysis for luxury companies.” 

This September saw a two-week citywide COVID lockdown in Chengdu, but offline operations resumed as soon as October. If brands’ activations in the city over the past two months are anything to go by, their confidence in the market is still strong. Here, Jing Daily takes a deep dive into the city’s consumer landscape, cultural diversity, and what international players can learn from existing localization strategies.

Strong purchasing power driven by local shoppers and tourists

Chengdu holds a critical role in southwestern China, as one of the most important transport, economic, and financial hubs in the region. In addition to geographically connecting southwestern, northwestern, and central China, Chengdu’s market size and purchasing power are appealing factors for luxury. In 2021, the total retail sales of consumer goods in the city reached $160 billion (1.13 trillion RMB), a figure released by the Sichuan Provincial Bureau of Economic Cooperation. Its total population exceeded 21.2 million as of last year, which ranks it just after Chongqing, Shanghai, and Beijing.

This strong purchasing power, as Liu explains, hinges on the lower cost of living and lower property prices compared with tier-one cities Beijing and Shanghai. Therefore, higher personal disposable incomes allow local consumers to improve their quality of life. Disposable income per capita in Chengdu in 2021 was $6,427.62 (45,755 RMB), an increase of 110 percent compared to 2012, with an average annual growth rate of 8.6 percent.

Tourism is also a major engine driving the city’s consumption. Chengdu is a popular city destination, and Sichuan is home to stunning natural scenery, diverse cultures, and sites such as Ganzi, the largest Tibetan-inhabited area of the province. In the first 10 months of this year, domestic media reported that Chengdu logged a total of 26.18 million travelers, ranking first among all mainland cities. Both locals and tourists are clearly contributing to the city’s flourishing economy. 

Chill lifestyle and vibrant youth culture 

Chengdu is one of the few top-tier Chinese cities that has refused to buy into the hard hustle culture. Often described as cozy and laid-back, local lifestyles contribute to thriving niche communities and subcultures like skateboarding, electronic music, and hip hop. 

“Our relatively low living cost means the cost of trial and error is lower than other top-tier cities,” observes Chu Yi, musician and co-founder of Chengdu’s hippest underground club, Axis. “Youngsters here dare to try different things, and have the patience to adjust and go in-depth into the hobbies and lifestyles that interest them.” 

The diversity and openness of the city have lured luxury brands to launch playful, creative, and localized initiatives to engage the younger generation. Take Louis Vuitton’s grand opening of Chengdu Maison. The French house commissioned Chengdu-born rapper Ma Siwei to produce a song called “What’s Your Style” (“啥子范”) which then became the background music of the branded interactive game called “Mah Jump” (referring to mahjong) on WeChat Mini Program. This was a clever nod to Chengdu’s favorite leisure activities and resonated fantastically with local shoppers.

The interactive game “Mah Jump” on WeChat Mini Program features a song produced by local rapper Ma Siwei. Photo: Courtesy of Louis Vuitton

Different brands, different approaches

Chengdu has been on the radar of global luxury houses radar for over five years. Chanel famously held its Cruise show in the winter of 2017 and Fendi followed suit with a couture outing in 2021. Since 2019, there’s been a boom of development in luxury retail across the city, with a huge number of retail openings (often marking a brand’s foray into southwest China). Three years after the outbreak of the pandemic, luxury’s affinity for the city has only intensified. However, approaches to the market differ across the sector.

In terms of incorporating local cultures into marketing strategies, Dior is a pioneer. In April 2019, the house unveiled a pop-up store at Guangdong Hall in Sino-Ocean Taikoo Li Chengdu, launching its Pre-Fall 19 men’s collection in collaboration with contemporary Japanese artist Hajime Sorayama. The juxtaposition of Sorayama’s futuristic robot sculpture with the quaint historical architecture impressed visitors and inspired more luxury names to be creative. Since then, Sino-Ocean Taikoo Li has become a battleground for brands to showcase bold, imaginative localized initiatives. 

In April 2019, the house unveiled a pop-up store at Guangdong Hall in Sino-Ocean Taikoo Li Chengdu. Photo: Courtesy of Dior

An anonymous spokesperson from the Boss China team told Jing Daily that “Boss has presence in all important business districts in Chengdu, with the purpose of establishing a more intensive and accessible retail network.” This approach allows the label to get closer to its customers across the city and “provide them with more convenient and thoughtful services.”

As Beijing has just announced major changes to its COVID-19 pandemic control framework aiming to “optimize” the Dynamic Zero policy, inbound tourism is expected to further recover. Popular destinations like Chengdu will welcome back visitors to enjoy its relaxed, dynamic urban cultures. The knock-on effect will likely be more luxury groups launching further physical happenings in the promising capital.

luxury brands disappear value creation

50% of Luxury Brands Will Disappear By 2030. What Are The Key Risks?

It’s not beauty or craftsmanship that drives the value of a brand, but how it can transform an individual. For luxury houses, this means one thing: get your story straight.

Recently, I had a meeting with an influential government official on how to enhance the positioning of his country. During the talk he had a fascinating question: if he wanted to elevate the global perception of his country to one with a luxury proposition, what would be the main risks? What I loved about this question is twofold. First, anything can be positioned as luxury once we gain clarity on what makes something luxurious, whether it is a service, a product, or a country. Second, there are significant implications, which need to be managed.

When we audit brands and try to identify gaps, we find often that luxury is simply seen as an enhanced experience, typically expressed through a focus on tangible things: the design of a hotel for example, the materials of an item, or the friendliness of a service. Counterintuitively, these don’t define luxury. They are rather the minimum expected expression. 

In other words, beauty, craftsmanship, and friendliness are priced in; they never drive the value of a brand. Every year I have thousands of participants in my luxury masterclasses and the number one mistake is to confuse tangible aspects like the above with luxury value drivers. It’s so easy to make this mistake because the normal world is driven by facts and figures and tangible aspects, while in luxury other dimensions become critical.

First of all, what is luxury? A straightforward way to define the term is to think of luxury as the ability to create extreme value for an individual. Hence, no brand ever will be luxury to everyone, but it must have the ability to be of extreme value for some. To create value, which is so high that it becomes non-linear, a luxury brand needs to be fully centered around a specific need of the client. Hence, it’s never about the brand but all about the ability to have a specific role in the life of a client. 

Years of extensive university research and numerous brand and category audits have shown that, fundamentally, brands that manage to achieve such a critical role gain a significant shift in how they are perceived. People who understand the signal of an extreme value-creating brand feel a significant perception shift in several key dimensions related to themselves.

Recommended ReadingWhy Messaging Is Luxury’s SuperpowerBy Daniel Langer
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In my research findings I could show that what is perceived as a luxury brand, once it’s connected to a person, enhances the attractiveness of a person significantly. It measurably increases self-perception, perceived expertise, the notion of possibility in life, and protection in social settings, to name a few. It’s much less about status and much more about the feeling of obtaining a superpower that opens doors, makes life more beautiful, and promises significant opportunity. 

Looking at these results, it becomes clear that it’s not about a specific expression (i.e., the golden faucet or the thick carpet) but how special someone feels. It’s about the client, not about the brand. The brand is simply an enabler of the anticipated perception shift. And it’s almost entirely driven by the story of the brand. No story, no value. It’s that simple. 

To create extreme value, a brand must be able to convince a person in a split second of what is in it for him or her. A luxury brand, in essence, needs to be a storyteller through the eyes of a client. And here is where the risks start. Most brands are providing stories that feel like a sea of sameness. If you think about countries which are tourist destinations, many of them position themselves as “paradise.” But how exactly the promise of “Paradise A” differs from the promise of “Paradise B” or “Paradise C” is typically kept vague. 

Car brands typically talk about “excellence in materials and design” or they highlight what they call “innovations,” such as large screens. The problem is, when all competitors say the same thing, it’s neither an innovation nor a differentiating story. If all paradises seem the same from a distance, which one should you choose, and why? 

For a recent project I analyzed the perception of “Made in Italy” in the US and the results were mind-blowing. Practically no one linked it to elegance, refinement, or quality, but rather to pizza, pasta, and the movies. Nothing about fast and exceptional cars, made-to-measure tailoring, or any other quality marker. The term became an empty promise without any differentiation or substance. It became so generic that it did not evoke any emotion. Likewise, German luxury car brands are losing relevance rapidly in China because “Made in Germany” does not translate into a differentiating and relevant storytelling in a Gen Z-influenced world that lives in the now and wants to know what’s in it for them. 

The sea of sameness is not an exception — it’s the rule. And therefore, up to 50 percent of today’s luxury brands will not survive the transition towards a Gen Z-dominated world, which will be completed by 2030. Because they don’t have a convincing, precise, and emotional story that is told through the eyes of the clients. 

And where there is no story, there is no extreme value, as the story can carry 99 percent or more of the total perceived value in luxury. So the most fundamental risk in luxury is to be without a differentiating story which answers three questions. What do you really sell? Which emotion do you evoke? What can your customers do differently through your brand? If a client does not understand how and why a brand differs on these dimensions, I can predict with near certainty a massive value erosion. 

The second risk is that a story is only as good as its execution. And this is where most brands massively fail. They not only lack clarity in terms of the story, but they are also extremely inconsistent in bringing the story to life in people-to-people interactions and on social media and other digital channels. When we recently optimized the social media messaging for a leading French luxury house, there was zero consistency in messaging, which explained why the brand was growing much more slowly than its main peers and losing relevance. 

This means that to deliver extreme value for a client, the individual needs to always feel extreme value in a consistent way and within a clearly differentiated storyline — with no exception. Only then does the feeling of luxury emerge. 

I recently had a fascinating experience. I took my students to one of the most significant auctions in New York. The experience was second to none except for how the students were treated when they checked in their coats. The lady responsible for that part of the experience may have had a bad day and as a result the students felt insulted and the entire experience was ruined at one touchpoint, which was not even related to the core experience. 

The venue was spectacular, the tour was incredibly curated, everything was mind-blowing and exceptional, but because of that touchpoint, nothing else mattered. Next time you think that luxury is in an elegant design, great materials, or something else that is outstanding, always remember that the biggest risks are: not having a story that is told through the eyes of your clients; not having a story that differs from all the others; and not creating an exceptional experience — at all touchpoints — that brings the story to life. 

And it does not matter whether you are the head of state of a country worrying about its image, or the CEO of a leading luxury brand, or someone working on a luxury startup. Do you have a true story and clarity about which emotions you evoke in your clients, and does the customer journey transport the story?

If you can look in the mirror and say yes with certainty, congratulations! But if there could be even the slightest inconsistency in the above, then you must act. Because luxury is all about delivering on a promise of an emotion; it’s about the client and not the brand. Otherwise, you will be one of the 50 percent of brands that disappear. Time for reflection. Time for action.

This is an op-ed article that reflects the views of the author and does not necessarily represent the views of Jing Daily.

Named one of the “Global Top Five Luxury Key Opinion Leaders to Watch,” Daniel Langer is the CEO of the luxury, lifestyle and consumer brand strategy firm Équitéand the executive professor of luxury strategy and pricing at Pepperdine University in Malibu, California. He consults many of the leading luxury brands in the world, is the author of several best-selling luxury management books, a global keynote speaker, and holds luxury masterclasses on the future of luxury, disruption, and the luxury metaverse in Europe, the USA, and Asia. Follow @drlanger

china luxury hotel staycation

With International Travel Flat, How Are China’s Luxury Hotels Enticing Locals?

Hospitality has been one of China’s most depressed sectors since COVID-19 hit. According to a 2021 report on the development of China’s hotel industry, 2020 saw the closure of 59,000 hotels in the mainland. The country’s dynamic zero-COVID policy has made even domestic travel onerous, with different provinces and cities setting their own rules that often include a litany of tests and quarantine requirements.

Fashion and travel influencer Will Wang has witnessed the impact firsthand. “The hotel industry fell into a ‘self-help craze’ when the pandemic started to get worse in 2020,” he tells Jing Daily. “Even some of the premium hotels began to offer super affordable presale vouchers and sell these vouchers via livestreaming. Then there was a turning point as domestic travel recovered in 2021.” 

This rebound was obvious in popular destinations like Hainan’s Sanya, “where hotel revenues even surpassed those before the pandemic,” he adds. In 2021 and early 2022, luxury brands scrambled to launch permanent stores at duty-free shopping malls and unveil pop-up shops in Hainan. Dior’s pop-up “Dior Vibe” at Sanya’s The Edition hotel was the most prominent, driving significant traffic on the ground.     

However, as unexpected lockdowns can now happen anywhere in China, brands, hotels, and tourists have become more cautious. Three years on from the start of the pandemic, Chinese tourists’ “travel freedom” seems to be an illusion. How can hotel brands operating there navigate this new normal?

Themed staycations

During the seven-day Golden Week holiday, short-haul vacations accounted for 65 percent of orders on online travel platforms while travel spending per person by local tourists (or those from surrounding areas) increased by nearly 30 percent year-on-year, according to online travel agency Trip.com. Meanwhile, an increasing number of tourists are seeing hotels as “destinations” rather than mere accommodation. They expect a one-stop vacation spot that can entertain them without having to leave the hotel. As the popularity of staycations surges in China, such playful experiences have become significant to clients. 

As a Trip.com report shows, as of September 2022, stays that came with activities like esports and camping recorded a year-on-year increase of 50 percent and 10 percent, respectively. Early adopters like Shangri-La Group announced their esports-themed hotel rooms in partnership with Tencent Games and Tencent Esports in June 2021. The first hotels to feature these include the Kerry Hotel in Beijing and Shanghai Pudong District, as well as the Shangri-La hotel in Xi’an, Chengdu, and Haikou. In addition to integrating game-related designs and decorations into the room, the hotels rolled out a series of online and offline events and offered incentives such as complimentary virtual gifts in games.

In 2021, Shangri-La Group launched a series of unique themed rooms at five pilot locations in China in partnership with Tencent Games. Photo: Shangri-La Group

In 2020, Waldorf Astoria Beijing and Aston Martin teamed up to launch the “Urban Glamping Plan” — offering guests unique camping experiences in the city. The campaign was upgraded in 2021 with the unveiling of South Africa-themed glamping suites, which feature furnishings that are both homely and striking. Clienteles could also enjoy a deluxe in-room South African dinner.

In-depth local culture tours

When the scope of travel is limited, the potential of each trip is worth exploring to its fullest, and many residents prefer hotels that allow them to immerse themselves in the local culture. Sun Nan from Shanghai is a fan of luxury weekend staycations: “For trips to surrounding areas, I prefer to get closer to nature and experience local customs. So hotels that allow me to explore domestic culture are appealing to me.”

Capella Shanghai recruits Shanghai culture and history experts to offer guests a variety of tailored experiences such as city cycling tours. Photo: Capella Shanghai

Given this growing demand, leading hotels have leveraged their geographical advantages to introduce in-depth cultural tours. Capella Shanghai, for example, recruits Shanghai culture and history experts to offer guests a variety of tailored experiences such as city cycling tours and tastings in boutique restaurants. Similarly, the JW Marriott Hotel in Shanghai at Tomorrow Square, located near a number of cultural and historic sites, has collaborated with the Shanghai Museum Institute to launch its “Family by JW” campaign, featuring on-site historical lessons.

Multidimensional collaborations

Though various brand collaborations have offered glimmers of hope for hotels in China, guests with plenty of free time and spending power still make up a small but coveted group. Rosewood Beijing appeals to local guests with its diverse dining options and state-of-the-art health and fitness facilities. The hotel’s executive lounge Manor Club teamed up with “The Players Club,” a 27-hole championship golf course and private club in Beijing, to launch a VIP card which allows holders to enjoy membership of both. On top of multiple exclusive offers from Rosewood Beijing, such as one year’s access to the Manor Club, one night’s stay in a deluxe room, access to Sense spa, and discounts at the hotel restaurants, cardholders can enjoy a one-year social membership to The Players Club. 

Rosewood Beijing’s executive lounge Manor Club teamed up with The Players Club. Photo: Courtesy of Rosewood Beijing

The pandemic has given new impetus to the hospitality industry’s transformation and innovation in spite of the chaos of sudden lockdowns. During the Golden Week holiday in October, thanks to Beijing’s call for people to “stay in the city for the holiday,” vacationers flocked to its suburbs and caused the prices of local establishments to skyrocket. “Hotels capitalized on local short trips as a temporary measure to help the current challenges,” Wang explains. 

Whether it’s diversifying the staying experience or maximizing added value, China’s luxury hotels have certainly been getting creative. That said, some of these efforts do tend toward similitude. There is still huge room for improvement in terms of luxury hospitality groups catering to their sophisticated domestic customers who expect an authentic, playful, and distinctive experience.

Loewe Chinese ceramics Spring 2023

Loewe Sets The Bar For Chinese Cultural Marketing

Overview

Loewe launched its Spring 2023 campaign inspired by Chinese monochrome ceramics earlier this month. The label’s new bag collection features colors such as Pale Aubergine glaze, Tea Dust glaze, and Pale Celadon glaze as an ode to the power and beauty of a single hue. To pay tribute to the artisans of Chinese porcelains, the house produced a documentary starring contemporary ceramic artists Deng Xiping and Natasha Daintry as well as Wang Guang Yao, a professor and research fellow at the Palace Museum in Beijing.

From November 10 to 13, Loewe hosted a monochrome ceramics-themed exhibition at the ART021 Shanghai Contemporary Art Fair, presenting Deng’s ceramic artworks to local visitors. The brand will also sponsor the creation of a new monochrome ceramics educational program at the Jingdezhen Ceramic University that seeks to preserve this ancient craft and its cultural heritage.

Loewe unveiled a monochrome ceramics-themed exhibition at the ART021 Shanghai Contemporary Art Fair. Photo: Courtesy of Loewe

Netizens’ Reaction

Viewership and engagement for this campaign hit a record high on Loewe’s Chinese social media platforms. On Xiaohongshu, the campaign film collected almost 6,000 likes, which is 100 times more likes than the brand’s usual posts on the platform. Xiaohongshu users commented that Loewe deserves respect as it “acknowledged what the inspiration comes from” and “genuinely engaged local artisans and techniques.” 

Verdict

Chinese traditional cultures have been critical inspirations for luxury brands, especially when it comes to localization strategies. However, there is a fine line between resonating with and annoying Chinese consumers. As Jing Daily’s report Chinese Cultural Consumers: The Future of Luxury pointed out, today’s luxury shoppers approach consumption with a distinct cultural awareness and a concept of luxury that sets them apart from their Western counterparts, as well as the older generations.

In Loewe’s case, the campaign not only targets Chinese customers but also global ones, as the brand states on its global sites. Thus, the initiative is not just to please certain demographics with Chinese knowledge but also to introduce the culture to a broader audience. As creative director Jonathan Anderson shared in a statement, he came across monochrome ceramics during a trip to China. “The first time I saw monochrome ceramics, I was overwhelmed by its infinite charm. China’s monochrome glaze has had a profound impact on ceramic art around the world from ancient times to the present, and has laid the foundation for many potters today.”

Surreptitious and superficial appropriation of Chinese culture can cause scandals in the market. Brands that take inspiration from local traditions need to do their research, show sincerity, and be transparent in crediting the culture. Otherwise, negative consumer sentiment can dilute the brand reputation that global companies have worked so hard to build.

Istituto Marangoni graduates show Shanghai

Istituto Marangoni Shanghai Graduates Dare To Imagine The Future Of Fashion

This November, leading fashion college Istituto Marangoni partnered up with the Italian Cultural Institute in Shanghai to hold its annual graduates’ show. Held at the multimedia space Temple of Light on the Bund, it took viewers on an immersive voyage into the future, one millennium from now — 3022. Under the moniker Zeta, which stands for the letter Z’s pronunciation in Italian, the show intended to represent the new design force of China’s Generation Z. 

The runway kicked off with the 3D CGI film “Zeta 3022,” produced under the mentorship of alumni Zhou Jun and Li Yushan, founders of the pioneering Chinese independent label Pronounce. This trailblazing Web3 initiative saw students Zhou Jie, Liu Yubing, Lan Yutong, and Qi Linghui create four capsule collections captured on digital avatars. In this, the project simulated the potential environmental impact of human existence, as well as technological advances in our future world. 

The runway kicked off with the 3D CGI film “Zeta 3022,” produced under the mentorship of alumni Zhou Jun and Li Yushan, founders of Pronounce. Image: Courtesy of Istituto Marangoni

Guests were then brought back to 2022 to enjoy a real-life runway show. In total 12 avant-garde collections were presented by Istituto Marangoni’s graduates. Each piece fell under one of the four central themes — The Origin, Dystopia, Dune, and Rebirth — with the collections given curious names such as “1m2 of Air,” “Metamorphose,” or “2Na + 2H2O,” reflecting Gen Z’s exploration of new fields and their forward spirit. To reach a wider audience the show was broadcasted live on local and global social platforms, such as WeChat, Xiaohongshu, Weibo, Douyin, and Instagram.

Cheng Yingting, the chief operating officer of Istituto Marangoni China, told Jing Daily that Zeta was devised to showcase the mindset of this young generation, who speak their own languages to communicate with their community. “As an educator, we would like to give them a stage,” she stated. “We are proud to say that not only the fashion design part and the show concept but also the creative direction and the marketing campaign were conceived, produced, and realized by our graduates. And we, as a school, supported them during this important journey.” 

That night, Sun Haoyue received the award for the most outstanding fashion collection. His collection “Metamorphose” experimented with contrasting shapes — sharp and soft, as well as heavy and light — to express themes of the human experience, and of deformation caused by physical injury. Sun explained how “during the lockdown period, due to lack of materials, some ideas were hard to realize. However, this inspired me to reflect on the relation between human beings and their habitats. This is how my idea was born. The biggest challenge was realizing design experimentations with limited resources.”

Sun Haoyue’s collection “Metamorphose” experimented with contrasting shapes to express themes of the human experience. Image: Courtesy of Istituto Marangoni

Despite ongoing COVID-19 lockdowns, the 12 students managed to deliver impressive looks, which conveyed their out-of-this-world ideas with original designs and tailoring. This indicates the tremendous potential of young talents to inject fresh perspectives into the industry. “How far can we go with innovative teaching methods during a pandemic?” was the question posed by Cheng. 

In recent years China has become a hotbed of creativity, seeing talents like Pronounce, Susan Fang, and Uma Wang rising on the global stage. Young generations are reshaping global understanding (often stereotyping and outdated) of the domestic fashion industry: they are driving the transition from Made in China to Designed in China. International institutions are recognizing the trend and rushing to build campuses and networks in the Chinese fashion center: Shanghai. Paris International Institute of Fashion & Art is located within the Shanghai University of Engineering Science. And others such as NABA, Central Saint Martins, and Parsons are strongly leveraging their alumni community to attract talents for their international schools or online courses. 

China’s robust supply chain, mature e-commerce, and strength in social selling will only accelerate the growth of the sector. Fashion schools will play a pivotal role in fostering the next creatives. Istituto Marangoni’s local presence, global influence, and long-term commitment to providing students with a platform to demonstrate their creativity have created a critical competitive advantage in the saturated education market. 

While 3022 remains unforeseeable (beyond creative imaginings), Cheng is confident about the near future. “Students have been empowered with the digital tools necessary to fulfill their creative potential. Studying at Istituto Marangoni means evolving. Now, they are officially fashion professionals. In the future, they will become the anchor of the industry.” 

Xiaohongshu Balenciaga Gen Z China

Viral Products For The Win: New Data From Xiaohongshu

What Happened: According to a Luxury Consumer Insight Report released on November 14 by lifestyle platform Xiaohongshu, Chinese Gen Z luxury spending is being heavily steered by the company. Over 2,500 users in the mainland were surveyed, with 76 percent situated in tier-two cities or above, and 74 percent holding a bachelor degree or more. Of the Gen Zers who were questioned, just over 75 percent of them were introduced to at least one luxury product on Xiaohongshu over the past year that they ended up buying.

Furthermore, the report states that 62 percent of surveyed users are introduced to luxury before the age of 22, proving how social media is fueling a younger luxury spender.

The Jing Take: In 2022, the power of social media is no shocking revelation, yet what’s most noteworthy is the extent at which China’s young people are utilizing Xiaohongshu as a pre-purchase tool. Not only are posts directly spurring spending, the report also states that approximately 70 percent of users feel inspired to learn more about new luxury brands or products after encountering them one to three times on the platform.

As the place where many youths are being introduced to brands, Xiaohongshu should be viewed as an arena of opportunity for both established and emerging names. Whether that’s a case of incorporating the fruitful nature of recommendation purchasing, key-opinion-leaders (KOLs), or ensuring your brand or product appears when users type into the search bar before shopping. 

The statistics suggest that luxury names need to zero in on where the youngest spenders in China are being introduced to products. Those born between 1997 and 2010, also known as Gen Z, are predicted to make up 60 percent of global luxury spending. In China, that demographic already encompasses an estimated 15 percent of all luxury purchases (data sourced from Jing Daily’s The Secrets to Selling Hard Luxury To China’s Gen Z).

In short, those looking to meet increasing sales targets cannot ignore the latest data from the “Chinese Instagram.” Social media is a proven results-generator, and the figures illustrate that. In China, Gen Z are digital natives being heavily influenced by what they are exposed to on their feeds, so brands need to be intelligent in constructing their public perception and social media activity.

For luxury, the main takeaways from Xiaohongshu’s report are how young Chinese luxury consumers really are, their solid trust in recommendations, and how important it is to have products visually presented on social media.

On a wider scale, the data provided by Xiahongshu also helps prove that viral “novelty” designs clearly are more than just clickbait marketing exposure. After all, Chinese young people are actually buying products that they see on their feed — for context, this week, Balenciaga’s novelty Lays bag sold out in China at the pre-order stage, before even going on sale, according to a staff member at Balenciaga’s Plaza 66 store in Shanghai. On Weibo, the viral hashtag of “Balenciaga’s New handbags are identical to Lay’s chips and cost over 10,000 RMB each” gained 1.3 million views. Shoppers aren’t just marveling at these viral products, they’re buying them.

On Xiaohongshu, users share images of Balenciaga’s Lay’s bag while others attempt to recreate the design at home. Photo: Xiaohonghsu

If a Gen Zer’s social media feed is where most of their purchases start, then that’s where companies need to pivot their attention. Whether it’s via KOLs or competitions, online marketing budgets have never been more crucial in China. Perhaps, we’re about to enter an era of even more amplified meme fashion, as a result. We’ll grab the popcorn.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

 

Ning Dynasty Kai-Isaiah Jamal Core

Ning Dynasty Talks Working With Kai-Isaiah Jamal And The Core Collection

As a millennial growing up in Guangzhou, fashion designer Ning Yuan was born in the era that gave birth to China’s insatiable love for streetwear. Launched in 2021, her brand Ning Dynasty is the epitome of that exposure but with a unique twist: ’90s American hip hop culture combined with the newfound pride that she and her generation have in Chinese heritage.

The London-based label’s non-gendered collections have established a unique selling point in championing China’s historical artisanship first and foremost. In a tribute to the 5,000-year-old craft, garments are cut from 100 percent Mulberry silk under a long-term partnership with Beijing-based Huang Jin the world’s only silk producer to bear the prestigious Forbidden Palace seal.

This luxurious artistry is brought to streetwear designs, marrying the seemingly adverse aesthetics. But it works, as shown in the latest “Core Collection,” which features a campaign with esteemed poet, model, and activist Kai-Isaiah Jamal alongside models Akima Maldonado, Emmanuel Alli, Felix Allen, and SeungHoo Kim. 

To commemorate the collaboration with Jamal and the brand’s first anniversary, Jing Collabs and Drops spoke to founder Yuan. 

How would you describe the first year of Ning Dynasty?

The first year was a year of finding our space within the streetwear market. We wanted to be loud and out there, showcasing how intricate we can digitally print onto our silk while celebrating Chinese culture at the same time. We also wanted to portray summery imagery to induce the festive flair of our brand. The reception has been well-received. However, we found that because we were trying to achieve a lot all at once, some of our silk messaging was lost. Over the last year we have really had to go back to basics and re-discover our brand’s true DNA, which, at its core, always came back to the Mulberry silk and our long-term partnership with Huang Jin.

Do you think there is pressure in the streetwear space to produce limited edition drops?

There definitely is pressure to produce newness and constantly stimulate the customer on all fronts, whether that is through collaborations, designs, or “viral moments.” The hype element has died down in our opinion versus a few years ago, and now even within streetwear there is more scope to tell a story. For Ning, we produce in small batches and for us it is about preserving a dying craft amongst the silk artisans — this already makes our collections limited editions while remaining timeless. Together with our story, I think we have something no one else is doing in the current silk scene — as far as heritage and the history of silk goes.

Why did you select Kai-Isaiah Jamal to be part of Ning Dynasty’s Core Collection?

Kai speaks to their audience through multiple channels. They are not only the model of the moment but, through performance poetry and as a trans-visibility campaigner, Kai has something to say in our industry that is extremely positive and empowering. We want to support and be a part of this messaging in our industry, and the shoot was our visual representation of that.

Model and activist Kai-Isaiah Jamal stars in Ning Dynasty’s latest collection. Photo: Courtesy of Ning Dynasty

Is collaboration a big part of your brand strategy?

Yes, it is a part of our strategy. We have extraordinary silk shirts, and we want extraordinary people wearing them from any background, race, age, or gender. The Core Collection consists of 10 plain yet exquisite shirts, and we wanted to highlight each talent’s own unique personality. We didn’t want to push products to fit into a person’s look. We would rather have the shirts enhance their individuality. 

Another big focus for us is to educate the customer on the quality of our fine Mulberry silk. This can be seen in the movement of the shots; the shine and the way that it drapes on each talent.

Finally, who would be the Ning Dynasty dream collaborator?

It would be our absolute dream to have the opportunity to work with a variety of global artists, talents within music, the arts, and cinema, and tastemakers within fashion.

Nick Knight We3 digital design

A Fashion Renaissance Has Begun, And Nick Knight Wants Us All To Be A Part Of It

In our new Founders column, Jing Daily profiles pioneering names in the world of fashion, luxury, beauty, retail, and tech. We deep dive into the minds and motivations of individuals who have founded businesses and brands which helped shape their industries. These trailblazers offer a unique point of view on the evolution of the current landscape and where it’s heading in the future.  

“Fashion is not in a great place. What I mean is, real world fashion, it’s got a problem,” acclaimed photographer and image-maker Nick Knight remarks straight off the bat. He’s sipping coffee from a delicately illustrated China teacup — something that casts a stark difference to the stricken white walls of his famed SHOWstudio space. 

We’re sitting in the atrium of the building, which, Knight explains, was once a place for art investors to store their out-of-season pieces back in the 1800s. “There are a lot of rich people around here,” he laughs. It’s also home to Knight himself, now one of fashion’s most exalted image-makers and champion of out-of-the-box creativity. 

With the pleasantries out of the way on an otherwise uneventful Monday afternoon, Knight wastes no time getting to the reason why we’re here. That is, in short, to learn about the birth of SHOWstudio, the people powering contemporary culture — such as @uglyworldwide, the Instagram star who Knight is launching a cross-dimensional NFT collaboration with next month —  and the death of the fashion industry as we once knew it. 

The makings of a multimedia empire

Before founding the multi-award-winning fashion film website SHOWstudio in 2000, Nick Knight had already established a name for himself across London, where he often looked toward subcultures for sources of inspiration. He published his award-winning first book, Skinheads, back in 1985. Then, following a stint as the commissioning picture editor for i-D in the 90s, Knight set to work on bringing to life his own multimedia workshop.

But he had his challenges. “People just were not getting it at all,” he recalls. “We were entering this new space that hadn’t really had its parameters defined yet. We didn’t know how far it was going to go, or whether it would even resonate at all.” Still, the risk paid off and 22 years on, his platform remains one of the most influential and innovative new mediums in fashion media today. 

Throughout his career, Knight has worked with an eclectic list of models, spanning from ’90s It girl “Supers” Kate Moss and Naomi Campbell, to the more eccentric aesthetics of Bjork and Lady Gaga. But one thing that he noticed behind the lens was the irrefutable lack of autonomy that many, often lesser-known names, experience. He argues that “often, the concept of a model in fashion is praised as a blank canvas, which I don’t think is very nice. I don’t think people should be referred to as blank canvases.” It’s a topic that’s preoccupied him for a long time. In 2014, his project Subjective explored the often overlooked role models play by putting them in the spotlight and giving each individual a voice. 

Nick Knight, supermodel Kate Moss and artist Sarah Morris collaborated on a voyeuristic fashion film exploring celebrity, privacy and surveillance. Photo: SHOWstudio

As he observes, “You can put any piece of clothing on [models] and they become this fantasy that a photographer, stylist, makeup artist, or designer is trying to create, which is fine to a degree. But nearly all the models confessed that they had no control, no opinion. They were mute. And, to me, that’s not fashionable.” Recognizing the disparity in power, Knight has since committed to ensuring that his workplace represents an inclusive, more holistic dynamic. “I wanted to redress this relationship between the model and the image.” 

Looking ahead at the new world of Web3 

So back to the studio — an archival celebration of fashion at its finest. Here, one might assume that Knight draws from the past for his sources of inspiration, but in fact the opposite is true. He’s already deep into the philosophy of digitized fashion and considering the possibilities of the newfound world of Web3.  

Wearing a sharply tailored trademark Savile Row suit a uniform so perennial that it has become etched into Knight’s identity itself he grabs the lapel of his jacket, asking: “How are we going to get our clothes tailored in the metaverse?” But underneath the jest, it’s clear that there’s a hint of sincerity in his words. This new world is something that the creator has been considering for some time. The enforced lockdown of the pandemic only accelerated his ambitions. 

He remembers how, during this time, he had thought at first, “OK, so I’m going to have an enforced holiday.” But nothing could have been further from the truth. “I had been speaking to a lot of people about things like the metaverse and this idea of working remotely and avatars and CGI.

Then the pandemic forced us to kind of look at our digital environment a little bit more closely. I think things accelerated by probably around 10 years, because people were really looking at what they could do next within these limitations,” he continues. Even with restrictions lifted, while others went back to celebrating a return to so-called normality, Knight honed his focus on the possibilities — and benefits — of the online terrain. 

“Physical fashion is the third most polluting industry in the world. And we can’t continue to ignore it. One of the solutions is to start looking more at digital fashion in the virtual space. This is something I’m trying to address,” he adds. 

“Physical fashion is the third most polluting industry in the world. And we can’t continue to ignore it. One of the solutions is to start looking more at digital fashion in the virtual space.”

On cracking Asia’s landscape, and how it’s a force for fashion’s future 

Whether it’s in the physical or digital world, it’s obvious that the founder is now a legend. And after launching SHOWstudio, it wasn’t long before his work was recognized in every major fashion hub across the globe, including Asia. Over the years, the continent has become infatuated with his creative eye. There’s been exhibitions like Nick Knight: Image Showcase in Seoul in 2016, Still in Tokyo’s The Mass in 2018, and Beyond Fashion at ArtisTree in Hong Kong in the same year. 

Nick Knight: Image displayed over 100 works and installations, highlighting Knight’s constant reinvention of the process of image making. Photo: SHOWstudio

When asked about Asia, he replies with enthusiasm that “it’s such a huge force. I think the most interesting fashion films are coming from Asia at the moment. With any sort of culture that’s forming like Asia’s right now, you get this push of creative energy and I think that’s what we’re seeing coming through.”

Knight’s first exhibition in Korea (at the artistic landmark Daelim Museum in Seoul), featured a curated amalgamation of photos, videos, and installations from across his timeline of work, demonstrating his avant-garde approach to overturning conventional ideals of beauty. “I wanted to do it in Asia and not in Europe or America because I feel the mindset is more similar to mine. It felt more progressive, more future-facing. Europe tends to look back to the past, whereas Asia looks ahead,” he states. 

“Europe tends to look back to the past, whereas Asia looks ahead.”

Whether geographically or generationally, there simply is no rule book when it comes to the British director. In fact, his entire vocation has been laser-focused on rejecting the formula that has dominated image making throughout the decades. He doesn’t want to be perceived as a “photographer” or fall into the trap of repetition that often accompanies the title. “I don’t want to be repeating those moments from fashion photography,” he affirms.

So I ask Knight what he considers now to be fashionable in the industry. “Fashion has almost become unfashionable. Even the idea of a catwalk show is no longer fashionable like it once was. This younger audience is picking up on that sentiment, and they want something different. Just like Jazzelle.” 

Championing individuality 

As if on cue, Knight pulls out his phone to show me clips from his most recent project called ikon-1, the aforementioned collaboration with Jazzelle Zanaughtti, more commonly recognized as their social handle @uglyworldwide. A non-binary spearheader, Jazzelle is best known for a craft that subverts traditional beauty standards, instead celebrating the weird and wonderful. “I discovered them on Instagram,” Knight explains when asked how the partnership came to fruition. “They are very prolific with their own image, and they have this ability to put up a lot of different versions of themselves.” 

Left: ikon-1 wears Alejandro Delgado dress styled with Eugene Souleiman hair. Right: ikon-1 wears Jazzelle T-shirt and Maison Taskin pants, with Masha Batsii handbag and Eugene Souleiman hair. Photo: SHOWstudio

Since the rise of social media and new channels of expression, the focus has been on how fashion can bring together kingpins of the industry with this new wave of changemakers: most of whom are using their platforms to champion authenticity. 

“You hear a lot of really negative things about social media, some of which are true and valid, but you don’t hear the positive stuff. Social media is allowing those who didn’t necessarily fit the beauty standard to create their own following, their own fanbase and, ultimately, set the standard and fundamentally change the power dynamic of the industry.” In Jazzelle’s case, they’re a juggernaut bringing new life back into an often stale landscape — and Knight wants the world to know about it. 

The dawn of a new era

Despite having an undisputed force and cornerstone of fashion for decades, what’s striking about Knight is his openness to being vulnerable. He wants to make it unmistakably clear that the pressure never goes away. “I guess I feel some sort of artistic debt to it. To ensure that I create something with just as much as what I put into my photographs. I put a lot of craft into them, a lot of care and love, and we spend a lot of time creating my images. So I didn’t want to do something that I just felt sort of throwaway,” he discloses when talking about his most recent project. 

His latest virtual venture only marks the beginning of what he sees as a long-term endeavor in fashion’s newfound spaces — the metaverse is only the beginning. Knight has eschewed all the tropes of what it means to be a fashion creative over the course of his career, instead channeling his passion into transgressing the parameters of the possible. Whether that be shooting on iPhones or using robotic arms in London to direct sessions in Shanghai, the artist has continuously proved why he’s still one of the most impactful and important visionaries in fashion today. So what makes an icon, an icon? 

“It’s someone who can capture the zeitgeist,” Knight says. “It’s that person who’s able to recognize what it is the world has been wanting to see, the crystallization of common desire. It’s about fusing not only this world with the next, but all of them. It’s about independence. It’s someone who can understand the values that people are talking about now. That’s what makes an icon.”

 

Xi-Biden Bali G20 Meeting

Does The Xi-Biden Meeting Herald A More Stable China-U.S. Relationship?

What Happened: On November 14, Chinese President Xi Jinping met with U.S. President Joe Biden in Bali, Indonesia, at the sideline of the G20 Summit. This was their first face-to-face meeting since Biden became president.

The meeting sought to dial down the tension between the two countries. President Xi stated that the U.S.-China relationship “should not be a ‘you-lose-I-win,’ zero-sum game” and that “China does not seek to disrupt the existing international order…or to challenge and replace the U.S.” It is in the fundamental interests of the two countries, said Xi, to avoid conflict and confrontation and to peacefully co-exist. Xi also voiced Beijing’s opposition to any efforts to “politicize and weaponize” the commercial and technological exchanges between China and the U.S.

Biden underscored the importance of maintaining “open lines of communication.” While the U.S. would “compete vigorously” with China, the competition must be managed responsibly and “should not veer into conflict.” In addition, the two “must work together to address transnational challenges,” such as climate change, global macroeconomic stability, and health and food security.

Notably, the two leaders also agreed to oppose “the use or threat of use of nuclear weapons in Ukraine” by Russia.     

The Jing Take: The meeting came right after both leaders secured stronger domestic positions. President Xi has just started his third term after the 20th National Congress, while President Biden’s Democratic Party performed better than expected in the U.S. midterm elections. As such, their conversation sets the tone for the relationship between the world’s two largest economies in the near future.

Tensions between China and the U.S. reached the highest point in decades following U.S. Speaker of the House Nancy Pelosi’s visit to Taiwan this August. This meeting, then, was also a much-needed assurance that the bilateral relationship would not significantly deteriorate anytime soon and that the most dangerous moment had passed.

For the business community, the expressed interests of the two leaders in stabilizing the global economy and avoiding nuclear escalation in Ukraine should provide signs of relief. It suggested that both countries still value the importance of trade and economic development. President Xi stressed that the “deep economic integration” between the two countries was mutually beneficial. This further suggests that China remains committed to welcoming foreign investment.       

Recommended ReadingDecoding China’s CIIE And What It Means For Foreign BrandsBy Jing Zhang and Zihao Liu
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Of course, this meeting alone is unlikely to substantially improve China-U.S. relations. Thorny differences between the two will continue to exist on many issues, such as geopolitics, the tech embargo, and human rights. However, the meeting also points out that there will be cooperation in limited areas. For U.S. brands operating in the mainland, highlighting their roles in these areas — especially sustainable development and tackling climate change — is an effective way of navigating the tumultuous bilateral relationship.  

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Why The Chinese Cultural Consumer Could Power A Luxury Resale Boom

The following is an excerpt from the newly published second edition of Jing Daily’s report Winning China’s High-Spending Cultural Consumer: The Future Of Luxury, packed with all-new data, case studies, and exclusive interviews. Get your copy today on our Reports page.

China’s luxury resale segment is dwarfed by the overall luxury market, with the resale market seeing $2.69 billion in sales, compared to $53.7 billion worth of new luxury products, in 2020. However, the market is growing quickly, driven by interest among younger Chinese Cultural Consumers (CCCs). Traditionally, affluent Chinese consumers have resisted pre-owned luxury goods, in marked comparison to nearby markets like Japan and South Korea, which each boast sophisticated resale infrastructures.

But any aversion to secondhand goods is fading fast, accelerated by the COVID-19 pandemic and driven by booming interest among CCCs in reducing their carbon footprint, engaging in more mindful consumption, and collecting hard-to-find archive pieces by top designers and brands.

Much like their counterparts in Western Europe, North America, South Korea, and Japan, CCCs are shifting away from standard models of luxury consumption and purchasing more secondhand items, fueling investment in a growing number of luxury resale platforms.

Secondhand online marketplaces such as the Alibaba-owned Idle Fish — which started as a consumer-to-consumer (C2C) platform before opening to business-to-consumer (B2C) brand users in 2019 — are not especially new in China. Neither are secondhand luxury stores, with Hong Kong’s handbag-focused Milan Station expanding into major Chinese cities more than a decade ago.

But now the shift is to online, with luxury e-commerce platforms Poizon (which sells both pre-owned and new products from its brand partners), Plum, Ponhu, Feiyu, and Isheyipai among the contenders fighting for larger shares of a lucrative market that is poised for major growth.

Meanwhile, the rise of short video and e-commerce livestreaming has also had an impact on the luxury resale space, with TikTok’s China-market cousin Douyin seeing a rise in sellers of pre-owned luxury bags over the past two years.

Get your copy of Winning China’s High-Spending Cultural Consumer: The Future Of Luxury on our Reports page.

COP27 sustainability Stella McCartney H&M Kering

COP27: Stella McCartney, Kering, And H&M Announce Call To Action

What Happened: For nearly 30 years, the United Nations Conference of the Parties, better known as COP, has served as the banner under which the world has gathered together to discuss and assess climate change. This year’s 27th edition (COP27) is widely considered crucial if the climate emergency is to be brought under control. More than 200 countries are attending the summit, which runs from November 6–18 in Egypt’s Sharm El Sheikh. 

As a sector responsible for the razing of over 3.2 billion trees a year, 10 percent of carbon emissions, and 20 percent of global water waste, fashion ranks high on the agenda. Numerous brands, suppliers, retailers, and activists are among the 200-plus delegates in attendance. This year, Stella McCartney, Kering, and H&M launched a call to action for the transition to sustainable fabrics by 2025. Meanwhile, the non-profit organization Global Fashion Agenda announced the launch of its Fashion Industry Target Consultation to identify a more concrete approach to achieving net zero. And it was significant that Zalando, Germany’s biggest fashion retailer, was also present.

Stella McCartney’s S-Wave 1 sneakers are crafted from a grape-based alternative to animal leather. Photo: Stella McCartney

The Jing Take: Let’s not beat around the bush here. The situation has surpassed the point of climate emergency. What we are facing is climate devastation. According to the United Nations climate agency, even if the world meets current pledges for 2030, global heating levels would rise to a catastrophic level. This, and other equally pessimistic data such as that regarding increasing temperatures, means the values of the provocative event are, once again, being called into question. COP27 has been skipped by the iconic environmental activist Greta Thunberg — who described it as a forum for greenwashing. Indeed, as global inflation rises, it has seen a vast increase in the number of attendees from the fossil fuel industries. 

The global environmental non-profit Canopy has stated that to achieve scale, commitments from the world’s biggest fashion companies are needed immediately to make sustainable fashion more cost-effective. These have not been, on the whole, forthcoming. Meanwhile, Forest 500 has found that one-third of the world’s most influential companies have yet to make a forest conservation commitment; this includes luxury companies. Maybe if there’s a takeaway to be had from this event, it’s simply that the sector isn’t up to the challenge. LVMH and others can save a burning building in Paris, but the world? Can the sector even contemplate the level of commitment required to bring about radical change? 

Meanwhile, in China, Kantar found that while 54 percent of those surveyed knew about the summit, a staggering 19 percent admitted to not being aware of it. But despite this figure, maybe it is to the planet’s biggest polluter that the world can look for hope. In recent years, sustainability has become a growing topic in the country and citizens, especially Gen Z, are particularly attuned to this issue. Since the outbreak of COVID-19, the mainland has experienced a number of environmental catastrophes, such as the flooding in Henan which led to 302 deaths and over $17.6 billion (125 billion RMB) of direct economic losses. During COP26, Beijing unexpectedly announced plans to achieve carbon neutrality by 2060, which the Climate Action Tracker projects will be met comfortably. While the 20th Party Congress in October failed to deliver any new policy updates on climate, Xi did vow to “basically eliminate” heavy air and water pollution and bring soil contamination under control.

China is on track to account for 30 percent of luxury consumption by 2025, up from 25 percent. Frankly, if labels want to be cynical, being ethical plays well with young Chinese consumers. And we have seen how impactful locals can be when it comes to boycotting, or speaking with their wallets. Given the oversized role the county will now have in luxury spend, it’s not hyperbole to say that if Chinese shoppers hold brands to account, it could have a considerable impact. Granted, it won’t end the crisis. But it could force companies, not only luxury ones, to begin taking it seriously. 

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Ugg x Feng Chen Wang has set sail in China, but doesn't launch anywhere else until January 2023. Photo: Ugg

Song Yan Fei In Feng Chen Wang x Ugg, Nike x Soulgoods, And Be@rbrick: China Collabs Of The Week

Can local collaborations help transform a tainted brand image in China? This week, Nike’s apparent strategy suggests it’s on track to find out. The global sportswear giant was hit hard by the Xinjiang cotton backlash of 2021, announcing that the country was its worst performing market in Q1 2022. But Shanghai’s popular sneaker retailer Soulgoods has subliminally urged local hypebeasts to leave that in the past, dropping three exclusive Dunk Highs with the brand for the first time. 

Also in the footwear space, Feng Chen Wang has launched a new deconstructed take on Ugg’s signature silhouettes in the mainland. This time, there’s a clothing line to accompany the boots too. And another retailer, Shanghai-located ACU, has collaborated on a limited-edition product: the Be@rbrick x Jahan Loh.

For the Jing Collabs & Drops verdict on the best brand collaborations in China, check out the below and be sure to subscribe here to receive weekly brand collaboration updates in your inbox.

ACU X JAHAN LOH X BE@RBRICK

Acu x bearbrick x jahan loh

Retailers tapping brands that they would ordinarily stock, such as Acu collaborating with Be@rbrick, is a reliable route to meet the interests of existing consumers. Photo: Acu

Launch date: November 7

Trend: Global Brand x Local Retailer

Verdict: Known as China’s first sneaker boutique, Shanghai-based retailer Acu understands the power of a collaborative collectible. Singaporean pop artist Jahan Loh has an established fanbase too, so this Be@rbrick is basically enhanced merchandise for him and the store, with interests from both fans definitely crossing over. Loh has previously dropped collaborations with G-Shock and British bicycle manufacturer Brompton. However, this is the most targeted at his APAC clientele and the streetwear space. Acu is an effective choice for collaborators looking to connect with China’s tight-knit streetwear and sneaker scenes. 

UGG X FENG CHEN WANG

Song Yan Fei wearing Feng Chen Wang x Ugg. Photo: Weibo

Song Yan Fei wearing Feng Chen Wang x Ugg spurred a ton of social media mentions. Photo: Weibo

Launch date: November 11

Trend: Global Brand x Local Independent Designer

Verdict: Proving how ongoing footwear partnerships can be fruitful for both brands, this marks the third time that Ugg has worked with Feng Chen Wang since the start of 2021. Online, the main source of engagement for this collaboration is down to being worn by the Chinese actress, singer and dancer Song Yan Fei to the Feel House Ugg event in Kuanzhai Alley, Chengdu. Inviting designers such as Feng Chen Wang to reimagine its trademark silhouettes is a great move for Ugg — it provides the brand with a combination of creativity, fashion industry affinity, and newness. Furthermore, it fast-tracks building connections with its crucial Chinese fanbase — that seems to be priority, considering that the global launch isn’t until January 9.

NIKE X SOULGOODS 

nike high dunks

Nike shows signs of taking the brand collaboration route to save face in China. Photo: Nike

Launch date: November 26

Trend: Global Brand x Local Retailer

Verdict: Likely in a bid to win back Chinese fans, sportswear giant Nike has teamed up with China’s streetwear store Soulgoods to launch three Nike Dunk High sneakers. In the first quarter of 2022, China was Nike’s worst performing market, but focusing on a local collaboration strategy could help turn that around. Tapping a global name is also a way for Soulgoods to drive hype. And that it has, with multiple local press outlets covering the drop, from Kicksvision and Kiks, to Nowher, Nowre, CLZ and Platinum Webzine. Just like they were in the noughties, Nike Dunks are at prime popularity right now, so it’s a great choice of silhouette. The whole design is intrinsically Chinese, taking color inspiration from the album artwork of Chinese rockstars Ji Ming and Wu Yue. Plus, the tongue and sides feature “Soul Tiger” graphics. 

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China International Import Expo

Decoding China’s CIIE And What It Means For Foreign Brands

In 2017, Chinese President Xi Jinping announced the creation of the annual China International Import Expo (CIIE). Its purpose is to expand “China’s opening-up” and turn the nation’s “enormous market into enormous opportunities for the world.” Since 2018, the government-backed expo has been held at the National Exhibition and Convention Center in Shanghai. 

In 2021, over 2,900 enterprises from 127 countries participated in the six-day event, and the value of deals reached during it was $70.7 billion. This year, the fifth edition of CIIE hosted enterprises from 145 countries, including multiple brands under L’Oréal, Kering Group, and Richemont, and the value of intended deals jumped to $73.5 billion. Of those who attended, there were 284 Fortune 500 companies. The message from China’s latest Congress intimated that the country, despite “Dynamic Zero” COVID restrictions, does not want to isolate itself and welcomes more international trade.

The growing importance of CIIE

Government-run trade fairs are not known for their glamor, nor appeal to cutting-edge fashion brands and design houses — even when partnered with prominent institutions such as the World Trade Organization. However, with COVID-19 restrictions still hampering business travel to China and making it nearly impossible for local citizens to shop abroad, access to the massive Chinese market has been siloed.  

Previously, foreign brand teams and independent designers freely flew in for brand events, trunk shows and smaller expos. Since that’s now very difficult, these have largely stopped or activations have refocused on local teams when the China market presence is already established. The threat of sudden lockdowns or cancellations if an outbreak occurs also looms. Independent events run the gamut of these risks, but government ones can often mitigate many of them. 

With access to the market largely limited to within Chinese borders, many big foreign consumer brands in beauty, fashion, tech and luxury have flocked to CIIE in past years. Brands are also keen to display innovation, strength and dedication to the China market, and doing this under a government event banner nods to a more formal commitment. The fact that President Xi delivers a keynote address at each CIIE speaks volumes about its importance to China.

Who attends CIIE and why?

As one of the biggest commercial events in China, CIIE is divided into six areas: consumer goods, food and agriculture, automobile, intelligent industry and information technology, medical equipment and healthcare products, and trade in services. 

The event also hosts forums and conferences that discuss the latest developments in various sectors. L’Oréal, for instance, just held the first-ever North Asia Beauty Industry Summit that explored the role of technology and innovation in the future of beauty at CIIE. 

L'Oreal China International Import Expo

L’Oréal hosted its first-ever beauty industry innovation summit during CIIE. Photo: Courtesy

Aside from showcasing brands in the Chinese market, CIIE paints China as an adamant defender of globalization and international trade. It was no coincidence that the first CIIE was held just as the Trump administration started its trade wars. This year, as an op-ed from Global Times points out, CIIE takes on the extra significance of demonstrating China’s determination to remain “open.” It dispels speculations that the country wants to isolate itself simply to adhere to its strict “Dynamic Zero” pandemic policy.

The China-specific path for luxury

For luxury houses, CIIE provides an opportunity to outline their visions for the mainland market. Case in point is the Kering Group, which has participated in CIIE for four consecutive years. This year, Kering presented all its houses in a grand pavilion designed by the renowned architecture firm Gensler. The layout resembled a free and interconnected galaxy, with Kering at the center and each house evolving in its own direction under a dome of a calm, clear summer sky. Notably, the 2022 theme reflected the literal meaning of Kering’s Chinese name “opening clouds,” highlighting the creativity and expertise of its brands.

All brands under Kering participated in CIIE this year. Photo: Kering

The event allows brands to highlight their latest and often exclusive offerings to the China market. It’s a opportunity to show cultural nuance and Chinese specific drops: Richemont’s Vacheron Constantin unveiled the Year of the Rabbit wristwatch in its “Legend of the Chinese Zodiac” series, while Cartier presented its China-exclusive Panthère Day Night Watch. Meanwhile, the focal point of Australian wine brand Penfolds’ exhibition was its recently-launched “One by Penfolds” series, which included grapes from China for the first time.  

Pledging and advertising sustainable initiatives

Sustainability was a core part of many brands’ messaging at this year’s expo. All this aligns with Beijing’s narrative on sustainability and climate change, as well as Chinese consumers’ rising consciousness for health and environmental issues when it comes to consumption. 

Japanese company Yusen Logistics highlighted its green services at the fifth CIIE. Photo: CIIE Bureau

Kering’s pavilion was of an open circular design and constructed using reusable modular elements, signifying a circular economy with green consumption. “We are committed to driving our Houses to achieve the Group’s strategic vision of Modern Luxury with a sustainable and responsible business model,” explained Jean-François Palus, Managing Director of Kering.

Meanwhile, Nike showcased its collaboration with Alibaba’s Ant Forest campaign, which plants trees in China based on users’ low-carbon activities. For each pair of used sneakers recycled through Alipay, users can receive 1.3 kilograms of “green energy” in Ant Forest. Using its Nike Grind technology, Nike then turns recycled sneakers into construction materials to build sports fields in China. Over 25,000 pairs of sneakers have been recycled since the collaboration launched in September. 

 

Maybelline metaverse China

As Beauty Brands Shutter Stores In China, Can The Metaverse Offer A Second Chance?

Enter the City of Rhythm, Maybelline’s metaverse debut on Tmall. Launched ahead of Alibaba’s Double 11 festival, the limited-time virtual universe comprises four spaces that showcase four signature offerings of the L’Oréal-owned cosmetics label. In this immersive environment, users are able to try on makeup, receive beauty tips from virtual livestreamers, play games, and enjoy music from spokesmodels, K-pop group ITZY.

The move marks another step in the brand’s digital transformation. In July, the New York-based cosmetics firm confirmed that it will close 14 freestanding physical stores in China nearing the end of their contract, citing a need to “adapt to the changes in the market and consumer demand.” Products will still be sold at nearly 10,000 offline stores across the country, such as Watsons and other multi-brand retailers, as well as online flagships on Tmall and JD.com. According to CEO Nicolas Hieronimus in an earnings call, the plan is for e-commerce to make up 80 percent of Maybelline’s China business.

Maybelline metaverse China

Maybelline debuted the City of Rhythm on Tmall to celebrate Double 11. Photo: Maybelline

“Compared with e-commerce, offline retail, especially offline retail that does not provide obvious experience value, does not have advantages in terms of consumer marketing coverage, conversion rate, and cost structure,” explained Lutina Gu, project manager at Daxue Consulting. “For brands like Maybelline that focus on affordable consumption, prioritizing digital marketing could be a better choice than opening a bunch of brick-and-mortar stores to attract technology-based young consumers and consumers in many sinking markets.”  

Maybelline isn’t the only brand shuttering underperforming brick-and-mortar counters in China. K-beauty brand Innisfree plans to shrink its store network there by 80 percent while Etude House and Hera are withdrawing from the market completely. Fashion houses have started retreating too: earlier this year, Danish label Selected shut down all 1,300 of its offline stores, fast fashion giant H&M quietly boarded up its three-story Shanghai flagship, and Gap closed more than 10 stores — then announced it was selling its Greater China business to e-commerce solutions provider Baozun

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Affordable beauty labels in particular have faced numerous challenges in the market, from pandemic-induced disruptions to the rise of domestic competitors. In fact, in a ranking of the top-selling makeup brands on Tmall during this year’s 618 festival, three domestic names climbed into the top five: Florasis, Colorkey, and Perfect Diary (Maybelline ranked No. 15). According to research firm Qianzhan, Maybelline’s market share in China fell from 10.7 percent in 2018 down to 4.8 percent in 2021.

“The new Chinese beauty brands are often affordable, and [their] overall design and quality have received positive sentiment,” commented Humphrey Ho, Managing Director for digital marketing agency Hylink USA. “Maybelline has always been a value player, and that doesn’t work in China. No ‘drugstore brands’ in China.” 

But rather than pulling out of China’s $81 billion skincare and beauty market, Maybelline’s foray into the metaverse offers an opportunity to reintroduce itself to young consumers. According to Tmall Luxury Pavilion, sales of luxury goods with 3D and AR features saw double-digit year-on-year growth in 2022, with consumers spending twice as long looking at these products. Showcasing its signature products in this unique environment allows the legacy player to revive its brand image while learning more about its target audience.

Maybelline’s virtual world highlighted key products like the Hypersharp Laser Liquid Pen Eyeliner. Photo: Maybelline

“The metaverse is an opportunity for discovery and relationships for both brands and consumers,” Ho continued. “Brands will obtain more insights into their wants and desires, what features of a product they are specifically looking at, which is an opportunity to establish or reconfirm consumers’ loyalty.”  

Other beauty brands have similarly incorporated Web3 into their China-focused digital strategies. In April, Shiseido-owned Nars Cosmetics created a limited-time virtual world exclusive to China Duty Free Hainan, allowing Chinese customers to customize avatars, try on new products and hairstyles, and earn virtual currency to redeem gifts with purchases. Meanwhile, Laniege and M.A.C have collaborated with Chinese virtual influencers Chuan and Ayayi, respectively, promoting their makeup through these hyper-realistic faces.

In the limited-time “Nonstop Nars Virtual World,” users could try out newly available makeup products with their avatar. Photo: The Drum

That said, the metaverse “plays a more obvious role in marketing and reaching potential users than the actual customer order conversion,” noted Gu. However, as more global names pile into the space, “doing metaverse may change from something nice-to-have to a must-have.”

But even so, the American brand best known for its iconic mascara will need more than flashy marketing tactics to boost sales and recover market share. As Ho summarized, “The metaverse and other channels are merely the anecdotal ‘lipstick on a pig.’ What Maybelline needs to do is return to China with their brand either clearly positioned as a premium brand worthy of the European price tag, leave the drugstore distribution channel, and provide true product superiority.”