Big Boost For Offshore Duty Free as Hainan Gains Right to Import Cosmetics Directly

This post originally appeared on The Moodie Davitt Report, our content partner.

CHINA. In a key boost for Hainan’s booming offshore duty-free sector, travel retailers will from this month be able to import certain international cosmetics brands direct rather than wait for them to be cleared through the Mainland and then shipped on as in the past.

While not representing new regulations as such, Hainan has now passed the relevant authorities’ stringent assessment process, meaning that certain cosmetics can be imported to the island through a similar process as the one implemented in Shanghai.

China Duty Free Group has experienced extraordinary success at its Haitang Bay shopping mall since the vast retail emporium opened in late 2014. For beauty products in particular, the mall has become one of the world’s most important doors.

China Duty Free Group has experienced extraordinary success at its Haitang Bay shopping mall since the vast retail emporium opened in late 2014. For beauty products, in particular, the mall has become one of the world’s most important doors.

China Duty Free Group President Charles Chen and three major brand companies confirmed the development to The Moodie Davitt Report, though all parties are still studying the complexities of the arrangements.

The news, covered in detail by Jason Cao’s Duty Free Expert, The Moodie Davitt Report’s close colleague in China, will be welcomed by China Duty Free Group and international beauty companies in easing severe supply chain pressures prompted by surging consumer demand. Due to the complex product clearing procedures that existed, many skus were out of season by the time approval had been granted to sell in Hainan.

The ability to import directly, which is subject to strict controls on product safety and regulatory compliance, is seen as crucial in advancing Hainan’s tourism sector.

The regional travel retail head of one leading beauty house told The Moodie Davitt Report, “This will give Hainan’s offshore industry a boost for sure as new brands will then be able to go directly to Hainan even if they are not currently registered in China. To me that is clearly the most obvious benefit.

“As for the brands already registered in China, we need to further understand the added value of this new registration opportunity vs the current one.”

Underlining the importance of offshore duty free, Estée Lauder last December opened its renovated flagship store – the brand’s largest in travel retail – at China Duty Free Group’s Haitang Bay International Shopping Complex

(Above and below) Many of the year’s biggest beauty launches and activations have been held at Haitang Bay

Another leading international beauty house executive pointed out to The Moodie Davitt Report that for any brand company to be able to leverage the new Hainan situation for offshore duty free it would require:

That the company be a registered entity on Hainan or that it authorize China Duty Free Group (which has a legal entity in Hainan) to register on its behalf;
That the product is only registered in Hainan and not in other provinces (currently the government only allows a single point of registration for any single sku – one product can only be authorised to one domestic entity for registration).
If the brand affiliate registers the sku in Shanghai, it would not need Hainan registration, but can simply add China Duty Free Group/Hainan Duty free as consignee to ensure the products can be imported to Hainan.

If the sku is a travel retail exclusive, the brand company can either leverage registration via China Duty Free Group or request the affiliate to do the registration in Shanghai.

We will bring you further details once final clarification has been obtained by CDFG and the brands but for now it is clear that high-level support for China’s burgeoning offshore duty free sector has just been taken to a new level.

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The Risk in China’s Huge Influencer Economy

This year’s Alibaba Singles’ Day celebration proved that a live-streamer can turn into a mega-influencer that garners the same attention as a top idol. Starting his career as an online lipstick salesperson on Taobao, Li Jiaqi has since become one of the most recognized internet celebrities in China. His overnight explosion in popularity is shedding light on the unique influencer phenomenon that’s been birthed by China’s highly-competitive e-commerce and social media platforms.

Idols were always considered to be the best drivers of luxury products, but the mega-influencers are catching up. According to the Baidu Keyword Searching Index (the Chinese equivalent of Google), the search volume for Li Jiaqi was higher than top idols Cai Xukun and Kris Wu over the past month, which would be unheard of during the early days of celebrity influencers. From Zhang Dayi (a former No.1 influencer in China) to Li Jiaqi, businesses wanting to market in China must look at what’s happened to China’s influencer economy over the past decade in order to understand what Chinese influencer trends we will see in the future.

The commercialization of Chinese influencers wouldn’t have occurred without the help of a Chinese startup known as Ruhnn: China’s biggest influencer facilitator and the creator of one of today’s most popular influencers, Zhang Dayi. Featuring two business models — full-service and platform — Ruhnn makes a killing by carrying out entire Internet KOL e-commerce operations while providing brands and merchants with KOL sales and advertising services. But despite their success, the first Chinese influencer incubator has stumbled upon entering the stock market, and the future of Ruhnn is as indeterminate as those of many internet celebrities. The company took a 37.2 percent slip right after its $125 million Nasdaq IPO in April, and investors question the long term profitability of Ruhnn’s business model, which mostly relies on one top-tier KOL and her Taobao business.

The Taobao-centric model that Ruhnn is reliant on is a typical full-service package that includes influencer training and marketing, product development, and store management. It activated the commercialization of KOLs in China as Alibaba gave birth to the online shopping platform Taobao, but as more oversees brands tap into China and launch on Alibaba’s newer Tmall platform, original Taobao stores tend to be less competitive in this crowded e-commerce battleground.

According to Ruhnn’s Q1 Fiscal Year 2020 investor presentation, the company has been expanding its influencer sales and advertising services, both of which contribute more to its gross profit every year. This adjustment, along with Li Jiaqi’s explosion and other live-streamers’ springing up, points toward a trend in influencer e-commerce: a platform-oriented model that connects influencers, brands, and consumers.

The emergence of many new social media platforms and types of digital content has also been shaping China’s e-commerce and the influencer economy. Different from the relatively fixed social media matrix of Facebook, Instagram, and Twitter in Western countries, new Chinese platforms continuously re-engage Chinese users, particularly millennials and Gen Zers. Words, images, videos, and live-streaming have had to adapt to each different platform. WeChat is suitable for influencers who are talented at writing stories, while Weibo encourages and supports influencers to post short videos. The process of attracting followers and driving online traffic is time-consuming, and traffic usually sticks to platforms in particular ways. Thus, the transition from one to another is a challenge for influencers.

The popularity of short videos and live-streaming has contributed to the Li Jiaqi “cult.” His emotive rhetoric, which easily provokes viewers into buying products, can only be realized through video format. However, his reputation has recently been threatened by a misleading promotion for a product that failed to work during a live-stream. This is creating a trust crisis for consumers with high expectations of these influencers, and the incident only reinforces that they’re looking for reliable experiences and knowledge.

Despite the challenges of influencer e-commerce, platforms are still exploring ways to optimize this community. As a leader in this industry, Tmall Global announced in early November that they’re launching an “influencer incubator” to facilitate a worldwide influencer ecosystem. The plan is to train and support 2,000 mega-influencers and to build up a network of “wangzi” (an upgraded version of “wanghong,” which means internet celebrity). Tmall’s ambition is to provide influencers who can connect global brands to consumers in China’s marketplace. The first big experiment with this initiative was a live-stream collaboratively hosted by Viya Huang and Kim Kardashian West on this year’s Singles’ Day.

While the mega-famous Kardashian West owns 152 million followers on Instagram, her connection with Chinese consumers falls below the average influencer’s popularity. Despite her prowess in the American influencer economy, Kardashian West has had to adapt to a set of different rules to win over consumers in China, and Viya, who is currently that country’s top live-streamer, can help accelerate this process. Although Kardashian’s debut in China around Singles’s Day was nothing short of awkward, she was able to sell out 15,000 KKW fragrances in a few minutes with the support of Viya’s loyal followers, with most not knowing who Kim Kardashian West even is.

Internet stars like Viya and Li Jiaqi can play a big role in introducing foreign brands and overseas influencers to domestic followers, yet some well-educated consumers are meticulous about KOL credibility and tend to trust influencers with whom they share similar experiences and backgrounds. As livestreaming on Douyin, Kuaishou, and Taobao has become popular with users in lower-tier cities, top-tier consumers don’t tend to keep up with new livestreamers, as they don’t spend hours watching livestreams. This elite group of consumers also presents a greater desire for individuality — as well as fatigue for mainstream brands — and now their craving for “niche” content has spread to the types of KOLs they prefer. Though micro-KOLs cannot compete with the big ones in terms of sheer numbers, their followers’ stickiness and buying power are by no means inferior.

The future of China’s influencer economy is still murky, and it’s crucial to take a step back and question what types of influencers Chinese consumers expect. Is it a salesman? A role model? A content creator? The answer is all of the above and more. Therefore, agencies and MCNs shouldn’t solely look to make KOLs bigger stars or increase their number of followers. Instead, they should embrace diversity and fluidity among influencers since each type of character can play a valuable role in this burgeoning economy.

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China’s “Quality Crackdown” Puts Coach, Tory Burch in Crosshairs

Longtime observers of China’s fashion and luxury markets are well aware of the country’s occasional, highly publicized crackdowns on the quality of imported foreign brands, which often coincide with periods of tension with the U.S., Europe, Japan, or South Korea — or a mix of all of the above.

This week, amid signs that the a U.S.-China trade deal is highly unlikely in the near term, the Shanghai Market Supervision Bureau announced the results of a “random quality inspection” on 125 batches of clothing in Shanghai. According to the bureau, 23 batches failed to meet their quality standards, with brands such as Tory Burch, Coach, Tommy Hilfiger, and DKNY called out for missing the mark.

Chinese press noted this week that the quality inspection involved items from 36 companies and focused on meeting “mandatory standards” such as pH, tensile strength of materials, and colorfastness.

The department ordered the companies that failed its tests to “immediately stop selling substandard products, comprehensively clean up the products in inventory and on sale and take proactive measures to protect consumers in accordance with the requirements of relevant laws and regulations.”

Beyond a spate of bad PR this week in Chinese-language press and the annoyance involved with recalling any inventory that failed the quality standards, this latest quality crackdown likely won’t have much of an impact on brands like Coach and Tory Burch. But it’s a sign to other brands that — whether warranted or not — they need to be prepared for the same to potentially happen to them.

This kind of punitive crackdown, which predominantly targeted American brands, is par for the course for foreign brands in China around times of high international tension. Jing Daily readers might remember similar targeting of Japanese brands in 2012 and 2014, South Korean brands in 2017, or even the short-lived singling out of Canada Goose last year amid tension around the arrest of Huawei CFO Meng Wanzhou in Vancouver.

In most cases, brands wait out the bad press and get back to business once the heat dies down. This will undoubtedly be the case for the likes of Coach and DKNY, which haven’t yet seen news of the quality crackdown widely translated into English.

Now that brands are past the 70th anniversary of the founding of the PRC — and the massive amount of scrutiny of their advertising and marketing that preceded it — most can breathe easily and try to end a tumultuous 2019 on a relatively high note. Coach, in particular, is looking to have a better 2020 in China, with an impending “third-time-lucky” launch on Tmall, and thankfully — for that brand — this Tmall launch should drown out any residual bad press from this Shanghai quality crackdown.

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Inside of SKP and Gentle Monster’s Newly Created Mall

What happened:
SKP Beijing, a fixture in China’s luxury retail scene, is about to open SKP South, a hip version of the flagship shopping mall directly across the street. Working with Gentle Monster, a brand is best known for its trendy eyewear, as well as their avant-garde retail spaces, there’s been much speculation about what will come out of this collaboration between the high-profile retail giant and a creative disruptor?

On December 4, a group of journalists stepped into the ultra-futuristic, museum-like SKP South for a press preview. At the concept café located in the third floor, we were treated with deserts in the shape of an ear and a mushroom (in Gentle Monster’s aesthetic style), and seated in the middle of the café was Gentle Monster CEO Hankook Kim and Vice General Manager of SKP, Xie Dan, who shared the story of how the collaboration came about:

“Mr. Ji (the CEO of SKP), really loved our stores’ style, so he called me to discuss the new department store,” said Kim. “Even though Gentle Monster is an eyewear brand, our core DNA is creative thinking, so together with SKP, we started planning an alternative vision of traditional luxury department store.”

While the core function of a mall is still shopping, Gentle Monster wished to evoke a deeper reaction from consumers. “It’s about how to break consumers’ expectations and constantly surprise them with new ones,” Kim explained. This appears to resonate with millennials today, who are looking for more meaning behind their purchases. Kim then pointed to a robot sheet display on the first floor as an example and asked, “While we may feel free in front of AI and a robot, how do we protect the emotional feelings?”

Bottom Line:
Is there more to the collaboration between SKP and Gentle Monster? “We benefited greatly from the partnership,“ Kim answered, but refused to comment on whether Gentle Monster was taking a shareholder role in the new venture. He also confirmed that creating new retail spaces wouldn’t be another revenue stream for Gentle Monster, though his team will continuously monitor the customer experience and rotate the displays inside of SKP South.

How much will SKP Select’s avant-garde retail design help to sell luxury goods? From what we could gather, it appears that consumers may stay a little longer than at your average shopping mall. And it’s easy to see why: There’s a maze of artworks to get lost in and many, many new independent designers being introduced there, or simply enough, the café makes for an enjoyable spot to while away an afternoon reading. But then, again, time will tell.

Outside of SKP S. Photo: Ruonan Zheng

Outside of SKP S. Photo: Ruonan Zheng

Upon entering, visitors are greeted with art installation named Future Farm.

An interactive installation made by artist Daniel Rozin, called Penguins Mirror.

An interactive installation made by artist Daniel Rozin, called Penguins Mirror. Photo: Ruonan Zheng

Shoe collection area with art installation about discovering Mars.

Shoe collection area with art installation about discovering Mars. Photo: Ruonan Zheng

The third floor is designed as a space ship tunnel.

The third floor is designed as a space ship tunnel. Photo: Ruonan Zheng

Two robots are engaging in a conversation about the present and the future.

Two robots are engaging in a conversation about the present and the future. Photo: Ruonan Zheng

SKP Rendez-vous cafe

SKP Rendez-vous cafe. Photo: Ruonan Zheng

Sneaker brand Golden Goose offered customization service. Photo: Ruonan Zheng

Balenciaga store. Photo: Ruonan Zheng

Moncler store. Photo: Ruonan Zheng

Anna Sui store is located on the third floor. Photo: Ruonan Zheng

Anna Sui. Photo: Ruonan Zheng

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Emerging Designer Handbags Are Succeeding in China

By Far is a four-year-old Bulgarian accessory label winning over a large number of Chinese followers. It already has over 4,500 mentions on shopping platform, Little Red Book, and it’s “Rachel” bag is vying for the coveted title of China’s newest “It” bag.

Emerging handbag brands like By Far have captured the Chinese consumer imagination recently, witnessing a growth in popularity and a sharp rise in awareness. Yet, without the added legacy of traditional luxury handbag brands normally preferred in China, how exactly do these niche brands gain their share of the highly competitive handbag market?

Firstly, in the West, emerging brands’ merchandising is deeply rooted in Instagram. Admittedly, while there are limited users of the app in mainland China (it can only be accessed via the use of a VPN), labels that value their Chinese fans on the platform see more benefits. Recently, the BoF report “Instagram Does Matter in China. Here’s How Brands Can Use It” shed light on Instagram’s indispensable influence on boosting brands’ presence in the mainland. Users of the app are seen as open-minded and sophisticated and are therefore not only targeted consumers but can function as the link between them and other potential followers. As well as By Far, this Instagram-focused strategy has brought success to other emerging brands such as Manu Atelier, Staud, and Cult Gaia who are also trending on social media wish-lists.

Admittedly, it is difficult for newer labels to compete with luxury houses’ billion-dollar business. However, their ability to tell stories that captivate local shoppers is helping facilitate connections with purchasers. Whereas luxury brands often struggle to react swiftly to the market, smaller businesses can adapt in real-time. Therefore, a localized and elasticated social media approach enables these designers to fully capitalize on China’s highly-developed e-commerce opportunities.

Celebrity endorsements can also significantly drive the sales of emerging designers. By Far has been expanding unexpectedly in the West thanks to “It” girls Bella Hadid, Kendall Jenner, and Gigi Hadid. In Asia, fans include Jennie Kim, a member of popular South Korean group Blackpink, which has a considerable fanbase in China. Brands similar to By Far are also tapping Chinese KOLs who have experience living overseas and are active on local social media as well as Instagram — these include Canadian-based fashion and beauty KOL @Oh_Emma, fashion blogger @Savislook, and Paris-based influencer @Gxiayan. Collaborating with such names can drive domestic and global traffic simultaneously: a gifted-handbag shared on such KOLs feeds help brands reach broader domestic consumers.

E-commerce additionally plays a vital role in raising awareness of these niche brands and much can be attributed to overseas e-retailers such as Shopbop, Farfetch, and Net-a-Porter. These online shopping destinations customize Chinese language websites, provide convenient delivery to China and offer targeted promotions and discounts. Their Chinese-friendly features facilitate personalised storytelling while flexible return and exchange policies encourage shoppers to be daring — to try new brands not previously on their radar. Affordable luxury e-tailer Shopbop, for one, has successfully promoted emerging brands to Chinese customers. Net-A-Porter on TMALL and Moda Operandi’s Mini Program now available on WeChat also offer easy access to more unusual brands.

This flexible transition from social media to e-commerce offers labels more diverse digital solutions to infiltrate the market. From Weibo to Taobao, and WeChat posts to Mini Programs, online traffic can be driven across multiple platforms, instantly. For example, WeChat’s online mini-store “Mr. Bags with Farfetch” shows that a seamless transition from browsing WeChat posts to on-site shopping (similar to Instagram’s shopping feature) often increases purchases.

Brick-and-mortar naturally plays a role too. Stockists like local department stores including Lane Crawford and independent fashion retailers across tier-1 and tier-2 cities (from Chengdu to Ningbo) means emerging brands can build an offline presence as well. Buyers familiar with their local market can go a long way in helping brands to communicate with targeted shoppers. Brands themselves are developing stabler and more direct relationships — and reaping the rewards.

A direct-to-consumer entry model keeps prices down for emerging players while attention from buyers often follows – and a segway into department stores and e-retailers. By Far uses the direct-to-consumer sales model. To further encourage purchases onsite it uses a Chinese-language option and offers product delivery; it waives international shipping fees and rewards include reposts and shout-outs on the official Weibo account. And so far, it’s working: By Far has managed to establish itself as a coveted niche label.

The identification of a “niche” brand is exciting to Chinese consumers yet these strategies do not result in a wider consumer base; instead, insider exclusivity is driving this niche cult. Previously, in the report, “How Niche Western Brands Are Accidently Gaining China Market ShareJing Daily has highlighted the allure of such labels, one that: “speaks to a Chinese person’s psychological need for self-differentiation and individuality.” For this group of followers, design innovation and individualism is a far more powerful statement than the logos of Louis Vitton or Gucci’s monograms. Discreet signature styles have become invisible logos to showboat individual status.

Handbags are not the only segment to experience a rise in appeal of niche brands. However, designers must enrich the meaning of the word in their specific sector and brands need to convince fans of the specialities of their products by foregrounding craftsmanship, quality, and small-batch production yet these attributes do not simply guarantee sales by themselves. In China, niche suggests something entirely oppositional to the popularity of “It” bags and a brand that self-identifies as niche is expected to offer some additional value. Potential fans are already well-acquainted with luxury and fashion; incorporating high-quality leather, provenance, and authentic innovation into brands’ storytelling is necessary to ensure they stand out in a competitive market. To navigate the Chinese handbag market successfully, emerging brands must also be flexible enough to speak to local consumers, build genuine brand relevance, and deliver exclusive experiences.

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America’s Cup S/Y Longtze: Saving China’s Sailing History For Tomorrow

China has a lot of history, going back a long time, that it seems people have been pretty much blasé about recent achievements. It creates a vacuum of artefacts for the last 100 years, before which “real history” begins. This is short sighted as today’s apparently mundane artefact – an America’s Cup-class yacht, for example – is tomorrow’s precious relic.

CHN 95 Longtze, China's first America's Cup-class yacht, ahead of the 2007 Louis Vuitton Cup in Valencia

Longtze ahead of the 2007 Louis Vuitton Cup; Photo: Pierre Orphanidis / Valencia Sailing

One such apparently abandoned and forgotten object was spotted at a shipyard in Hong Kong when an inquisitive history graduate was visiting a yacht undergoing repairs.

It turned out that the interesting vessel was CHN 95 Longtze, which represented the Qingdao International Yacht Club at the 2007 Louis Vuitton Cup in Valencia. It was both the first America’s Cup-class yacht and the first carbon composite boat ever to be built in China.

China Team was among 11 teams that competed in Valencia, Spain, for the chance to challenge holder Alinghi for the America’s Cup. Frenchman Pierre Mas was the Skipper of China Team, which had an alliance with Le Defi.

Two of the crew were Chinese and the campaign was primarily funded by investment guru Wang Chaoyang. Eventually, Emirates Team New Zealand won the Louis Vuitton Cup before losing to Alinghi for the America’s Cup.

CHN 95 Longtze, China's first America's Cup-class yacht, was discovered ‘high and dry’ in Hong Kong

The America’s Cup-class yacht was discovered ‘high and dry’ in Hong Kong

However, for the last several years, Longtze’s hull and mast have been lying forgotten in
 the Hong Kong shipyard and are deteriorating badly. One investor had planned to transform the once-proud racing yacht into a sailing adventure boat for tourists, but the plans foundered, leaving the yacht literally high and dry.

The ‘inquisitive history graduate’ who saw her was Captain Paul Brackley, who decided to do something to try to preserve the yacht, with the support of his friend and business partner Greg Dagge. Brackley has been running superyachts in Hong Kong and China for the last 20 years, while Dagge is a highly-experienced yacht broker and Hong Kong’s three-time Champion of Champions sailor.

Over the last year, the pair ran over hurdles and jumped through hoops to get official recognition and status to register a charity. The China Maritime Sailing Memorabilia Association Limited (中國海事帆船紀念協 會有限公司), a non-profit organisation, is now established under Hong Kong authority to raise money to buy the yacht and restore her to original condition.

Greg Dagge (pictured) and Paul Brackley are working to preserve the , China's first America's Cup-class yacht

Greg Dagge (pictured) and Paul Brackley are working to preserve CHN 95 Longtze

After that, she could be displayed as part of a shore-based visitor education centre, ideally part of a bigger exhibition detailing the history of Chinese sailing achievement going back to Zheng He, Zheng Chenggong (or Koxinga) and further.

The static display could follow the example of other historic America’s Cup yachts already preserved and displayed, most notably New Zealand’s cup-winning yacht Black Magic from 1995 that can be seen at the New Zealand Maritime Museum in Auckland.

CMSMA hopes to employ local youngsters to undertake the restoration, introducing them to the yacht industry as well as learning useful skills.

A final home for the yacht has yet to be decided. However, the most likely location will be in Hong Kong, possibly at the Kai Tak Cruise Terminal, although CMSMA is keen to discuss other possibilities. That’s assuming we can help restore this iconic yacht, which represents a major chapter in Chinese sailing and sporting history, and deserves to be recognised as such.

For further details on the CMSMA and how you can help, please contact Captain Paul Brackley at [email protected] or +852 8191 4578

The original article appears in Yacht Style Issue 50. Email [email protected] for print subscription enquiries or subscribe to the Magzter version at:

Yacht Style Issue 50: The Superyacht Issue Out Now!



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Why China’s Gen Zers are Crucial for Luxury Jewelers

When venturing into the APM Monaco store in Soho, New York, one quickly notices that most of the customers are young Chinese. The salesperson even asks Chinese buyers to add the store’s WeChat account after their purchases — a nice touch that these shoppers seem to appreciate. For this silver jewelry brand offering around 40 new styles every month at affordable price points, half its business currently comes from China, and Gen Zers are one of its fastest-growing segments.

Yet that same group of consumers has little interest in gold jewelry. According to a recent report from the World Gold Council, only 12 percent of Gen-Z Chinese between the ages of 18 and 22 are interested in gold jewelry — the lowest percentage among all living generations of Chinese consumers. On top of that, only 31 percent of them agree that wearing gold helps them fit in with their friends, as compared to a global level of 46 percent.

The fall of gold jewelry as a status symbol with Chinese Gen Zers partially explains the rise of brands like APM Monaco, whose value for the young Chinese rests in the constant renewal of stylish designs as well as their products’ excellent finishing — despite a conspicuous lack of luxurious material. It’s also a reflection of how young Chinese consumers’ value system for luxury has moved from “showing money” to “showing talent,” according to the marketing agency Ogilvy. For young Chinese, jewelry is less about the story of the wearer’s status and more about the story of the item itself.

It may be surprising to hear that jewelry represents the highest growth rate of all Chinese luxury consumption categories for last year. This, combined with China’s growing and unparalleled appetite for luxury, begs the question: How can luxury jewelers find a new way to sell jewelry to China’s massive Gen-Z market?

For Gen Z, taste trumps bling 

For older generations, luxury jewelry brands were used as “a badge of status” where a few classic products served as universally-recognized status symbols. But the old ideas about status don’t apply to young Chinese consumers, as they want to be perceived as interesting rather than as rich.

Despite their fixed budgets, young consumers’ choices are much wider today, especially since appealing creations carry more weight with Gen Zers than brand names do. “Brand does not matter to me as long as the design is outstanding,” says Melody, a Chinese Gen-Z consumer who has studied in the United States for six years to Jing Daily about her jewelry tastes. “I would rather spend the same amount of money for a necklace from a less well-known brand with extraordinary design and craftsmanship than buying an iconic necklace from Van Cleef because the design feels outdated and will mark me in front of my friends as a person without taste.”

The message to luxury jewelers is straightforward: Chinese millennials and Gen Zers put more value in jewelry as self-expression, and luxury jewelers should adapt to what is currently their biggest spending group by putting out fresher designs. Tiffany’s rise — and Cartier and Van Cleef’s massive fall — with Chinese jewelry consumers reflects just how important style innovation is with this group. Tiffany’s new collection launches adapted to the younger generation’s desire to showcase their tastes, allowing them to connect with the brand. Meanwhile, the other two brands were much slower to launch new collections.

While iconic designs such as Cartier’s LOVE or Van Cleef’s Alhambra offers luxury jewelers brand recognition with consumers, leaning on those designs too much will only result in consumers growing weary of the look, especially Gen-Z consumers who require novel designs at a faster pace than their predecessors.

Materials take a backseat to craftsmanship

Because young Chinese use jewelry primarily for self-expression instead of status-seeking, materials hold less weight with their buying decisions. “As long as my skin isn’t allergic to the material, it doesn’t really matter,” says Melody matter-of-factly. But Chinese Gen Zers also care less about the material than older generations because they still don’t have the sophistication to understand the difference. “Unlike my parents’ generation who can tell the material by sight and care about the social impact of the material of a piece of jewelry, my friends cannot really tell the difference between different materials, so I don’t really care about the material as long as the product’s finishing looks excellent,” comments Yilin, a 22-year-old Chinese Gen-Z consumer whose mother is a sophisticated jewelry lover and she shops frequently for fashion jewelry from Western niche brands.

Chinese Gen Zers put jewelry’s value into a social context just as older generations do, except they have a different value system where the material isn’t a critical factor. Luxury brands who are interested in this market should consider offering jewelry made from less-expensive materials while still providing the quality craftsmanship the brand is known for.

Jewelry brands can be discovered by KOLs but must build trust themselves

Unlike past generations who first got to know brands in a physical environment like a boutique, Chinese Gen Zers have a multitude of channels where they can discover brands today. Even so, social media and influencer marketing doesn’t necessarily prompt the consumer to immediately make a product purchase. In fact, a Chinese consumer needs to encounter at least 15 touchpoints before they’ll make a purchase — that’s four more than the global average and almost double the amount in the U.S., according to the American consulting firm McKinsey.

KOLs are useful in introducing a brand, but they aren’t the final or most important point for validating a purchase when it comes to luxury jewelry,” says Yilin. “I still value the process of seeing and touching the product, especially for expensive jewelry. I think it’s the only way to tell the craftsmanship. Unless it is a cheap one that I decided to buy only out of curiosity, I don’t really trust KOLs recommendations.”

Word-of-mouth from family and friends, however, plays a more significant role for new jewelers wanting to  build relationships with Gen-Z consumers. “When I see my friend sharing her selfie wearing a pair of beautiful earrings, I will ask her what brand it’s from, says Yilin. “I will then look into the brand and trust the brand more because my good friend is wearing it.” For luxury jewelers, building intimacy with these consumers is far more critical than quickly gaining massive exposure — one of many new values that are starting to reshape the luxury jewelry industry in China.

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Luxury Brand Dior Stussy collaboration Misses China Mark

What happened:

Dior and Shawn Stüssy, the founder of the four-decade-old streetwear brand, Stüssy, announced a collaboration for the Dior Men’s Pre-Fall 2020 collection. The collaboration, which was confirmed by both Kim Jones, the creative director of Dior Men and Stüssy via Instagram posts, also marks Stüssy’s fashion comeback since his retirement in 1996. The collaboration debuted on December 3, at the Dior Men’s Pre-Fall 2020 show held in Miami, two days prior to the opening of Art Basel Miami Beach 2019.


Luxury-streetwear collaborations are nothing new. In 2017, the Louis Vuitton x Supreme collaboration not only rocketed Supreme’s popularity in China, but also opened a new door to younger Chinese consumers for Louis Vuitton. Given this success, it’s no wonder that more and more top-tier luxury brands are venturing into streetwear culture and the social buzz around it. Dior, however, missed an opportunity with their Stüssy collaboration by not fully promoting it prior to its debut. For example, Dior’s official Instagram video posts only highlighted the design approach without verbally mentioning who the collaboration was with, while on Chinese social media, Dior used only one Weibo post with the same vaguely cryptic video campaign showing only Stüssy’s iconic style without any verbal messaging. Moreover, the video was overshadowed by Dior’s other posts featuring the Chinese singer/actor, Karry Wang, in Miami for the upcoming show. Two weeks ago, Wang was appointed as the new brand ambassador for Dior Men.


The luxury brands that have ventured into the luxury-streetwear collaboration approach as a way to gain access to younger consumers’ attention have, in fact, under-communicated the messaging behind these collaborations, especially when it comes to China. Both Chinese millennials and Gen Zers have fervently pursued these types of collaborations, particularly when top-tier players are behind them. Take the Louis Vuitton x Supreme collaboration, which sold out in three days in Beijing, rather than the originally projected two weeks. Clearly the consumer demand is there, though relying on streetwear related social media rather than the luxury brand’s official account is limiting the collaboration’s intent to a very self-selected group of consumers and missing the wider range of luxury consumers that are looking for the next cool thing. Collaborations like the Dior x Stüssy are not very common, though at the beginning of the Dior Men’s Pre-Fall 2020 show, Dior announced yet another collaboration between the brand, but this time with — wait for it — Air Jordan! This exclusivity should be embraced and widely promoted in the West, and perhaps more importantly, to China’s eager consumers.

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Luxury Brand Strategies to Attract Chinese Airport Travelers

For Chinese passengers, international airports have evolved from mere transportation hubs to the ultimate shopping destinations thanks to their appealing duty-free policies. In fact, Chinese shoppers are splurging on luxury goods in airports more than any other group, topping the charts of the 2018 global duty-free sales market with a 13.2 percent share, according to the Swiss travel market research agency M1nd-set’s report on the global duty-free market.

As the passenger group with the most buying power in the world, Chinese travelers’ swelling traffic and consumer demands offer a lot of potential revenue, and to reach relevant Chinese consumers, worldwide airports, duty-free companies, and Chinese tech giants have collaboratively prepared an organic retail ecosystem for luxury brands. By driving sales and improving brand relevance, airports have become a sweet spot in luxury retail. But faced with thousands of airports around the world, what should brands look for when deciding to set up shop in one of them?

A common misconception is that shopping is a top priority for Chinese outbound travelers during their travels. But McKinsey & Company’s report on China’s Outbound Tourist Market has dispelled that myth, showing that experiences now matter more to them. Thus, how brands partner with airports to capitalize on in-store shopping experiences has become the key to winning over consumers.

Singapore Changi Airport is among the few airports that have been ambitious about redefining retail experiences with unique attractions, an array of brands, and warm service. The new Jewel Changi Airport, which opened in April 2019 as a nature-themed entertainment and retail complex that links three different airport terminals, exemplifies this new style of “experiential shopping experience.”

The mixture of gardens, attractions, retail, dining, a hotel, and facilities enriches the environment in a way that goes beyond shopping. Featuring an indoor oasis with a gigantic waterfall, the mall has become a must-see stop at the Changi Airport. Aside from the stunning interactive scenery, the mall also collaborates with brands on individualized offerings that are only available at the Changi Airport. This further heightens the relevance to targeted consumers, particularly families and millennials. The mall’s YSL beauty pop-up station, for instance, includes both a gaming program and a beauty “refuel” machine, and the brand even invites bands to perform for consumers on weekends.

Mall attractions help to diversify the functionality of the airport, transforming it into a tourist attraction and shopping destination. For travelers who usually spend limited time inside airports, these unique experiences will impress and motivate them to go back to the airport more than marginal duty-free discounts.

Convenience also constitutes an important element of a remarkable shopping experience for Chinese consumers. China’s local tech giants Alibaba and Tencent have infiltrated everyday Chinese life, and Chinese travelers expect the same convenient forms of mobile payment when traveling abroad that they get at home. Therefore, Alipay and WeChat have extended their payment systems into many other countries. To optimize Chinese consumers’ shopping experiences, shops and retailers at international airports are now coming equipped with China-friendly support facilities.

Furthering this initiative, Amsterdam Schiphol Airport became WeChat Pay’s first “smart flagship airport” this past May. By partnering with WeChat, the airport is now able to provide Chinese consumers a range of bespoke services including WeChat official account, WeChat Mini Program, and WeChat Pay. The airport has also set up a WeChat pick-up point specifically for Chinese consumers who shop through WeChat, saving them time at checkout.

WeChat has also launched a similar program aimed at improving the efficiency and convenience of duty-free shopping through a WeChat Mini Program called “Wetaxrefund.” Chinese consumers can get a tax refund sent directly to their WeChat Pay account, allowing them to skip the long process of checking shopping receipts and processing refunds. According to the partner list shown on the Mini Program, 85 international airports have supported this immediate tax refund service provided by WeChat.

On top of these services, many airports are also trying to take advantage of the enormous opportunity “daigou” (cross-border exporters) offers them. South Korean duty-free sales have been heavily propelled by Chinese daigou over the past two years, especially in the beauty sector. China’s new e-commerce law, which was put into effect at the beginning of 2019, was supposed to reshape the daigou business and the duty-free market, but there has been minimal impact on the field thus far. Incheon International Airport will set up a duty-free pickup area for Chinese daigou next year, as reported by South Korean media outlet JTBC.

One of the most critical considerations of operating airport retail is store location, and this remains true for attracting Chinese tourists. Brands can accentuate a travel retail opportunity by striving for an ideal storefront inside the airport while tracking ever-shifting travel trends.

At the end of 2018, The Moodie Davitt Report revealed that Louis Vuitton would open its duplex store in late 2020 at Hong Kong International Airport. Louis Vuitton and fellow iconic retailer Chanel are expected to elevate the airport’s profile for luxury lovers. Chanel will move into the place currently occupied by Rolex, while the new Louis Vuitton storefront will replace the Chanel position.

Hong Kong, Macau, Japan, and South Korea are all destinations with easy visa applications that are a short distance for Chinese travelers that prefer a shopping-oriented travel experience. But given the current protests in Hong Kong, passengers are flowing into other options. As has been widely reported by Jing Daily, luxury brands are losing money in Hong Kong, which had been a global retail center and a stepping stone to China’s market. The damage to local retail has also been felt in travel retail, thanks to the chaos triggered by anti-government protesters at Hong Kong International Airport.

Though it’s promising that Louis Vuitton has taken over the golden location in HKIA, its future in Hong Kong’s market is gloomy if tourism is threatened. Still, it seems to have found alternatives. Louis Vuitton Mansion Seoul opened on October 31, 2019, dropping a hint that LVMH is betting on the transition of Chinese luxury visitors from Hong Kong to Seoul. The Fashion Law has predicted that Chinese luxury consumers will spend $29 billion at South Korean luxury retailers by 2020, and if the country becomes the next big shopping haven in Asia, luxury brands must start targeting its international airports.

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The Business of Making a Mr.Bags

As the Year of the Rat approaches, Western luxury brands have been ramping up their zodiac-themed offerings to compete for a share of the vast Chinese consumer New Year market. Longchamp, the French leather goods brands, was one of the first to celebrate the new year, collaborating with the popular blogger, Mr. Bags, to release a capsule collection sporting a graphic chunk of bright yellow cheese, a cute twist on the fact that rats love cheese. The collection will launch on December 11 via Mr. Bags’ WeChat Mini Program and Longchamp’s online store, as first reported by WWD.

This isn’t the first collaboration between Longchamp and Mr. Bags on a zodiac collection. In fact, the past few years the two have come up with clever puppy paws and pigtail designs to ring in the new year. A brand’s goal of working with a local KOL, like Mr. Bags, is to create something other than a literal translation of zodiac for that year, and most importantly, generate commercial success.

If you’re not familiar with Mr.Bags himself, perhaps you’re familiar with some of the headlines behind the brand, such as, “Mr. Bags x Longchamp: How to Make 5 Million RMB in Just Two Hours” or “Tod’s Made a Killing from Mr.Bags Collaboration: Racking up Over 4.7 Million RMB.” And if the numbers don’t convince you, his collaborations extended from Chloé to Givenchy and Dunhill to Burberry.

It’s only been a few years, however, since Tao Liang, AKA Mr. Bags, went from being a 23-year-old Columbia University graduate student to the power bag influencer he is today, making international headlines. What’s behind the business of making Mr. Bags? Here, Jing Daily presents a few key insights behind the brand.

A Precise Positioning on Bags

As his name indicates, Mr. Bags only focuses on the bag category. He reviews nearly every luxury brand’s bag collections, from the classic to the latest, on the Mr. Bags WeChat blog. For luxury brands, accessories, and especially bags, are often considered a highly profitable market, because the price and life cycle of a bag is generally higher and longer than, say, a ready-to-wear garment. One may not need an LV dress but an LV Neverfull tote bag for your day-to-day activities. Also, handbags are often an introduction to a luxury brand for average consumers. Even better, sometimes a specific bag can be a great investment value. How much? Well, Mr.Bags is there to help.

A Super Salesman

By reviewing and sharing his insights with his 2.7 million fans on WeChat and Weibo, Mr. Bags receives instant consumer feedback on a bag, ranging from how much they love it, hate it, or want it. This valuable and actionable data has become the secret sauce for Mr. Bags’ business plan. In essence, his vast and loyal fan club serves as an important focus group, as they represent the collective voice for a specific bag in China, Mr. Bags can deliver this consumer insights to global brand executives. This has made Mr. Bags a super salesman, helping brands to sell and consumers to buy. More importantly, his accumulated experience has convinced luxury brands to co-create collections with him.

The “Minutes Sold Out” Model

Mr. Bags being able to sell out a specific bag in mere minutes makes for an intriguing headline but in reality, it’s the fruition of months of planning. First, there are days of pre-sales to VIPs, celebrities, and loyal fans of Mr. Bags. Then, once the bag actually is available to the mainstream market, the remaining inventory will be scooped up fairly quickly, as they are often limited in quantity. But, the numbers are thrilling and through marketing a limited edition bag, Mr. Bags has leveraged the namesake brand and star power celebrities to verify his personal branding.

Can there be another Mr.Bags? The answer is not absolute. Mr. Bags was not an overnight success, the building of his brand has taken a great amount of dedication. However, the birth of the Mr. Bags persona is absolute — it answered the consumer demand for a personalized solution with insider tips.

What do you think about the business of making a Mr.Bags? Feel free to comment down below:

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