Should The US Use China’s E-Voucher Model To Save Retail?

On June 3rd, the Beijing municipality government announced that it is going to issue electronic vouchers (e-voucher) to boost its consumer market recovery. Beijing is far from the only Chinese city government promoting e-vouchers, though, as most cities and provinces are rolling out initiatives to boost consumer confidence and ensure that shoppers return to retail stores.

The South China Morning Post reports that the city of Jiaxing in Zhejiang province is distributing 200 million yuan ($28.2 million) worth of digital consumer coupons, of which 150 million yuan can be redeemed through WeChat Pay. Meanwhile, according to Quartz, the city of Hangzhou, which is also in Zhejiang province, is releasing 1.68 billion yuan ($237 million) in coupons, and Nanjing in Jiangsu province has allocated 318 million yuan for them.

Even though there’s fine print limiting the number of e-vouchers a person can receive and the discounts and deals aren’t that high, retailers still expect these electronic coupons to boost consumption. And amid dire economic forecasts and the uncertainty that’s defining our times, comparable endeavors could have a temporary stabilizing effect on global retail. Sales and promotions are not long-term strategies, but they could keep brands and local economies afloat until we design more suitable tools.

Let’s look at why these short-term, government-released e-vouchers are a good strategy for driving success even in the West.

Stimulus checks versus coupons

In March, Congress passed a $2 trillion aid package aimed at relieving American households and the economy in general. The program provided payments of up to $1,200 to individuals or $2,400 for married couples and included an extra $500 for qualifying dependents.

According to Kellogg’s Scott R. Baker and fellow researchers, the recipients spent at least a third of their checks within 10 days of receiving these funds. The research also shows that a bigger chunk of this spending, compared to relief spending during past recessions, was primarily devoted to grocery shopping, takeout food, rent payments, and utility bills.

The Wall Street Journal rightfully points out that “the one-time cash distribution won’t boost economic output.” E-vouchers and coupons are a better short-term stimulus plan because they impact different industries by encouraging consumption across all sectors. Conversely, stimulus checks promote a drastic change in consumption patterns (one prioritizing utilities and rent) while they halt spending on more expensive consumer goods. That jeopardizes potential rebounds for hard-hit industries like tourism, automobiles, manufacturing, and even textiles.

Spending versus saving

While the vast majority of American taxpayers are spending their stimulus checks on essential monthly expenses, wealthier taxpayers are likely to save or invest their money rather than spend it on non-essentials. Accordingly, consumption doesn’t get stimulated, and retail continues to suffer.

We can see this phenomenon in Japan, where all residents of the country received checks of 100,000 yen ($936) as part of the country’s economic stimulus plan to help counter the effects of COVID-19. According to the Mainichi, a recent online poll showed that 25 percent of respondents planned to “save” their cash handouts, 13 percent will use the money on “investments,” and 8 percent will “pay taxes.”

Shan Weijian, a Chinese private-equity investor, said in an interview published on WeChat that cash subsidies like the ones offered by the Trump administration or some European countries aren’t the most effective way to correct the economy. “Cash subsidies have a limited stimulus effect on consumption,” he stated, while also pointing out that wealthier consumers will deposit their cash subsidies instead of using the funds for shopping.

Changing the retail experience by creating excitement

Alizila, the news hub for Alibaba Group, highlights how China’s e-vouchers are being allocated on a first-come-first-serve basis — a tactic that builds excitement for retail. This positive engagement leads “families and friends to set alarms and reminders as they try to outpace one another in a real-time lottery system to claim these digital rewards,” according to Alizila’s Daniel Rosenberg.

In the age of COVID-19, when retail sector survival is highly dependent on customer engagement, generating excitement through “experiences” is the best way forward. Jack Ma’s New Retail model is based on the concept of enhanced consumer experiences, and Western retailers need to foster this kind of experimentation if they want to survive the current environment.

E-vouchers aren’t just an efficient way to boost consumption — they’re also a key New Retail strategy that should be incorporated into most marketing plans. Digital vouchers boost consumer engagement and sales conversion rates while also building loyalty. They also come at a lower price point than physical coupons, so cash-strapped retailers can incorporate them into their marketing strategies without adding economic pressure.

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Can An Online French Couture Show Win Over Chinese Luxury Fans?

What Happened:

Paris couture shows are being staged online from July 6 (today) to July 9, where household luxury names like Chanel, Dior, and Valentino will present their Fall/Winter couture collections.

In this first-ever digital haute couture presentation for Chinese audiences, Dior premiered its pre-recorded, 14-minute film (directed by Matteo Garrone) on Weibo alongside the brand’s livestream featuring its ambassador, Angelababy, and the Chinese model Cici Xiang delivering their first impressions of the show. The digital presentation was heavily praised by Chinese netizens, hitting over 8 million views and receiving 32,600 comments on the social platform. Fans particularly liked the film’s fairy-tale aesthetic, vivid storyline, and references to Greek mythology.

Jing Take:

The Paris show wasn’t the first time Dior drove incredible traffic online in China. The house somehow found a way to leverage its celebrity friends despite not having them show up to an in-person event since Paris Fashion Week Fall/Winter 2020 this past March. For this haute couture presentation, Dior engaged with Angelababy’s 102 million followers but also benefited by inviting Cici Xiang to the event (the model holds an academic degree in art history, which enlivened discussions about the brand’s collection.)

While the digitalization of fashion shows risks weakening the emotional experience, some digital alternatives, such as directed films, are encouraging luxury houses to lean on narratives as much as their products. Since Chinese viewers are extremely intrigued by the stories behind each collection — from the backstage intrigue to the meaning behind a collection’s cultural references — luxury houses can satisfy them while also serving them their brand values and social initiatives during this post-COVID-19 climate. But make no mistake: Celebrity endorsements are still crucial for brands that want to grow their social media visibility and help local consumers understand their content.

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.

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How Moncler Found the Perfect Recipe for China’s Post-COVID-19 Market

Taking advantage of China’s recovery momentum, many established luxury brands have either released exclusive collections in the country or rushed to get on its online sales channels. Pouncing on this trend, the Italian down jacket brand Moncler created a series of online and offline events as a way to maximize exposure for a new product drop, and they garnered impressive results. The release, featuring designs by the godfather of Japanese streetwear, Hiroshi Fujiwara, was Moncler’s first 2020 drop from its highly regarded Genius Collection.

Moncler kicked off its online promotions with an hour-long Weibo livestream that featured singer and actress Song Qian, streetwear KOL Li Chen, and stand up comedian Pang Bo. Ever since Louis Vuitton’s public livestream flop on the platform Little Red Book, luxury brands have been careful about optimizing their presentations on this burgeoning format.

To keep the viewer continually refreshed, Moncler’s livestream was hosted in two different settings: a pop-up ramen noodle stand and a futuristic stage set. The presenters were also quite varied. Host Li Chen reprised his role as a TV show host, bringing a natural on-screen charisma and a wealth of streetwear knowledge with him. Throughout the livestream, actress Song Qian tried on many different styles, which highlighted the versatility of Moncler’s collection and enticed purchases from female fans.

To boost offline engagement, Moncler hired a Fragment food truck to circle Shanghai malls as a way to drive foot traffic in its shops. Meanwhile, visitors who registered their WeChat at Moncler stores were eligible to receive gifts.

It was a fast-paced, four-day event, lasting from June 29 to the line’s global release date of July 2. Moncler made sure to release a range of digital touchpoints, hoping to attract as many different consumers as possible — from hardcore fans who registered ahead of time to curious walk-ins.

A hyped product, a livestream chocked full of celebrities, and a series of savvy online and offline initiatives guaranteed a successful comeback for Moncler in China. As of this story, the brand’s livestream had garnered over 31.6 million views, breaking Chanel’s livestream record on Weibo. And according to Moncler China, almost every style and size from the drop sold out on the release day.

Moncler’s drop promotion strategies were hyper-local and involved a network of e-tailers, partners, and wholesalers. According to the brand, its plan over the rest of 2020 will be to emphasize hyper-local approaches with a global product. Its key markets, which include Japan, China, and Europe, will be serviced with tailor-made activations plans that feature relevant cultural players and technologies.

This strategy will ensure optimally-focused connections with a variety of consumers and should help the brand weather the second half of the year. Moncler reported a significant loss of revenue in Q1 2020, which brought its 24 straight quarters of double-digit growth to a shocking halt. Yet the brand known for its innovative campaigns will continue to push forward with what brought them recognition in the first place.

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Will Your Brand Survive The Chinese Decade?

This week, the US saw a record number of COVID-19 cases. Businesses that hoped to leave lockdowns behind and participate in an economic rebound now have to think twice. States like Texas have halted their reopenings, and regardless of their state’s official lockdown measures, many consumers are afraid to go out in public. Many shopping malls are empty, and retailers have far less traffic than before the pandemic. Any new infection surges could potentially take months to control if spring’s first wave is any indicator.

Meanwhile, Europe seems to have gotten the virus under control, at least for now. However, no one knows when consumer sentiment will return to its pre-COVID-19 levels. I’m advising all my clients to stay alert and to keep implementing thorough crisis mitigation measures, as it’s better to err on the side of caution than to risk a brand’s future.

Now that we’re seeing record unemployment levels in the US and Europe, it should take a while before consumer spending goes back to pre-pandemic levels. A study by JP Morgan from 2011 analyzed how fast economic indicators rebounded after the last recession. According to their data, unemployment in 2011 only gained back 20 percent of its 2007 level (the year before the 2008 economic crisis). If the past is any predictor, the pandemic will have a lasting effect on economic recovery. While I predict that the luxury sector will recover faster than others, it will still take a while for the US economy to return to its pre-COVID-19 strength. Équité had initially predicted a US luxury sector rebound would happen during the first quarter of 2021. But its latest forecast placed a potential rebound in the third quarter of 2021, with the full effect only taking place in 2022.

For luxury brands, that means they’ll need to accelerate their relief efforts and coping strategies. One crucial strategy will be a renewed China focus. China has proven to be the most resilient and fastest-growing luxury market. Many predicted the luxury sector to go into long-term slow-down when the government began taking action against corruption during the mid-2010s, but the opposite happened. While some brands saw short-term declines, the sector kept growing, and China soon became the top country for luxury consumption. Now, Chinese consumers account for approximately 40 percent of all global luxury purchases.

Équité predicts that by 2030, China could account for as much as 50 percent of the global luxury market. In other words: We are now entering the Chinese Decade. For luxury brands, success in China will become even more crucial than it was before. But, unfortunately, many brands aren’t prepared for this, as they’ve already severely underperformed in China (which I still believe to be the most underestimated market).

Given the Chinese economy’s solid rebound after the lockdown period, the Chinese market isn’t just important in the long-term. Over the short-term (the next 18 months), brands that aren’t able to connect with Chinese customers will suffer badly because other markets are still lagging. Chinese consumers are incredibly sophisticated: They worship luxury brands but are also incredibly savvy about every detail of a brand’s storytelling. Brands that don’t resonate with them don’t have a chance.

Since many luxury brands are struggling in Europe and the US, they understand that promising signs in China are both an opportunity and a risk. The top-choice luxury brands of high-end Chinese consumers now have a chance to gain a permanent share of the market when those consumers start spending again.

Meanwhile, this moment is a painful awakening for weak luxury brands that weren’t been focusing on China before the crisis. Brands that struggled before the outbreak will continue to lose momentum and relevancy, which is a deadly proposition in the short- or the long-term. For those brands, their issues will drastically accelerate, since a crisis always exposes and amplifies weaknesses. Even names that read like a “who’s who” of luxury brands are currently experiencing shock waves. Those that resisted change or were too slow in winning over Chinese millennials and Gen Zers are now in panic mode. Yet, many CEOs still hope everything will just “go back to normal,” even though their brands were failing before COVID-19. Now, they need immediate and drastic changes.

In China, brands must make a long-term commitment and have a precise customer acquisition strategy. Many brands are looking to China with the hopes of profiting from a COVID-19 rebound, but they will fail if they don’t have the right plan and advanced tools. I often see Western brands with marketing campaigns that are highly ineffective with an ROI that’s not close to competitive. To put it bluntly: Their content isn’t relevant, their sales and channel strategies are insufficient, and too few consumers have been activated. They waste money while the gap between their brand and the top brands continues to widen.

For brands to avoid a nightmare scenario, a rigorous China strategy is needed. It has to include brand storytelling, customer engagement, relevant content, a KOL strategy, a meticulous digital masterplan, and a China-proof digital infrastructure that allows for real-time brand and ROI management. Most brands’ China strategies have deficits in all areas. The awakening is brutal, forcing many brands to exit with huge losses. Money is burned, and brand equity gets destroyed.

Luxury brand CEOs need to acknowledge that Chinese consumers have a different profile than Western consumer profiles. They are much younger (between 25-30 is the sweet spot), are highly educated/sophisticated, have high expectations, and are digitally-native. They perceive a brand as a whole, not as the sum of its parts and features. That makes brand positioning and storytelling so much more intricate in China. And digital nativity doesn’t mean stores are obsolete to them, quite the contrary. For them, a store can’t just be a place of transaction anymore. It must create a unique experience to be relevant to young consumers.

China is the most promising and exciting market for luxury brands — both now and in the future. It is a tremendous opportunity for growth for those who can crack the China code. But for the others, it will sadly accelerate their downfalls.

Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the professor of luxury strategy and extreme value creation at Pepperdine University in Malibu, California. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a global keynote speaker, and holds luxury masterclasses in Europe, the USA, and Asia. Follow @drlanger

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NEIWAI Founder Reimagines Female Empowerment Through Lingerie

Despite the quickly-booming market for homegrown brands in China, learning to develop and deliver brand value and identity is a common obstacle for many of them. Yet, Xiaolu Liu, the founder of the Chinese lingerie brand NEIWAI, seems to have a decent grasp of it. She started her career consulting in the female consumer products category, accumulating hand-on experiences and insights by helping big-name clients define their strategies. That led to her founding NEIWAI in 2012.

Liu described lingerie, which is often deemed the most invisible of accessories, as a method of self-expression. Thanks to Liu’s keen sense of the female consumer market and the brand’s goal to help liberate and empower women, NEIWAI went on to expand its collection of intimates, becoming a lifestyle brand with multiple categories that also include loungewear, activewear, and home collections.

Born as an online startup, the brand quickly tapped into both online and offline channels, which include stand-alone digital shops on WeChat and Tmall as well as more than 80 brick-and-mortar stores on the Mainland. The vision and organic growth of the brand have attracted investment from several top venture capital firms, including Qiming Venture Partners.

During fashion retail’s post-COVID-19 moment of digital transformation, NEIWAI stood out thanks to its blockbuster International Women’s Day campaign in March titled No Body Is Nobody and the second edition of its collaboration with independent designer brand XU ZHI in May. Liu spoke with Jing Daily about the shifting consumer market, NEIWAI’s unique communication strategies, and her outlook for NEIWAI in the long-term.

What’s the biggest challenge you’ve experienced since founding NEIWAI in 2012?

Over the past eight years since NEIWAI was born, we’ve been exploring ways to find a balance between scaling-up and brand-building. It’s a challenging task for emerging brands in China’s market, as the domestic consumption climate and the capital market are generally impatient and expect rapid growth from brands. But I feel that building up a brand is a journey that asks for long-term dedication and accumulation. It’s crucial to keep that balance, especially when it comes to China, where the social media landscape is ever-changing.

Can you describe both the opportunities and challenges for DTC brands in China?

In NEIWAI’s case, we observed two trends among younger local consumers that might benefit homegrown DTC brands. First, they’re showing a strong interest in homegrown brands, be it streetwear or other designs, and they’re more willing to purchase products made in China now. Second, they’re hungry for good design after being exposed to leading global brands on social platforms like Instagram — now they can tell if the brand is dedicated to making good products.

However, in the Chinese e-commerce landscape, DTC brands have to rely on third-party marketplaces such as Tmall and Though online platforms bring invaluable opportunities for smaller brands in their early stages, there are dilemmas about how to drive sustainable growth, including how to develop intellectual property protection and pricing limits. One of our solutions has been to create offline channels where we can manage product pricing, the consumer shopping experience, and multi-channel sales.

What do you make of the domestic lingerie market shift, and how do you think the evolution of social media shape lingerie consumption?

The most notable shift is younger consumer behavior. When NEIWAI was founded in 2012, the wireless bra sector that we prioritize was still a niche in China’s market. Functionality and sensuality were what most local consumers looked for. The turning point emerged around 2015 when more and more female consumers, from millennials to Gen Zers, started to attach more importance to their comfort. The wireless bra boom shows that today’s younger Chinese consumers have greater mental and physical self-awareness, which is relevant to the development of social media. The new generations of KOLs are quite vocal about body positivity and women’s empowerment, and that has significantly shaped Chinese consumers’ perception of underwear.

How did NEIWAI adapt its communication and marketing strategies to resonate with younger generations?

I believe brands need to share more with customers than quality products, which is the basics, and that’s more about brand value. Thus, since the very beginning, our communication and marketing have been set on feminine values, whether it’s our dedication to women’s empowerment or how we encourage body diversity and positivity through our designs. Also, since lingerie is rarely shown off and is difficult to promote in an oriental cultural context, we decided to dig into the stories behind a woman’s body and her self-awareness and hoped it would resonate with our customers.

Your “No Body Is Nobody” campaign has gone viral on social platforms and sparked a lot of online discussions. What was the inspiration for the campaign? And how did customers respond to it?

The goal was to bring up body diversity as we expanded our previous niche of small sizes to more inclusive product lines. The documentary film featured in the campaign was condensed from in-depth interviews with normal women who went through various body shaming, from plus-size body shapes to bodies with scars. The campaign’s perception went beyond our expectations. Many of our social followers shared their personal experiences with us through comments or direct messages. The reason it’s been so well-received isn’t only because local women are open-minded and self-aware, but also because we aren’t dogmatic or pedagogical when we communicate with our customers, but prefer to be inspiring and encouraging.

Your recent collaboration with the homegrown fashion label XU ZHI was also very impressive. Can you share a bit more about the initiative and how you leveraged brand crossovers and collaborations?

The series includes three editions — last year’s underwear, this summer’s swimsuit, and this winter’s loungewear. The collaboration is based on the two brands’ similar journeys that explore intimate relationships with the self: NEIWAI encourages embracing oneself inside-out, and XU ZHI addresses external self-expression. The first edition was well-received by our customers last year, and that motivated us to continue our partnership. I think collaboration allows us to bring newness from outside our primary lines, whether it’s with designs or product categories. We can add some avant-garde twists to our core products by teaming up with talents and brands in different areas.

How did the COVID-19 pandemic impact NEIWAI, and how did you respond?

Both our online and offline businesses suffered in February and March because of lockdowns and negative consumer sentiment, but they have progressively recovered since late April. We took advantage of that time to prepare for the recovery and our offline expansion (our brick-and-mortar stores will increase from 80 to 150 stores over the second half of the year.)

Meanwhile, NEIWAI Active, our athletic line, has taken off during the quarantine period. It’s ballet-inspired since the spirit of workout is consistent with our brand identity, which incorporates power and grace. In addition to featuring endorsements from the established ballerina Yuan Yuan Tan and fitness KOLs, we have hosted a variety of offline activities with local gym chains to help build up our community. But the opening of our new store in San Francisco, which has been in the works a while, had to be postponed due to the growing pandemic in the United States.

Can you share more about NEIWAI’s plan for globalization?

We’ve been eyeing the US market for a long time, and San Francisco would be the entry point due to its large Chinese community. There is a big market for intimates designed for Asian female consumers.

Our global e-commerce site should debut in August, and the brick-and-mortar store will open after the pandemic. In the long-term, we hope to build NEIWAI into a globalized brand that represents Chinese identity. The European and Asia-Pacific regions are also on our agenda because many international buyers have been impressed with our brand consistency and how it’s distinct from many other homegrown brands.

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What Does China’s Revised Cosmetics Regulation Mean For Beauty Brands?

On June 29, China’s State Council officially issued the Cosmetics Supervision and Administration Regulation, which was approved back on January 3 of this year. First filed in 1989, changes to the former cosmetics regulation have been in the pipeline for years and will now be enforced thanks to a recent beauty market boom in China. The revised regulation, which will take effect in January 2021, introduces overarching measures on cosmetic company manufacturing and operations across the country as a way to keep the industry on a growth trajectory.

The filing also states that the government will now separate cosmetic products into categories: ordinary cosmetics and special ones with functions that support hair color/perming, skin brightening, and UV radiation protection. These will be managed through recordkeeping and a registration-based system.

Jing Take

The revised regulation will hold international niche brands with an eye on China’s market as well as emerging domestic beauty brands to a higher standard. The country’s supervision departments will apply more stringent measures to cosmetic products, especially imported ones. Therefore, global brands should pay closer attention to their local marketing strategies, particularly their functional products, because the new regulation punishes deceptive marketing practices such as misleading advertising.

Meanwhile, the effect will be more challenging for smaller or newer brands and retailers that often choose to start working in China via online channels. With the country’s cosmetics e-commerce business booming, these regulations will soon force companies to disclose comprehensive, authentic, and accurate information about their products. Therefore, e-commerce platforms will be tasked with inspecting cosmetics brands or online retailers and reporting violations to supervision departments like the National Medical Products Administration.

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.

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Should Western Fashion Schools Open Campuses In China?

Li Chao, a class of 2021 fashion print student at Central Saint Martins, recently returned to his hometown of Nanjing, since the COVID-19 pandemic has put a halt on his summer internship plans. “Everyone is thinking about taking a gap year,” he told Jing Daily. “Why would anyone want to [study] if we can’t use the machinery?” 

While much of the focus has been on the pain recent fashion school graduates are feeling due to COVID-19, the outbreak has also affected existing and prospective fashion students. Fashion programs’ business models have been completely upended by the virus, with current students thinking about taking leaves of absence and prospective students deferring their start dates, which has resulted in unparalleled losses of revenue from tuition fees. 

The Chinese student population at top fashion schools currently stands between 10 and 20 percent. Li’s class has five Chinese nationals out of 21 students who each pay £22,920 per year without scholarships or 1.5 times more than national tuition fees. After COVID-19 hit, the British Council stated that the virus would cost UK universities nearly 14,000 students from East Asia, including China, over the coming year, resulting in a loss of £460 million ($565 million) in lost income from tuition and living expenses. The think tank Brookings Institute estimated that California and New York, where art schools cluster, are risking over $400 million and over $300 million due to COVID-19.

Traditionally, fashion capitals like Paris, Milan, New York, and London have been ideal places for Chinese design students to study and live. But due to increasing demand, many top fashion schools have opened campuses in China, including Italy’s Istituto Marangoni, which opened a campus in Shanghai in 2014 and another in Shenzhen in 2016. Meanwhile, Esmod Paris has opened branches in Beijing and Guangzhou. Will the prolonged virus outbreak force other top schools to boost their China exposure?


The drawing room at Istituto Marangoni’s Shanghai campus. Photo: Istituto Marangoni

Repatriation of students in the short and long-term

Opening a China campus post-COVID-19 might be a viable way to counter a lack of physical classes for a sizable Chinese student body. For some, it might be a way to add revenue while they navigate the uncertainties of a bleak global economy.

Li is among the many Chinese students who returned home, since the majority of universities didn’t allow international students to stay on campus. But he’s also lucky to be in placement year while others have to continue with classes despite a 7-12 hour time difference with limited access to machinery or workrooms. 

Florence-based Polimoda has reopened the design workshops and the library for students who are still based there, said the director, Danilo Venturi, to Jing Daily in mid-June. As for those who are studying from home, the school provides face-to-face online courses for a live audience, or in playback form for students with large time differences. 

In comparison, China started reopening campuses in April as the central government has been imposing digital contact tracing. By mid-June, government data showed that 71 percent of students at all education levels had returned to schools. Given the quick recovery, the Hangzhou-based China Academy of Art, which has a renowned fashion study program, is due to hold its physical graduation show this week while most of its Western counterparts are exhibiting their student work online. 

Other than giving the Chinese student body physical resources, US schools should also open China branches to offer local students security amid rising China-US tensions. On the Chinese question-and-answer site Zhihu, COVID-19, and potential restrictions on visas like the student work visa Optional Practical Training (OPT) that was put forward by the Trump administration are considerations for Chinese students when thinking about studying abroad. 

Schools around the world, especially in countries that don’t have a contact tracing program in place, probably won’t fully recover unless an effective vaccine comes around in 12-18 months, according to the World Health Organization. So, having a China partner or campus would be a good contingency plan, but it could also bode well for the future. 

Cooperation is key

Examples show that working with a local partner — be it the government, business, or faculty — is key to breaking into the Chinese fashion education market. The founding of Istituto Marangoni’s relationship with the Shanghai municipal government came at the 2010 Shanghai World Exposition the same year that China and Italy celebrated its 40th anniversary of diplomatic relations. It smoothed out the required government procedures, said Istituto Marangoni’s managing director, Stefania Valenti. The school obtained a training license two years later, Valenti told Jing Daily.  


Istituto Marangoni’s campus facade in Shenzhen. Photo: Istituto Marangoni

Opening schools in China has been getting harder over the years due to an increasing level of restrictions as a result of bad actors posing as Western schools. They even have a name for them: “wild chicken schools” (a slang for non-accredited institutions). Officially, Beijing labeled these joint ventures “cooperative education programs,” which are defined as educational activities targeting Chinese nationals through subjects, majors, and curriculums. 

Istituto Marangoni dedicated its success in China to a mix of Chinese and Italian faculty members. “Initially, we sent key alumni that have been teaching many years at our historical Milan school campus back to Shanghai,” said Valenti. “Some of them are still in Shanghai today.” With eight global campuses from Europe to Asia, Chinese business media Yicai reported that the school had a 400% increase in revenue between 2011 to 2019. 

One can also gauge the power of cooperation in the case of DeTao Masters Academy. Despite not being founded by a foreign entity, it has been known to bring renowned industry figures to Chinese students. The Advanced Fashion design program is one of the 11 programs DeTao runs in partnership with the Shanghai Institute of Visual Arts, which was set up in 2015 and has been operated by British fashion veterans Jane Gottelier and Patrick Gottelier. Its visiting faculty includes former CSM program director of fashion Willie Walters and celebrated Chinese designer Angel Chen.

Working with the Shanghai Institute of Visual Arts has been a major pillar of DeTao’s success, said Patrick Gottelier. “Without SIVA, I don’t think that we could have survived and thrived independently, and we certainly wouldn’t have been able to comply with every Shanghai education board rule and regulation, which is essential.”

For Marangoni, it sees its education as a means to help the Chinese fashion industry merge with the West. “China is not only the world’s largest fashion market, but it is also the engine that pushes the luxury segment,” said Valenti. “It’s better to scout for local partners to be more connected with the Chinese fashion system.” She disclosed that the school had been looking for more local partners to cooperatively set up double-degree programs at Marangoni schools in Europe and the UK.

Terence Chu, the CEO and founder of APAX Group and an executive advisor for Shanghai Fashion Week, agreed that it’s beneficial for fashion education systems to merge. “With the fashion industry becoming increasingly globalized, it’s a good thing to open fashion schools in China so that local talents, including designers and those who are interested in fashion, can acquire professional training,” he said, citing Marangoni’s training in China as the exemplar of blending Chinese and Western fashion educations.

Chu believes that there will be more campuses from Western fashion schools in China soon, but they might need to modify the curriculum to teach Chinese students more than just design. “Many talents have learned about design and creativity, but they would need a lot more than that to start their own brands,” he said. “A lot of them are not clear about businesses, and they can benefit from professional training such as business management.”

Despite the potential financial return, some top fashion schools are adamant about how this might affect their international students’ experience. “Polimoda will not open subunits in any country,” said Venturi, adding that its decision comes from the fact that the Florentine territory is highly connected to the school’s teaching experience. The Renaissance city houses renowned museums like the Uffizi Gallery and the Palazzo Vecchio, important trade shows such as Pitti Uomo, and is the birthplace of luxury brands like Gucci and Salvatore Ferragamo. “Opening a Polimoda location without giving students these unique experiences would defy our content-driven and human-centered vision,” Venturi said. 

The home of Polimoda, Florence, also houses Gucci’s headquarters and Gucci Museum (pictured). Photo: Gucci’s Website

Ultimately, top fashion schools’ decision to open campuses in China may have less to do with the global pandemic and more to do with their relevant long-term business and branding goals. Some like the New-York-based Parsons School of Design may not have announced a firm plan for China campuses, but it started testing the waters with summer programs alongside local partner CR Land, which is a real estate group. Parsons’ first pre-college summer school in China costs 49,800 yuan ($7,032) for 21 weeks and will take place in Shenzhen next summer, according to a CR Land spokesperson. Parsons did not respond to inquiries for this story.

Li, the CSM third-year student, thinks there’s investor interest in his alma mater, but he doesn’t think the school is enticed, at least for now. “I don’t think my school has any near-future plans to open campuses in China,” he said. “It would first want to ensure its education quality, as our education system is completely different from China’s.”

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New ‘Made in China’ tag is winning the hearts of local millennials

Despite the emergence of so much talent, the main challenge for the China fashion world is dealing with three simple words that for decades have meant inferior rather than fashion-forward: “Made in China”.

In fact, the term Made in China – with all its negative connotations – does not communicate the full picture. Most European fashion brands have a major component (if not all) of their production done in China, proving that quality is not necessarily as compromised as commonly thought. While there may be some subpar production facilities across the nation, China also offers some of the most advanced and dynamic textile factories available in the world.

If there is no lack of innovation, talent and facilities within the country, what is it exactly that fuels Chinese consumers’ love affair with foreign brands? Most of these consumers, who are estimated to spend on average 180 per cent more on fashion from abroad than home-grown brands, will be well-aware that a lot of international branded goods are produced in China.

Heaven Gaia by Xiong Ying, an elegant take on traditional motifs. Photo: Heaven Gaia

Heaven Gaia by Xiong Ying, an elegant take on traditional motifs. Photo: Heaven Gaia

China-born, Central Saint Martin-educated designer Yueqi Qi was trained at the ateliers of Chanel and Givenchy before returning to her homeland to establish her own brand in 2019. Her collection channels beading designs handmade in China.

“I’m confident that the new generation can reinvent the reputation of ‘Made in China’ as a pool of talent like Samuel Guì Yang and myself have learned the skills overseas, and we have faith in what we make,” Qi explains. “Customers usually don’t look at where the product is made but focus on the items overall. Other factors like sustainability could be a decisive factor instead,” she adds.

Luxury consumerism in China is still undergoing a huge transformation, and is yet to be truly defined. To put things in perspective, over half of today’s high-net-worth individuals in China were not of that status five years ago. This has been a common pattern over the past three decades and one that continues to grow. According to research institute McKinsey & Company, this is good news for Chinese designers as local consumers are open to new things as their status and wealth increases.

Chinese designers are not lacking the knowledge and skills it takes to create desirable products, with many, like Qi, having studied or worked for prestigious design schools worldwide. The realisation that a focus on creativity is a better remedy for gaining widespread acclaim rather than focusing on short-term commercial success, is beginning to take root. What could be an even more important step towards creating an authentic connection is to fully embrace the Made in China tag.

Back in 2014, some Chinese designers found a creative way of doing exactly that, by labelling their products as “Proudly Made in China”. Designers such as Guo Pei, Xander Zhou and Samuel Guì Yang have moulded entire collections, and even careers, in an effort to convey this message, and have achieved global success as a result.

Guo Pei’s traditional bridal dress took five years to make using pure gold embroidery thread. Photo: Guo Pei

Guo Pei’s traditional bridal dress took five years to make using pure gold embroidery thread. Photo: Guo Pei

Alongside this creative success, given that nationwide Chinese patriotism is on the rise, it’s likely that young consumers will likely feel increasingly positive towards local brands.

As for China’s Gen-Z nouveau riche, this hope is already a reality. AliResearch, a research institution by Alibaba (which owns the South China Morning Post) found in its Chinese consumer brands research for 2020 that Chinese brands predominate among buyers; for “post-95” consumers, the brands in their shopping trolleys tend to be Huawei and Xiaomi rather than Apple or Nike.

Elsbeth van Paridon, a fashion and urban culture journalist, and founder of The China Temper explains how the “ad nauseam prejudgments” about the Made in China label are “undergoing the ultimate 21st century makeover – with a subversive twist”.

Van Paridon adds that this “unique phenomenon” is rooted in the rise of individualism and self-expression, and that China’s younger generations are “on the prowl for … individual exclusivity”, and while they are looking to separate from previously regulatory norms, they are “not disposing of their upbringing and heritage”.

“What Chinese millennials want from their brands is ‘uniqueness’, humour, a little bit of swag,” Van Paridon continues, and concludes that they “slowly but surely [are] updating their overall fashion acquisition narrative”.

Indeed, younger Chinese consumers are much more fashion-forward than previous generations. Those who will make up the market in coming years are highly educated, well-travelled, and are increasingly gaining familiarity with voicing a sophisticated and edgy fashion sense their parents may not have dreamed of.

“70 per cent of our consumers come from China who are mostly between 20 to 30 years old. There’s a big interest from American and Canada too,” says Qi.

Chinese designers are reimagining what it means to carry the label ‘Made in China’. Illustration: Craig Stephens

Chinese designers are reimagining what it means to carry the label ‘Made in China’. Illustration: Craig Stephens

Going after the same Louis Vuitton bags that everyone else already owns is a thing of the past for young consumers, and there is now an increased emphasis on identity expression, rather than the blind following of trends. This is one of the reasons Louis Vuitton closed three of its domestic stores, including its flagship in Guangzhou, following a tremendous slump in sales. Prada and Burberry have done the same.

Vincent Djen, a fashion industry veteran and commentator, supports these claims. “What I’m seeing now in China is that the younger generation of consumers, the ones born after the 90s, are more willing to buy local brands,” and he attributes this shift to more refined production standards, and branding that resonates well with “younger, more sophisticated consumers”, giving new entrants the upper hand in comparison to the more mainstream European labels.

Djen also notes that the evolving awareness and pride surrounding the “New Made in China” is a result of an overall “product upgrade” across all industries, led by the likes of automobile and tech. This is certainly the case with brands such as Huawei or ZTE, that see more than half of their income derive from overseas.

But how long it will take for this transformation to truly happen in the fashion world? Djen responded, “It will come. Fashion reflects the evolution of society, culture, and art,” noting Japan’s and Korea’s similar momentum over the past three decades. “Take your time and communicate your brand’s story,” Djen advises emerging designers, and adds that this simple effort is what will elevate success, as opposed to “just selling products quickly”.

Younger Chinese consumers are much more fashion-forward than previous generations. Illustration: Craig Stephens

Younger Chinese consumers are much more fashion-forward than previous generations. Illustration: Craig Stephens

As we approach the third financial quarter of what has been a year of havoc across all industries, with luxury fashion a major casualty, a few things are becoming clear. Many fashion brands and retailers are disappearing, creating a more level playing field for new entrants looking to fill the gaps. Throwing on top the fact that global supply chains are still somewhat crippled, this creates a prime opportunity for China’s online business-to-consumer (B2C) platforms to use their strengths, which domestic brands understand well.

In the wake of a fresh wave of patriotism encouraged by China’s prompt response to the Covid-19 pandemic, we are left with a significantly more enabling landscape for emerging talent.

The awakening of the new and refined Made in China may become a reality sooner than we think. When Chinese consumers embrace and encourage home-grown talent, it will only be a matter of time before it ignites a global trend, where the appeal of the rebranded Made in China label will gain recognition for its quality and authenticity, and makeover previous connotations once and for all.

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Capri Holdings Reports Gain in Versace Amid Crisis And China Recovery

Capri Holdings, the fashion group that owns Michael Kors, Versace, and Jimmy Choo, reported its fourth-quarter and full-year results, ending March 28, on Wednesday. Its total revenue for Q4—amid the early devastation brought on by COVID-19—amounted to $1.2 billion dollars, a 11.3 percent drop compared to last year. 

Among the three brands, Versace had the best performance. It reported $213 million, or a 55.5 percent increase in revenue, whereas the Q4 revenue of Michael Kors and Jimmy Choo decreased 18.4 percent and 23 percent, respectively. In the company’s earnings call, CEO John Idol contributed Versace’s strong growth partially to cutting underperforming lines such as Versace Collection and Versus over the last two years.

At the beginning of the COVID-19 crisis in late January, Capri quickly decided to cancel production going into China and reshifted it to other parts of the world, Idol said. “To some degree, that’s holding us back a little bit right now in China, because now we’re slightly low on inventory there,” adding that Capri also reduced inventories for fall and holiday lines.  

The company has begun to resume store operations globally. Currently, 98 percent of their 500 stores in Asia and 316 stores in Europe, the Middle East, and Africa (EMEA) are open, with the open rate in the Americas at about 70 percent, the financial statement shows

Capri has made the most reopening progress in mainland China, where stores have been now open for several months, while outside Greater China continues to catch up at a slower pace. “This is due to two factors. First, in Japan, the retail store closure and reopening process occurred several months later than in China,” said Idol. “The second factor impacting Asia outside of China is the decline in tourism.”

While being confident about the long-term recovery, Capri’s first quarter of 2021 doesn’t look very bright. During Q1, ranging from April to June 2020, nearly 55 percent of its stores were closed versus 10 percent in Q4, hence an expected dip of about 70 percent during this time period, Idol disclosed. As one of the first fashion companies to give such insight for the upcoming quarter, fashion investors might need to hold the handrails for an even bumpier ride ahead. 

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WeChat’s Change Of Mind: Why Did It Add “Like” Back?

What Happened:

Since 2012, for brands that have a presence in China, WeChat articles have become an ubiquitous tool to engage with potential customers.

But the super app decided to take away “Like” at the bottom of articles last August and replaced it with “Wow,” which pushes the articles to a separate section called “Top Stories” (看一看). The section includes two tabs: “Your Friends Are Reading” and AI-driven “Select.” As of this week, WeChat’s 1.2 billion monthly active users can once again see “Like” next to “Wow,” as well as a new “Share” button, all within the same swipe.

The latest WeChat edition lets users share, like or recommend articles to their WeChat friends. Photo: Screenshots

Adding it back makes sense, said Regional Account Director Yangyan Luo at UK-based digital marketing agency Croud. “WeChat created ‘Wow’ to build a content distribution system because they wanted more people to read articles, so in theory, the articles would get more impressions,” she said. But users prefer to use “Like” because it’s a universal concept that’s also seen on other platforms like Weibo, Zhihu, and Douyin, she added.    

Jing Take:

Creating a new feature, or removing a popular feature, on an established social platform is always a risky move, as WeChat discovered. It took WeChat almost a year to realize that their massive user-base loved the “Like” button. It now finds going with the flow easier than creating its own rules.  

From the users’ perspective, clicking “Wow” might carry more emotional baggage than “Like” because a prompt will follow to ask you to write a comment, and then your friends and families will know what you are reading. For brands, however, bringing back the “Like” button helps them better measure engagement, though they need to stay alert with fake “Likes” while working with KOLs or MCNs, which remains a problem on any platform.

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.

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