Coach Hopes Third Time is a Charm on Tmall

Following high-profile openings (and closings) in 2011 and 2015, Coach hopes the third time is a charm on Alibaba’s Tmall marketplace. Long-time Jing Daily readers will remember Coach’s initial foray on Tmall, which was launched to great fanfare and closed with a whimper less than eight weeks later after disagreements about a “counterfeit crackdown arrangement,” as WWD put it.

Coach’s second launch on Tmall ended in 2016, when the company announced it would go the route of instead building a dedicated shopping channel on WeChat. As Jing Daily wrote at the time, the move was also part of a trend of brands approaching Tmall warily, amid concerns of the platform appearing too mass-market.

The third shot at Tmall comes as Coach owner Tapestry Inc. has indicated a renewed priority on the China market. As Tapestry Chairman and CEO Jide Zeitlin recently put it,“Tapestry is committed to the Chinese market.”

Set to kick off in December 2019, Coach’s third Tmall launch will be part of a promotional push on the platform’s luxury and premium channel, Tmall Luxury Pavilion. This follows a similar launch last October by Tapestry-owned footwear brand Stuart Weitzman, and precedes the launch planned by Kate Spade in early 2020.

According to Tapestry, Coach and Kate Spade will be among the first brands to use the newly upgraded format on Tmall’s new “Flagship Store 2.0.” As Noam Paransky, chief digital officer at Tapestry, noted, the third partnership with Tmall is an attempt to connect with a broader audience and, presumably, collect important customer data.“We are committed to offering a compelling experience for Chinese consumers wherever they choose to shop: our stores, direct brand and third-party websites or social platforms.”

Tapestry’s Tmall plans haven’t been a secret, having initially been announced earlier this year. But with a new CEO in place and a litany of challenges facing Coach in particular with regard to the Chinese consumer, ranging from Hong Kong unrest to a weaker yuan, a drop in Chinese tourist arrivals in the US, and general global economic uncertainty — the move comes just in time for Tapestry to kick off a renewed domestic push to encourage more shopping within mainland China.

Now, the question for Tapestry is whether Tmall — or consumer perceptions of Tmall — has evolved enough since 2011 to make it the kind of place Coach, Stuart Weitzman, or Kate Spade want to be as brands. From Tmall’s perspective, having these brands launch on a new luxury-focused channel should address Coach’s concerns from 2015-2016, and presumably — owing to the current uncertain state of the luxury market and importance of the China market — Tapestry may want to stick around for more than a year this time around.

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How Niche Western Brands are Accidentally Gaining China Market Share

GANNI, a Danish mid-market contemporary label, has risen to prominence in the past decade thanks to its cult Instagram following of swipe-happy “cool girls.” The brand now leverages a following of over 600k and turns over an estimated $100 million in sales. GANNI’s success is the result of a tight strategy that includes its effortlessly hip Scandinavian style, sweet-spot pricing, and successful efforts to sustain the brand’s exclusivity. What has not been part of the brand’s strategy, however, was accidentally gaining a following in the Chinese niche market.

GANNI does not have an official presence in China, nor an official Weibo or WeChat account and does not ship directly to China. Yet, the brand has recently made huge waves among Chinese consumers via the Internet. Chinese fans tout GANNI as a niche brand that hails from Copenhagen and view it as a sophisticated, insider alternative to larger name brands. At the time of publishing, GANNI had over 1,600 mentions on RED and a long stream of organic content on WeChat. Appropriately, when asked for a comment for this story, GANNI politely declined as the brand is not yet working in Asia.

GANNI is not alone when it comes to sought-after “Instagram brands” gaining unexpected exposure in China without putting any direct effort into advertising or marketing in the region. A similar crossover happened with Réalisation Par, an Australian brand also with zero official presence in China. While major Western brands are spending serious dollars to gain exposure in China, how are these niche brands accidentally gaining a foothold in this lucrative market?

The Main Drivers of China’s Sharing Frenzy

The rise of niche brands in China highlights the power of information transfer across social media. Outside of mainland China, fashion trends can easily spread from country to country. For China, however, it’s more complex.

Instagram, like most major Western social media platforms, is blocked by a firewall in China. Thus, the crossover of information, such as fashion trends, is largely driven by Chinese netizens who are not only passionate about sharing.

Clay Shirky, an American writer, consultant, and teacher on the social and economic effects of Internet technology, categorizes these sharing-frenzy Chinese netizens into two groups — extrinsic and intrinsic.

Chinese KOLs and influencers help spread fashion trends by sharing their unsponsored fashion recommendations on Chinese social media. They are motivated by what Shirky calls extrinsic motivation, which points to concrete things like monetary rewards that are measurable without a social context. Their fashion recommendations strengthens their personal style and unique taste, which in turn helps them to gain followers’ loyalty, traffic, and potential brand sponsorships.

However, there is another group of sophisticated Chinese consumers, most of whom have extensive overseas travel experience, and have access to first-hand fashion information through Instagram. They are well-informed by the Western media and thrive on being fashion-forward. They are also well-connected and active on Chinese social media channels at the same time, and enjoy sharing their lives, their fashion styles, and their way of living via Chinese social media without really expecting anything in return.

“Sharing my fashion styles and preference on Chinese social media is the same thing as sharing my life,” a Chinese Gen-Z consumer who follows Instagram trends closely commented. “I want more people to know about these niche brands and sharing then helps the recognition of these brands in China.” This group of consumers is motivated by what Shirky calls intrinsic motivation, which points to the reward from something about a person and a person’s world, such as “showing one’s taste” and “feel like helping one’s friends.”

While a KOLs’ motivation is easy to understand from a business standpoint, the drive behind a regular Chinese person’s desire to share something like a niche fashion brand are in fact not as philanthropic as it would first seem. In fact, the calculation for intrinsic motivation is more obscured and happens unconsciously. “Intrinsic motivation is never pure. It’s always in a social context. People are collecting something, but it’s just not like money,” Shirky says. “For example, one may calculate the positive feedback from friends, and such is an example of the calculation of the reward from intrinsic motivation.” Intrinsic motivation prompts this group to share new information on fashion trends as they benefit from this action internally.

In China, The Power of Niche

The calculation of intrinsic motivation becomes most obvious when considering the type of brands Chinese netizens like to share. They tend to avoid the big name bands and instead turn their sights to niche brands and less recognized products. According to the McKinsey China Luxury Report 2019, “The concept of a niche brand has multiple meanings across luxury segments, from one that exhibits unique design to those that are niche in the sense of being rarely seen on the street, or simply not available in mainland China.” While the definition of a niche brand for Chinese consumers is quite subjective and depends on the consumer’s level of sophistication, the general sentiment is that labeling something as “niche” makes the brand, or product, feel more premier (“高级”), which is the new equivalent of “premium” and “bespoke.”

“I personally think that niche brands are very premier. They are the opposite of mainstream, and I love the statement of freeing myself from the mainstream by wearing and supporting niche brands,” says a Chinese Gen-Z consumer, who gets most fashion ideas from Instagram and overseas fashion icons.

The restricted nature of information on platforms like Instagram ultimately feeds into this newfound power of “niche.” Consequently, if a brand does not have a presence in China, it can become more appealing to consumers who want to access to what they think of as “new information.” And with a rapidly growing middle class in China, more and more of the population is looking to information to help them advance, which only increases the power of “discovered” brands like GANNI. “Everyone instinctively wants to be in a position to share new information,” Shirky says. “This creates value for a person as they want to go up on the ladder.”

Ultimately, tapping into this information becomes integral to a person’s identity, in a way that is unfamiliar to other markets. “What’s unique to China’s case today is that information sharing is highly related to identity formation, unlike anywhere else in the world,” adds Shirky.

For fashion in China, the ubiquity of well-known brands and the growing fatigue for mainstream aesthetic (“大众审美”) has opened the door for the transmitting this new type of fashion information, which speaks to a Chinese person’s psychological need for self-differentiation and individuality. For the lucky brands, niche or otherwise, it’s resulted in accidental attention from fashion’s most sought after market, the Chinese consumer.

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The Danger for Luxury Brands That Fail at Storytelling

Luxury brands should count their blessings. Compared to the fast-moving consumer goods (FMCG) segment, which has been suffering negative, flat, or low single-digit growth rates, the luxury market has been outperforming non-luxury sectors for nearly two decades now, growing at a high single-digit growth rate globally — with China’s growth rate projected to be around an astounding 20% — and by far eclipsing all other areas.

Still, there are some luxury brand executives and managers not toasting their great successes. In China, for example, many Western brands continue to lose money or underperform versus their expectations. It’s an uncomfortable truth that almost no one will openly admit, but behind the scenes, many managers are wracking their brains on how to fix this.

And the struggle goes far beyond China. Except for a few very successful brands, like Chanel, Gucci, Dior, or Louis Vuitton, many luxury brands have not realized their full potential. They are either not growing as fast as their peers, or they lack profitability, or both.

What about your brand? Is your brand developing a more luxurious proposition? If not, one of the biggest hidden dangers that can destroy luxury brands is not telling their story correctly. What does it mean? Luxury brands need to be crystal clear about their core positioning and what makes them different from other brands. And they need to be able to communicate this throughout the customer journey.

In our brand audits, we rarely find a brand that is defined precisely enough. This mistake — brands speaking about themselves without translating this message into a tangible consumer benefit — is a common one. Example: Many luxury brands talk about craftsmanship, experience, design, bespoke and exceptional service. Sounds great, but it’s  too vague. Instead, they need to tell their customers what unique value they create specifically for them by the things they do exceptionally well.

In luxury, it’s about them (customer-centricity), not us (internal capabilities). Exceptional craftsmanship only creates value if there is a perceivable distinction between other luxury brands, and if this distinction can be expressed as a value proposition towards the customer. When we help clients to create new brands or sharpen and turnaround existing brands, we always define the brand’s value proposition from the customer perspective. Especially for Millennials and Gen Zers consumers who expect this the most.

To create a value proposition, brands need to provide a rational and an emotional benefit. Both are important and need to be a consistent part of the brand story. Few brands, however, have clarity around their emotional core, their purpose, and the way how they inspire their customers. What I often see is that they express, as their emotional positioning, the creation of dreams. The problem with this is: Unless the dream is explicitly defined, it seldom will create any customer value, and it won’t differentiate the brand. More precision is needed.

As a result, we typically find brands that are talking to themselves about themselves and in an imprecise way, and not differentiating enough from their competitors. Not surprisingly, a Chinese executive of a leading European fashion brand told me recently that, “We all do the same thing. All brands seem to do exactly what everyone else is doing.” Clearly, this is not the path to create a sustainable competitive advantage and it explains why so many luxury brands struggle. Notably, in China, where Millennials and Gen Zers are so brand-obsessed, they expect a clear and meaningful brand story even more than in the Western world. Missing the mark is just another of many possible reasons why so many Western brands can fail in this market.

The next hidden danger luxury brands face is that of losing further precision of the story along the customer journey. There are very few brands that can tell their brand story consistently at each touchpoint. When you think about staying at a hotel, the customer journey is predictable. Few unexpected things happen. This is why so many experiences become a “category experience” instead of a “brand experience.” This destroys value and weakens brands. The emotional experience depends on the quality and training of the sales staff, and it needs to be specific.

Additionally, many brands have insufficient digital tools to support the sales staff with specific customer insights and to create personalized digital customer journeys. A proper digital support infrastructure is no longer optional anymore in today’s world — it’s a must.

When brands get it right, they can create extreme value. This allows them to price for it, and to develop further the luxuriousness in the category in which they play. The value is created through the brand and its story. Products are part of the brand’s value delivery system; they don’t create the added luxury value by themselves. The brand does. This is why it is so dangerous not to tell the story well. The importance of optimizing your brand’s story and its delivery cannot be stressed enough and are significant opportunities and upsides for revenue and profit growth. On the flip side, underestimating the importance of properly telling your brand story in an excellent way has destroyed many brands.

Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a regular keynote speaker, and holds management seminars in Europe, the USA, and Asia. Follow @drlanger

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Retailers Fret As Chinese Students Cool on U.S. Schools

The ongoing U.S.-China trade dispute is claiming more victims in the form of U.S. universities and retailers who have, in recent years, come to depend on big-spending Chinese international tourists and students. As of the 2017-2018 academic year, U.S. universities had more than 360,000 Chinese international students, a demographic that contributed an estimated $13.9 billion to the U.S. economy.

The buying power of Chinese students has been very keenly noticed for years in places like Los Angeles — where Chinese students are actively courted on- and offline. But it’s perhaps even more crucial elsewhere. According to Quartz, “certain states rely on China for students much more than others. In July 2018, forty-two percent of international students in Vermont were from China, followed by 40% for both Wisconsin and Oregon.”

As Sixth Tone recently noted, it’s likely that universities in these states will see these numbers dwindle in semesters to come if the dispute continues. This June, China’s Ministry of Education “warned its students and scholars planning to study in the U.S. about unexplained delays or outright rejections during the visa application process,” and recent rejections and deportations of Chinese students in the U.S. have been highly publicized in the Chinese press.

There are signs that these stories, along with regular coverage of mass shootings and violence, are causing America as an aspirational destination for university study to take a hit in China. A survey earlier this year indicated that the number of Chinese students who see the U.S. as their top choice to study abroad has dropped to 43 percent — down from 49 percent two years ago.

This is bad news for universities, which spend heavily on international recruitment efforts to increase tuition revenue and make up for fewer domestic applicants. To combat any decrease in Chinese student enrollments, one university took a creative approach. Two years ago, according to NBC, the University of Illinois’s Gies College of Business and its Grainger College of Engineering “took out an insurance policy… to protect the schools from a possible drop in revenue from Chinese students.”

The three-year policy — believed to be the first of its kind — is creatively structured, NBC notes: “The colleges together pay $424,000 a year in premiums. It’s triggered if the two schools have a combined revenue decline of at least 18.5% from a loss in Chinese students. The payout is proportional to the decline — so if there is a 20% decline in Chinese-student revenue, the insurance payout would be about $12 million. If the numbers fall by half, the payout is about $30 million.”

As Jeffrey Brown, the dean of the Gies College of Business, said, “It’s given every school a bit of a wake-up call that the flow of students from China is not something we should take for granted or should count on.”

It remains to be seen whether other schools will follow suit — particularly those that depend the most on Chinese students. For those outside of academia, the unfortunate reality is that they’ll be unable to have similar policies for a drop in customers. This means it’ll be even more important for brands to beef up their digital marketing efforts both to existing and prospective Chinese international students in the U.S.

This means the timing couldn’t be more perfect for recent shows like “Over the Sea I Come to You,” which follows the lives of several parents who accompany their teenage children to attend college in the U.S. The show has already racked up numerous brand integrations from the likes of Coca-Cola and GE, but it’s feasible that we may see more U.S.-centric brands and retailers look to infuse themselves in this type of show and keep themselves top-of-mind for Chinese consumer if the U.S.-China trade dispute lingers on and impacts student and tourist arrivals for another quarter.

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Chinese Whispers: Louis Vuitton to Hire More Staff to Meet Demand in China & More

In “Chinese Whispers,” we share the biggest news stories about the luxury industry in China that have yet to make it into the English language. In this week’s edition, we discuss:

  • Louis Vuitton to hire additional 1,500 employees to meet strong demand in China
  • Top 50 most influential KOLs in China by Forbes
  • Chinese supermodel Liu Wen absent from global fashion week this year

Louis Vuitton to hire additional 1,500 employees to meet strong demand in China – Sina 
In order to meet the demand in China, Louis Vuitton will add 1,500 new manufacturing positions in Paris, in the next three years. Although Louis Vuitton already has factories in Italy, Spain, and the U.S., its CEO, Michael Burke, made it clear that the brand will still keep most of the supply-demand chain in France. So far Louis Vuitton has 16 leather good making factories with about 4,300 full-time staffers.

Top 50 most influential KOLs in China by ForbesForbes China 

On September 5, Forbes published their latest rankings on the most influential KOLs in various industries — beauty, fashion, maternal, lifestyle, and e-sports. A dark horse KOL in beauty is Li Jiaqi, who quickly claimed top beauty KOL spot. He is best known as a lipstick expert, and by the end of June his followers on Douyin and Little Red Book exceeded 26 million and 5.8 million. In the fashion category, Becky Li dominated the rank. One of her highlights was her collaboration with Secoo, in April, named Becky’s Choice, a pop-up event recreating her closet for fans to shop. Sales grew to 20 million USD within 15 days. Other KOLs listed in fashion included Shiliupo’s report, Mr.Bags, Taobao livestreamer, Weiya, Xu Fengli, gogoboi, Zhang Day, Xu Yan (深夜徐老师), Zhang Xinwen and Zhang Xinxin(原来是西门大嫂).

Chinese supermodel Liu Wen is absent from global fashion week this year – Fashion Business Daily 

Chinese netizens buzzed about Chinese supermodel Liu Wen’s absence from the 2020 Spring and Summer fashion shows. It’s the first time she’s missed the shows since 2008. Liu Wen made headlines after stepping down as Coach’s ambassador after the brand’s involvement with the T-shirt controversy. Moreover, it seems her career peaked after she walked for luxury brands Chanel, Dior, Bulgari, Loewe, and more. She was also the first Asian Victoria Secret angel. In the global Model Salary report for 2017, Liu Wen ranked No.8 with an annual salary of $6,500,000, and she has kept a positive public image in China with devoted fans on social media: 24,610,000 followers on Weibo, and 4,900,000 on Instagram.

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Animal Testing for Imported Cosmetics

This post originally appeared on Azoya, our content partner site.

China is expected to have the world’s largest retail market by year-end, but many major beauty brands have refused to sell in the market due to the country’s outdated animal testing requirements.

Now things are changing and the government is easing some of its requirements.

Here’s what’s going on and what it could mean for foreign beauty brands.

Why is Animal Testing Required in China?
It is estimated that over 300,000 rabbits, mice, and other animals are used each year in animal testing labs in China – accounting for more than half of the 500,000 animals used worldwide each year.

In many cases, animals are forced to swallow toxic ingredients or have them dripped onto sensitive skin parts such as their eyes.

Animal testing is required in China because there are many instances of shoddy-quality and fake cosmetics products, particularly when it comes to imported goods that can be marked up at a higher margin.

The United Kingdom banned animal testing for cosmetics products in 1998, and many countries in the western world have followed suit. Now, testing labs use artificial skin or human cells, and oftentimes they are more precise.

So why hasn’t animal testing been banned in China yet?

1. Animal testing generates jobs and revenues – brands have to pay animal testing labs, who employ large numbers of technicians.

2. Investing in testing R&D costs money. China’s testing labs also operate in a highly fragmented, low-margin industry, which makes it difficult to invest in R&D for new testing procedures. Labs need to spend time and money on training and certifications before having new procedures approved by the Chinese Food and Drug Administration.

3. There is less consumer awareness of animal cruelty. And in some cases, consumers would rather have the products be tested on animals than themselves. This is partly because there have been many cases of faulty, harmful, and fake cosmetics products in China. There is not much pressure on the Chinese government to enact anti-animal cruelty laws.

This is What Happens When Brands Do Animal Testing
In many cases, brands have to decide whether they want to engage in animal testing in China, or avoid the market entirely. Big players such as L’Oreal, Estee Lauder, Procter & Gamble, etc. conduct animal testing on its imported products.

But these large players have moved some of their manufacturing to China, and some products such as shampoo and body wash do not have to undergo animal testing to be sold.

NARS Cosmetics was boycotted by many fans worldwide after it announced that it would engage in animal testing to sell products in the China market. Fans launched protests all around the world to express their disappointment.

NARS was previously seen as a cruelty-free brand and was popular amongst consumers because of its stance against animal testing.

M.A.C, which is owned by Estee Lauder, has also been called out for animal testing. However, Estee Lauder is training the testing lab industry on new forms of non-animal testing, and lobbying key stakeholders on changing the industry conditions. They claim that their large presence in the market gives them the influence needed to change the industry.

What’s New This Year?
In March 2019, China’s Gansu Province National medical products Association announced that post-market testing for finished imported and domestically produced cosmetics in China will not include animal testing. This means that after products hit the market, they will not be subject to additional tests.

In April 2019, China approved two new non-animal testing methods for the regulation of cosmetics ingredients. Now China has nine approved animal-free tests.

Such tests apply for cosmetics ingredients but not final formulations. China still requires foreign cosmetics companies to consent to have their products tested on animals.

In May, the government was debating the passage of The Administrative Measures for the Filing of Non-Special Use Cosmetics. It could allow imported shampoo and lipstick to avoid animal testing, as the measure would bring the regulation of imported non-special use cosmetics in line with domestically made Chinese products.

The Road Ahead
Animal testing is bound to be a contentious issue going forward. While the government is making efforts to move away from animal testing, it will take some time to get the technology and awareness up to speed.

In the meantime, brands can consider selling to the China market through cross-border e-commerce, a direct-to-consumer trade channel that does not require animal testing. Brands can ship from overseas warehouses, Hong Kong warehouses, or bonded warehouses in China free trade zones.

This channel is still relatively small and many brands are unaware of this option. But it is becoming a more and more popular channel as China’s e-commerce law cracks down on daigou resellers.

The government is encouraging more foreign brands to sell to Chinese consumers on cross-border e-commerce channels such as Tmall Global, as indicated in its recent lowering of postal import taxes.

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Despite Trade War, Ralph Lauren Gains Momentum in China

With only an eight-year official presence in mainland China — opening its first stores there in 2011 — Ralph Lauren is both a relative newcomer and a well-established brand among Chinese consumers. Having developed strong name recognition initially via trips to Hong Kong taken by mainland businesspeople and tourists in the 1980s and ‘90s, for the past two decades the brand has been hit hard by the counterfeit trade, with the Chinese market flooded with fake Polo shirts and knockoff brands.

But a stronger on-the-ground presence, centered around its hundreds of stockists throughout Greater China along with its Ralph’s Coffee location in Hong Kong, and massive investment in digital marketing and e-commerce is showing signs of paying off. This week, it was reported that Asia remains the fastest-growing division for Ralph Lauren, with China accounting for the majority of the region’s growth.

For FY2019, China represented roughly 30 percent of the revenue growth in the Asia segment, and was a major focus for new store openings. Of the 94 Ralph Lauren stores opened in Asia in FY2019, 39 were in China. Analysts expect this trend to continue in FY2020, driven by the launch of the directly owned Ralph Lauren e-commerce site last year, which is poised to benefit as the online apparel market in Asia reaches an estimated $1.4 trillion in 2020.

As Jing Daily wrote last year, Ralph Lauren is aiming to reach $500 million in revenue in five years from the Greater China market. And this is very much possible — despite its massive physical and online presence in China and draw among Chinese tourist-shoppers (particularly at outlet malls in Europe and North America), China currently only accounts for around 3.5 percent of Ralph Lauren’s global business.

Despite all of this growth, the ceiling is nowhere near in sight, provided the Ralph Lauren brand doesn’t get caught up in the same issues ensnaring other foreign brands in China in recent months. The main area in which China remains a liability for Ralph Lauren has nothing to do with Chinese consumers, but rather the ongoing U.S.-China trade war and greater cost of importing China-made items, as NBC recently noted.

Trump’s latest round of China tariffs predominantly affect consumer goods companies as the duties cover clothing and electronics. Those affected companies with exposure to Chinese imports include Ralph Lauren, Whirlpool, HP and Under Armour, according to a J.P. Morgan analysis last week. Ralph Lauren and Whirlpool both dropped more than 3%.

However, if the trade dispute somehow manages to be resolved quickly, strength in the Asia division might help make up for continued challenges in Ralph Lauren’s home market of the U.S. But the brand’s North America division must grapple with much more than just higher tariffs digging into profits. Another major concern for China-watchers is fewer Chinese tourist arrivals and the possibility of a decrease in Chinese international students coming to the U.S. in the months ahead. Already, retailers have seen a plunge in Chinese tourist spending after years of red-hot growth. According to the National Travel and Tourism Office, travel from China to the U.S. dropped nearly 6 percent in 2018, the first such drop in 15 years, and the first half of this year saw a 5.3 percent drop compared to the same period in 2018. Business travelers were more or less flat in the same period, and students saw a mild increase.

Now, the question will be whether Chinese consumer sentiment towards the U.S. — and, by extension, U.S. brands — will impact Ralph Lauren’s gains in that market.

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Luxury Mooncake Gift Boxes: Winners & Losers

Who says no to a tasty cake delivered in a gorgeous gift box? The correct answer: no one. On the eve of the Mid-Autumn Festival, which is celebrated on September 13 this year, many Western luxury brands have created their own specially designed mooncake gift boxes for valued customers and business associates. As part of their globalization strategies, brands are increasingly paying more attention to local holidays, like the Mid-Autumn Festival, especially those heavily reliant on the lucrative Chinese market.

The Mid-Autumn Festival originated as an East Asian festival mainly for Chinese and Vietnamese populations to celebrate the harvest. It’s a time for families and friends to gather together, under the light of the full moon, to give thanks for the harvest or harmonious unions. Corresponding with this, a round, rich pastry filled with various pastes — red bean and lotus seed are the most common ones — named ‘mooncakes’ are baked and enjoyed.

Today, the Mid-Autumn Festival has transformed from a regional holiday to a world-recognized festival and eating mooncakes remains the most rooted tradition. Luxury brands have smartly adopted this tradition to not only show their fashion acumen through their elaborately designed mooncake gift boxes, but also to connect with the wider world and their traditions.

Here we review the efforts of seven luxury brand’s mooncake gift boxes in terms of  brand specialty, cultural interpretation, and how they taste.


Photo: Courtesy of Fendi


Fendi’s mooncake gift box ranks first in creativity and cultural interpretation, as the brand’s design reminds us of three Chinese traditional crafts, which they’ve cleverly combined rather than separated. The shape of the box looks like a sophisticated lunch box used in Forbidden City in ancient times. It includes a light, which when you turn it on, transforms the box into a lantern (one of the ancient lighting tools). It also contains a transparent rotatable ‘Pingfeng,’ an item of Chinese classical furniture used to block the wind or sight. In terms of brand specialty, Fendi has printed their logo on the outside of the gift box and on each mooncake housed inside it. As for taste, the mooncakes reflect both the traditional Chinese culture along with a more modern Western approach. One is filled  with red wine cranberry (Western); another is filled with egg yolk lotus (traditional). Overall, Fendi’s identity echoes the theme of Mid-Autumn Festival throughout, making it an elegant, versatile, and tasty gift box.


Courtesy of Mr. Bags


Dior’s mooncake gift box may be the most romantic one. When opening both sides of the box, a Chinese folding fan opens as well, revealing an aromatherapy candle and eightmooncakes. The box is colored midnight blue and dotted with gold stars and Christian Dior’s signature, with each mooncake stamped with an individual letter, spelling Dior. The presentation makes for an elegant and rather romantic approach to celebrating the Mid-Autumn Night.

Louis Vuitton

Photo: Courtesy of Louis Vuitton

Louis Vuitton

This year, Louis Vuitton took us back to our childhood with their striking orange and navy blue colored gift box. Inside, there’s a playful blue hot air balloon floating in the ‘lucky clouds’ (a symbol of best wishes in China). The balloon itself is hollow and decorated with LV’s classic four-leaf clover logo. But unlike other brands, Louis Vuitton skips including mooncakes and instead offers five different-color chocolates, which is yet another surprise for this inviting, inventive gift box.


Courtesy of Tiffany

Tiffany & Co.

Tiffany & Co.’s mooncake gift box is inspired by the art of Chinese paper cutting. They applied two layers of hollow carved paper boxes to recreate the famous windows of Tiffany’s headquarters on 727 Fifth Avenue, but what really ties it together with Chinese traditional culture is what happens when you turn on the light on the bottom of the box — the entire gift box turns into a traditional Chinese folkcraft lantern. As for the mooncakes, they’re tucked away in Tiffany blue boxes. Another thing we really liked about Tiffany’s approach was that it was practical. Once you’ve finished your mooncakes, the box itself can be used as a stylish table lamp.


Courtesy of Prada


Prada went with an entirely different approach, creating a circular gift box printed in their popular banana print. Once opened, six mooncakes were arranged in a circle, expressing the meaning of reunion perfectly, which is the main point of the Mid-Autumn Festival. Though it was less ornate than the other gift boxes, we thought Prada did a great job of staying on brand while also capturing the meaning of the festival.


Courtesy of Mr. Bags


Gucci produced probably the most expensive mooncake gift box this year, but still lost the battle because of a lack of cultural resonance. Gucci’s mooncakes come in a heavy red suitcase, with six mooncakes housed in six tin boxes, each decorated with a different Gucci pattern, and finally, they’ve included a portable chess set on the left side of the box. The problem with Gucci’s design, apart from the mooncakes themselves, is that there’s very little related to the Mid-Autumn Festival. To be sure, Gucci nailed it on brand identity but forgot about the cultural aspect of the festival. 


Courtesy of Mr. Bags


Burberry’s 2019 Chinese New Year campaign proved to be a total failure because of their cultural misreading. Sadly, the brand seems to have learned little from their past mistake. The outer box is coated entirely with Burberry logos, and the four mooncakes inside, each in a small box, are simply printed with two letters each, spelling Burberry’s. Maybe it took a perfect score in the brand specialty, but in terms of cultural interpretation, Burberry turned in a disappointing answer.

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Amazon vs. Alibaba: Everything You Need to Know About the Two Biggest E-tailers

The e-commerce market is growing globally, but in China, the expansion is even more remarkable. Motivated by low prices and convenience, Chinese buyers have fully embraced online shopping in a country where Alibaba, Amazon, JD, and Zalando are the big players. Yet the focus is often on the world’s two largest e-tailers, Alibaba and Amazon. The media likes to present these two as rival contenders engaged in a global showdown, but the reality is far more complex, and Amazon and Alibaba are actually quite different. Each has unique features and employs different business models, so it’s important to understand their similarities, differences, and what really makes them tick.

Alibaba “accounts for more than 80% of all online purchases in China,” says Andrew Youderian from eCommerceFuel, and the Harvard Business Review exclaimed in September 2014 that the Chinese multinational company took the stock exchange by storm with the world’s biggest IPO. Given that Alibaba’s business model most closely resembles the eBay model (in which the Alibaba Group acts as a middleman encouraging transactions between seller and customer), these are impressive accomplishments.

Ming Zeng, Alibaba’s Chief Strategy Officer told the Harvard Business Review that “as technology advanced, more business functions moved online… And as we expanded our ecosystem to accommodate these innovations, we helped create new types of online businesses, completely reinventing China’s retail sector along the way.” Zeng is right when he says that Alibaba Group is reimagining China’s retail sector. In fact, everything that Jack Ma’s system does, from the use of analytics and modern technologies to the expansion of the brick-and-mortar stores, is consistently putting the group ahead of Amazon.

In retail, Alibaba’s crown jewel is Taobao: an e-commerce site available only in Chinese that is the world’s biggest online commerce company. According to Alibaba Group’s September Quarter 2018 Results, Taobao was home to 666 million monthly active users, with the number of annual active consumers reaching 601 million for the 12 months ending on September 30, 2018. Taobao operates as a fee-free marketplace (meaning that neither sellers nor buyers pay fees for completed transactions), although sellers who want to rank higher on Taobao’s search engine can pay a fee for better placement and advertising. As a general rule, Taobao is for small-to-medium sized online shops, but Alibaba also operates the site Tmall (formerly Taobao Mall), which is an e-commerce store for large international and domestic brands.

Tmall is an excellent platform for Chinese consumers who want to access international brands. In 2011, the company began a major restructuring strategy that created an uproar in China. China Law Insight reported that Tmall “suffered from a stormy protest from small vendors against its new rules,” and at the time, they mentioned that “antitrust concerns arise in relation to its suspected abuse of dominance in the e-commerce industry.”

The protests began because of the new merchant rules that ballooned the annual technical support fee and security deposits from vendors on Tmall. According to China Law Insight, under the new regulations, the annual technical support fee grew from 6,000 RMB in 2011 to 30,000 RMB and then to 60,000 RMB in 2012 (depending on the size of the B2C store). Additionally, the security deposit increased from 10,000 RMB in 2011 to 50,000 RMB and then to 150,000 RMB in 2012 (again, depending on the store size). The reality is that Tmall had to tighten its rules to increase profit margins and gradually curtail sales of counterfeit goods.

In a press conference organized by Alibaba Group on October 17, 2011, Jack Ma said, “Several governmental departments are taking joint actions to combat online infringements. China’s e-commerce keeps on growing as well. If we do not take any measures to quiet down counterfeits now, it will be hard for China’s e-commerce to achieve further development.”

Tmall matured along with the Chinese market, and today, a variety of established brands operate on the platform (e.g., Motorola, Nike, etc.), and it now has a strategic advantage over the competition because it shares consumers between Tmall and Taobao. With 20,000+ international brands and 4,000+ categories, Tmall Global is now focusing on helping international businesses expand into the Chinese market. In November 2018, “Alibaba pledged to bring $200 billion worth of international goods into China over the next five years through its platforms.” Moreover, through the Centralized Import Procurement (CIP) and Tmall Overseas Fulfillment (TOF) initiatives, Tmall Global hopes to speed up the entry of international brands into China.

Besides e-commerce sites, Alibaba Group also established Alipay: a mobile and online payment system that was initially created to protect buyers from abusive acts and practices from online sellers. Today, Alipay “has over 700 million annual active users — an increase of more than 200 million year on year,” according to Eric Jing, Ant Financial’s executive chairman and CEO.

Meanwhile, the American tech company Amazon just surpassed Walmart as the largest retailer in the world, and the number of Americans subscribed to Amazon Prime reached 100 million in 2019, mostly thanks to the consolidation of the company’s annual membership benefits. These impressive accomplishments are likely why experts want to see Amazon as Alibaba’s direct competition, but despite their equally stratospheric growth, the two platforms operate different growth engines and business models. The biggest difference is that Alibaba operates more as a middleman that connects consumers to sellers while Amazon manages two separate programs: Amazon Vendor Central and Amazon Seller Central, with the latter transforming the seller either into a third-party or first-party partner.

Through the invite-only program named Amazon Vendor Central, sellers grant Amazon ownership of their inventory which will later be advertised and sold directly from the e-commerce platform. In other words, Amazon buys merchandise at a wholesale price from the seller and then sets a higher price before selling it to the consumer. Through the Amazon Seller Central program, sellers maintain full control of their inventory while Amazon operates as the middleman between seller and buyer.

By stocking products and creating an inventory, Amazon is forced to operate warehouses, which comes with exorbitant costs and logistically complex operations. In contrast, Alibaba doesn’t have these issues, letting it achieve higher operating margins. Apart from the separate programs that give sellers more flexibility, Amazon also wins points with American consumers because of its subscription-based business model known as Amazon Prime. The Prime account charges customers recurring fees and offers access to services and products like same-day shipping, free streaming movies and music, and more.

Additionally, the U.S.-based company operates a digital wallet platform: Amazon Pay. However, the mobile wallet is struggling to achieve market success and still isn’t a serious competitor to Alipay. But, in a 2016 interview with PYMNTS‘ Karen Webster, Amazon’s VP of External Payments, Patrick Gauthier, said that 33 million consumers from 170 countries use Amazon Pay, and sellers using Amazon Pay have seen sales growth “with Amazon [Pay] customers [from] 10 to as much as 33 percent higher than with non-Pay Amazon customers.”

Amazon also founded Alexa: a voice-activated virtual assistant that’s one of Amazon founder and CEO Jeff Bezos’ most remarkable accomplishments. In 2018, Amazon reported a profit of $3.03 billion, or $6.04 per share, up from $1.86 billion and $3.75 per share over the same quarter in 2017. And according to Bezos, “Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions [of] more devices from the Echo family compared to last year.”

Now let’s take a closer look at the most important differences between Alibaba and Amazon:

Alibaba’s 11.11 Global Shopping Festival vs. Amazon’s Prime Day

In 2018, Alibaba’s 11.11 Global Shopping Festival achieved a record, earning over $30.8 billion in sales during the 24-hour shopping marathon — even reaching the $1 billion mark in an amazing 1 minute and 25 seconds. The 2018 event easily surpasses the spending of any Western shopping event and was called “the biggest shopping day of all time.” By contrast, in 2019, Amazon sold $7.16 billion worth of goods on Prime Day, up 71% from 2018’s $4.19 billion in sales. Digital Commerce 360 says that while Amazon doesn’t communicate gross sales, it mentioned that over 175 million products were sold during the two-day shopping extravaganza, which was held July 15-16, 2019. It’s clear that Alibaba’s 11.11 wins this contest, however, it’s worth mentioning that the 11.11 event is 2.5 times bigger than Black Friday and Cyber Monday put together.

Generating Revenues for Partners

Hendrik Laubscher writes for Forbes that while both Amazon and Alibaba “offer brands opportunities to generate sales… one is focused on self-enrichment (Amazon) while the other offers a gateway to a platform that is aimed at mutual opportunity and success (Alibaba).” Laubscher points specifically to data collection, and his focus falls on how the platforms use their data. Laubscher adds, “Amazon famously does not share data with third-party sellers or brands as Amazon wants to generate revenue and compete with their partners. Alibaba, on the other hand, shares this data with brands to empower them to make more sales on the Alibaba platform.”

Alibaba is essentially empowering its partners by giving them all the means to succeed, while Amazon is stringent with data sharing because they see their partner brands as competitors. Furthermore, Alibaba engages its customers through gaming and interactive shopping experiences while Amazon is limited in its customer engagement programs. “As Alibaba is a platform business, the better partner brands do, the better Alibaba does as interests are aligned,” says Laubscher.

Revenue Generation

In 2018, Alibaba’s Gross Merchandise Value (GMV) was around $768 billion while Amazon’s GMV was $239 billion, and despite charging higher operating fees and sales commissions, Amazon still can’t keep pace with Alibaba, who wins even in this category by a significant margin. If Amazon is serious about increasing revenues, it should reduce associated fees instead of raising them. In April 2018, Amazon raised fees for third-party sellers in select categories like apparel, accessories, handbags, and sunglasses. According to the e-commerce analysis company CPC Strategy, for apparel, “sellers will pay 17% of the total sales price, with a minimum fee of $1.00 per item.” And for shoes, handbags, and sunglasses, “sellers will pay 15% on items with a total sales price up to $75, and 18% on items with a total sales price greater than $75, with a minimum fee of $1.00 per item.”

Global Expansion

Amazon failed in China, a market dominated by Alibaba Group and, and earlier this year, it shut down its Chinese e-commerce business. Right from the outset, Amazon struggled to attract Chinese consumers with its Prime subscription model since the benefits Prime offered (fast delivery and discounts) don’t differentiate it from local competitors. Essentially, Chinese companies offer free shipping on all products, while Amazon required customers “to hit minimums of 59 yuan to 200 yuan ($8.79 to $29.81), depending on whether the item was Prime eligible.”

On top of that, Business Insider mentions that Amazon’s mobile app design has flaws and lags behind those of Chinese competitors. As Shirley Lu, an analyst for Euromonitor Internationalsaid in an interview with Business Insider, “66% of digital purchases were made through mobile phones in 2016, amounting to $450.3 billion in sales, and that is expected to grow going forward. Amazon’s app, however, seems to be missing the mark in China as it is bland and bare, while competitors’ apps are more colorful and festive, which may appeal more to Chinese consumers.”

Conversely, Alibaba has been eyeing the U.S. market lately. In July, the group announced that their platform is now open to small U.S. businesses who want to sell globally. This brings a unique opportunity to American sellers who want to expand to China, India, Brazil, and Canada — countries that are all served by Alibaba. Furthermore, Tmall Global is now available in English “in an attempt to double the number of international brands on the platform to 40,000 in the next three years.”

We predict that Jack Ma’s American dream will meet some resistance from U.S. consumers, but brand loyalty is lower in the United States as compared to China, and those consumers are open to new brands if they offer better value, lower prices, and a better selection than local products.


In their September 5, 2014, filing with the Securities and Exchange Commission (Washington, D.C. 20549), it is stated that Alibaba’s founders started the company “to champion small businesses, in the belief that the Internet would level the playing field by enabling small enterprises to leverage innovation and technology to grow and compete more effectively in the domestic and global economies. Our decisions are guided by how they serve our mission over the long-term, not by the pursuit of short-term gains.” This decision to focus on small sellers and consumers instead of pursuing short-term gains stands in sharp contrast to Amazon’s approach. Moreover, the spirit of partnership and the ability to serve customers is something the founders considered crucial to the success of Alibaba, and this spirit of partnership was formalized under the name Lakeside Partners in 2010.

In a 2014 CNBC interview, Jack Ma again emphasized the group’s commitment to small players. “Today what we got is not money, what we got is trust from the people. Millions of small businesses, so many shareholders, I am very honored and so excited because when you see these shareholders the responsibility I’ve been thinking about the next five to ten years how I can make sure these shareholders are happy.”

By contrast, eCommerceFuel points out that Jeff Bezos “is notorious on Wall Street for continually investing in the future of his company at the expense of providing short term returns/profits to shareholders.” Additionally, Andrew Youderian mentions that Amazon is “alienating suppliers, content partners, and publishers in their pursuit” of getting the best price for the Amazon customers, and the company has been criticized for its treatment of third-party sellers who are struggling to stay relevant on the platform.

As illustrated, both Alibaba and Amazon have strengths and weaknesses, and while Alibaba is a titan in China that enjoys an in-depth understanding of the Asian-Pacific market, it’s a different story for the e-tailer in the American market. In fact, the U.S. has been a tough nut to crack for foreign companies so far. Given the ongoing trade war and President Trump’s anti-China rhetoric, it’s safe to say that traditional approaches won’t work anymore; thus, Alibaba needs to solidify its reputation in the Western hemisphere.

On the other hand, Amazon should learn from Alibaba about how to embrace a “partnership” mentality and build a stronger connection with sellers and business partners. Their win-at-all-costs mantra is a destructive approach that doesn’t work with younger generations that are into socially conscious consumption. It’s an adjustment that would surely serve them well in the long run.

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The Best and Worst of NYFW SS20

The Jing Daily team is pleased to introduce the Jing Daily Fashion Week Score, which evaluates a range of parameters to assess how a brand’s collection resonates with the Chinese audience. For NYFW Spring 2020, Jing Daily looks at a range of brands who have a stake in the Chinese market: from powerhouse Ralph Lauren that dominated Chinese social media with a star-studded event to Coach who is struggling to recoup from its recent blunder in the market.

The Jing Daily Fashion Week Score is based on the following parameters:

  • Model representation: evaluates representation of Chinese models on the runway.
  • Digital impact: evaluates Chinese netizen reception and engagement on leading social media platforms including Weibo, WeChat, and Little Red Book.
  • KOL & celebrity visibility: considers star power associated with the brand through strategic KOL and celebrity partnerships.
  • Special brand efforts: considers special programs or efforts on a brand’s part to speak to the Chinese audience.
  • Design context: a qualitative assessment of how the brand’s collection will speak to the Chinese audience based on current trends and preferences.
  • Brand history: considers existing brand history in China, including overall presence, social reach, number of stores, earning trends and brand missteps.


Illustration: Dustin Tong/Jing Daily.

Ralph Lauren’s Fall 2019 Art Deco set translated to the highest overall impact among the Chinese audience. This was largely in thanks to the caliber of Chinese celebrities and influencers in attendance, who had a combined following of over 150 million on Chinese social media platforms, translating to over 300,000 engagement points through the attendees alone. The Fall 2019 show was also live streamed on Weibo, Tmall, JD, and Ralph Lauren’s website, creating multiple touch points for Chinese netizens to interact with the show. Ralph Lauren’s strategy went beyond the show itself, inviting several Chinese celebrities to the US Open, resulting in multiple-day coverage that highly capitalized on the NYFW show. On WeChat and Weibo, netizens buzzed about streetwear heavyweight Edison Chen’s black-tie look, which has generated more comments and likes on Weibo compared to other celebrities.


Illustration: Dustin Tong/Jing Daily.

3.1 Philip Lim is among the smaller labels included in the Score, but the brand’s Spring 2020 show had a relatively high impact, proving that a concerted effort can yield high results regardless of the brand’s size. The brand strategically leveraged influencer and celebrity invitations — including Selina Ren, Stephy Deng, Lorene Ren, and Xinxin Zhang — that translated into high engagement on both Weibo and WeChat. Notably, the brand’s show featured the highest diversity and representation among all brands, sending a total of 8 Chinese models down the runway. Meanwhile, Lim’s design codes strongly translate to a portion of the Chinese market, building a cult-like following.


Illustration: Dustin Tong/Jing Daily.

This season, Michael Kors implemented a highly targeted strategy that successfully reached the Chinese audience. The brand engaged very actively with its consumers, implementing the hashtag #AllAccessKors four days leading up to the runway show, totaling up to 17 posts that generated over 39K impressions of the hashtag on Weibo alone. The brand did not leverage a high volume of Chinese influencers but did focus on the star power of its brand ambassadors Leo Wu and Lareina Song that generated 47K points of engagement through their’ posts. With a live stream on Tmall, Michael Kors also generated buzz on China’s leading retail platform. The brand’s popularity was seemingly not impacted by the previous scandal from Versace, which is also owned by Michael Kors’ parent company Capri Holdings.


Illustration: Dustin Tong/Jing Daily.

Tory Burch took Princess Diana as inspiration for her Spring 2020 collection and the approach highly resonated with Chinese netizens. Fashion influencer Shangwufan posted an image pasting Diana’s real-life outfit side by side with the collection looks. While the show didn’t produce major overall impressions, it did gain high engagement from followers of the brand. The collection was a prime example of how a brand can speak to the Chinese community organically, without forcing itself into the conversation. The show also played host to a range of Chinese celebrities, namely Yinger, Patty Hou, and KOLs, including Anny Fan, Fengwanwan, and Xinxin Zhang that contributed to discussion volume around the show.


Illustration: Dustin Tong/Jing Daily.

Tommy Hilfiger‘s past several fashion shows have proven the brand is implementing well-thought out strategies. Only a year ago, the brand took to Shanghai to present its Fall 2018 collection. This year, the brand collaborated with U.S. actress Zendya, presenting a Hip Hop heavy show at The Apollo Theater in Harlem, New York. Compared to last year’s Shanghai show, the China relevancy of this year’s show was relatively low. Granted, the focus of this show was a different demographic and received praise for incorporating Hip Hop without appropriating the culture. While the show was made available via live streaming on Weibo, netizens failed to highly engage with the show and its message of diversity. They did, however, buzz about Chinese actress Ying Er’s vintage-looking outfit.


Tom Ford shook up its runway presentation this season, taking a crowd of fashion insiders down to the New York subway. In China, there was no major online conversation driven by influencers or by Tom Ford’s official Weibo account, although fans of the account did take it upon themselves to share imagery of the show. Overall, discussions about Tom Ford Beauty dominate Weibo and WeChat. While last season’s show hosted several Chinese celebrities and KOLs, this season was limited. Model representation on the runway was also lacking, although two big names, Yang Hao and He Cong, added to overall visibility. Of all the collections shown at NYFW, Tom Ford presented the most untapped potential to position itself as leading player among Chinese onlookers.


Illustration: Dustin Tong/Jing Daily.

Stuart Vevers’ Spring 2020 collection for Coach presented a design shift from the Americana accent that has defined the label for the past six years, looking instead to ’80s New York. While the collection was strong, the brand saw little to no engagement with the Chinese audience. The brand recently sparked major backlash from Chinese netizens due to a culturally insensitive T-shirt and has seemingly taken a step back from its China strategy this season. The brand made no official posts about the runway show on their WeChat or Weibo accounts. There was likewise no Chinese celebrities or KOLs in attendance, or any major online discussion. For the first time in several years, Liu Wen was not present at NYFW, who recently parted ways with Coach following their misstep.

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