The Hottest Retail Interior in China is not in Beijing or Shanghai

As brands expand their retail store networks beyond China’s top-tier metropolises into the traditionally less fashionable but fast-growing provincial cities, making a splash in these new markets is a top priority. E-commerce is just as popular in the second- and third-tier cities as in Beijing and Shanghai, and consumers won’t leave home based on a brand’s reputation or name-recognition alone.

Brands need to create compelling experiences to entice consumers to visit their stores, and that’s why we’re seeing some of China’s most impressive retail interiors today are in cities like Chongqing, Suzhou, and Zhengzhou.

Online architecture, design, and interiors magazine Dezeen placed a boutique in China and several other outstanding luxury interiors on the longlist for the “retail interior” category in its 2019 design awards this summer. Although none of the Chinese contenders made the shortlist, announced at the beginning of September, the longlist shout-outs were an acknowledgment of the innovation and creativity involved in the conception and execution of retail spaces in China right now.

Chongqing’s SND boutique isn’t just the standout Chinese representative from Dezeen’s retail longlist — it’s arguably one of the most stunning retails space in China right now. Designed by Shenzhen architects Various Associates, the Shin Kong Place boutique is SND’s most ambitious to date.

Various Associates said the store, completed in March this year, is intended to be “a medium where customers can explore the relation between body and space.” Framed around two distinct spaces, it’s certainly a mesmerizing experience for the consumer. When customers enter, their eyes are drawn first to a space showcasing brands such as Victoria Beckham, Chiara Ferragni, and Opening Ceremony, which are hung with the reverence of a gallery exhibit. The main attraction, however, is a room-within-a-room named the “milestone.” The design plays with customers’ curiosity, offering little at hint what lies inside. The interior is a “ceremonial” space bringing together natural materials, symmetrical elements and clever use of light and reflection as the backdrop for more displays of luxury jewelry and more garments.


Annakiki’s first store in Chongqing. Photo: Courtesy of Annakiki

As one of the world’s fastest growing cities, it’s fitting that Chongqing is enjoying the attentions of a variety of interior designers and architects who are scaling up to meet shoppers’ raised expectations. Chinese designer Annakiki’s first store in Chongqing, “Bizarre Girls’ Closet,” is named in honor of the free-spirited, rebellious young women who the brand takes as its natural consumer. The  signature feature created by architects from Joy Season Studio is a wall made up of spools of bright red thread, but the overall feel is a balance of classical motifs and futuristic-looking materials.


JWH’s menswear store in Zhengzhou. Photo: Courtesy of JWH

These aren’t the only stores centering an elevated customer experience around materials that evoke the external world. In Zhengzhou, Henan province, menswear store JWH’s interior is dominated by the cool grey tones of concrete, steel, and Shanghai plaster, in a callback to that city’s pre-WWII golden age. In addition to touches that echo urban Chinese landscapes, designer Atelier & Co. invites consumers to walk across a transparent floor on the store’s upper floor. Also notable is the fact that JWH is located in a middle-of-the-road Zhengzhou mall. Retailers in provincial cities may be forced to rent space in uninspired commercial property developments, but Atelier & Co. turned this to JWH’s advantage. Rather than aim low and just “fit in,” ambitious designers can seize the opportunity to wow shoppers by creating something special.


The Library in Valextra’s new Chengdu store. Photo: Courtesy of Valextra

Neri & Hu also remodeled a cookie-cutter mall unit for Italian brand Valextra’s flagship store in Chengdu, Sichuan province. The design firm rebuilt the store facade as a smooth, solid wall of concrete, at once distinguishing Valextra from its neighbors and setting the tone for the elegant interior. The store itself is divided into a “library” and “reading room.” Each incorporates reclaimed wood and typically Chinese grey brick, with rounded shelves and delicate spotlighting creating a sense of curation, inviting hushed appreciation for Valextra’s colorful accessories.

Of course, retail design innovation hasn’t deserted Beijing and Shanghai, but it’s worth noting that smaller cities can give retail architects and designers a platform to explore new territory and test ideas. For example, Various Associates was only founded in Shenzhen in 2017, and its work for SND in Chongqing was one of the firm’s first major projects outside of Beijing, Shanghai and its home city. Likewise, Atelier & Co.’s design for the JWH store in Zhengzhou was its first significant project outside Shanghai.

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The Store that Cracked the Code to Attracting Independent Chinese Travelers

Founded in Madrid in 1987, the designer concept store Ekseption has long cemented its place as the go-to destination for celebrities, creatives, and fashion devotees in the Spanish capital. Having essentially formed the mold for luxury multi-brand retail in Madrid over the past three decades, the calm, gallery-like Ekseption is a world apart from the tourist throngs packing stores on Calle Fuencarral or on Gran Via.

Located in the plush Salamanca district, Ekseption stocks a wide array of brands from around the world, ranging from big names like Rick Owens, Saint Laurent, Loewe, and The Row to smaller designers like Mara Hoffman, Muuñ, and Plan C.

As is the case with every other major retailer in Madrid and Barcelona, Ekseption has looked to make a bigger name for itself internationally in recent years, particularly via e-commerce. One market in particular that has become a priority is China. Although Chinese tourism to Spain is still essentially in its infancy — only around 1 percent of Chinese tourists choose Spain for their international vacations — Chinese tourist-shoppers are already a powerful (and lucrative) force at Spanish high-end boutiques and department stores.

Recently, Jing Daily spoke with Ekseption e-commerce manager Eva Sanchez to learn a little more about how Ekseption is successfully cultivating a growing Chinese customer base.

While most Chinese tourists visiting Madrid flock to the major shopping streets and department stores, a growing number are seeking out multi-brand retailers like Ekseption. What attracts them to choose you over other stores?

We can identify two different kinds of Chinese tourists in Madrid. One type is organized groups with fixed routes and guided tours that know in advance their itinerary. The other is individuals keen to discover the city on their own, skipping overcrowded places and looking for selected items. Ekseption specially satisfies the needs of the second group.

How do Chinese shoppers’ habits or demands differ from other customers?

Chinese shoppers are really into the fashion industry and they know exactly what they want before even getting into the store. They are extremely well-informed compared to any other shopper.

What brands and products do you typically see Chinese tourists drawn to more than others?

We can definitely say Moncler, Balenciaga, Gucci, and Off-White. These are the brands that currently are driving the most Chinese tourists to Ekseption, but this is always changing as the fashion industry never stays the same.

If you have worked with Chinese influencers (or celebrities), how did that collaboration compare to building word of mouth among loyal customers in terms of effectiveness?

We do not include influencer collaborations in our communication strategy, because we value more authentic, honest, and spontaneous comments on Ekseption experiences by our real customers. (Who often are celebrities.)

What, if anything, is Ekseption doing online, via social media and digital marketing, to encourage Chinese tourists to not just visit, but to tell friends?

Ekseption has been working on building its Chinese consumer base for more than 10 years now. We’re active on the main Chinese social media platforms, such as WeChat, Weibo, and Little Red Book. We regularly post our own content and have dedicated Chinese customer service available. We also have specialized marketing actions scheduled on the biggest Chinese dates as Lunar New Year, Single’s Day, and other Chinese holidays, which always receive excellent feedback.

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Gen Zers vs. Millennials: How and Why Brands Must Know the Difference

Marketers too often bundle millennials and Gen Zers into one indistinguishable group, but, without market segmentation, retailers won’t be able to determine the precise needs and characteristics of these different consumer groups. Indeed, both segments are comprised of young, digitally savvy individuals. But while the members of one group are in their thirties (millennials), the others are teenagers or college kids (Generation Z). They are two autonomous groups, and each segment has distinct routines, buying habits, characteristics, and priorities. In fact, marketers will even discover significant distinctions within each generation, making the dissimilarities between millennials and Generation Z that much more important.

It makes sense that a 20-year-old would understand luxury differently than someone in their late thirties. If we compare streetwear trends (brands like Supreme and Off-White that are popular with Gen. Z) to the understated elegance of Hermès products, then we can grasp why generational marketing strategies help retailers understand the consumption habits of their customers.

Generation Z

First, let’s take a look at these two cohorts and see what makes them unique. Generation Z is the demographic segment born between the mid-1990s and the early 2000s. Chinese Gen Zers are the product of the single-child policy, growing up in households without siblings and enjoying the full attention and love of their parents and grandparents. They also witnessed China’s massive economic growth and came of age in an environment full of opportunity; thus, their upbringing and lifestyle are quite different when compared to those of older relatives. A different approach to parenting and a more carefree lifestyle gave them different values and beliefs from their predecessors, which allowed them to grow up as optimistic and self-confident youngsters.

A study by OC&C Strategy Consultants shows that 41 percent of Chinese Gen-Z respondents are optimistic about the future versus only 26 percent globally. Moreover, these youngsters spend 15 percent of the household’s income. “This is a generation that has never known worry, so they spend more and save less,” says Adam Xu, a partner at OC&C. According to Xu, this segment is “willing to take on debt in order to fund their purchases,” and this partially explains why Generation Z is more likely to buy luxury brands than millennials. In fact, Bloomberg notes that a different survey conducted by OC&C Strategy Consultants shows that over 50 percent of Chinese Gen-Z buyers spent over 50,000 yuan on luxury goods in 2018, compared to just 32 percent of Chinese millennials. Likewise, a 2017 study by Retail Dive found that Gen Zers are more likely to make luxury purchases than millennials.

These well-informed digital natives are “willing to share their feelings and experiences in forms of online reviews, blog posts and other means of self-expression,” says Adam Xu. And this implies “that information sharing extends even further beyond their immediate circles for Chinese Generation Z,” a path that offers great marketing potential according to Xu. But how can marketers advertise luxury products to this optimistic, frugal, and tech-savvy consumer segment?

  1. Influencer marketing

This digitally native consumer base grew up in a high-tech world and took advantage of the internet, apps, and social media at an early age. They’ve been expanding their knowledge on the internet, interacting with their peers on social media sites, and making purchases online instead of offline. That’s why OC&C Strategy Consultants says that “this generation is also subject to higher levels of influence from celebrities.” As Chinese influencers “engage with their audience naturally, similar to how they talk to friends, and they recommend and review products convincingly and in a way that is less receptive to commercial interests,” their message seems more honest to Gen Zers, and the interaction between KOL and follower is cordial and benevolent. However, a one-size-fits-all approach doesn’t create a successful influencer marketing campaign, and brands must partner with KOLs who engage with Gen Z because millennials have different idols and champions.

Successful influencer marketing campaigns: Louis Vuitton selecting Final Fantasy character Lightning as a brand ambassador and Chloé partnering with Mr. Bags.

  1. Transparency

This demographic segment places great value on honesty and transparency in advertising. Gen Zers won’t fall for photoshopped images of perfect-looking models, so retailers that promote fake standards of beauty or deceitful marketing messages will be cast aside. Additionally, building their trust takes time. Therefore, righteousness, dependability, and integrity should become top priorities for the retailers who want to connect with the Gen-Z segment.

Successful marketing campaign: The Fenty line. Rihanna launched Fenty in China, on July 2019, however, beauty lovers already had access to tens of thousands of peer-to-peer reviews of the line on RED. By embracing a review marketing strategy, Fenty doesn’t give off the appearance of a brand that’s only interested in a fast sale.

  1. Personalization and customization

A 2015 Deloitte consumer review paper, titled Made-to-order: The rise of mass personalization, shows that 1 in 4 Gen Zers “is happy for businesses to use their personal information to offer them more personalized products or services.” Furthermore, OC&C Strategy Consultants mentions that 25 percent of Gen-Z consumers say “it is important to have a unique view on style and creativity.” Consequently, they suggest that retailers focus on personalized services and customized experiences and products. Bespoke experiences, made-to-order designs, and limited-edition collections will attract the Gen-Z consumer.

Successful marketing campaign: Longchamp’s personalized Le Pliage bag, which Chinese consumers could purchase by scanning the QR code and was available both online and offline.

  1. Socially-conscious consumption

Gen-Z consumers are social crusaders who celebrate individuality and diversity at their core. McKinsey & Company says that this demographic segment believes “profoundly in the efficacy of dialogue to solve conflicts and improve the world. Finally, they make decisions and relate to institutions in a highly analytical and pragmatic way.”

And these consumers know how to do their homework. “Gen Zers are willing to take extra steps to research brands’ supply chains and employment practices before making purchase decisions,” says OC&C Strategy Consultants. In China, this demographic segment is very focused on environmentally friendly consumption (25 percent versus 13 percent for Gen Zers across the globe).

It should be noted that these youngsters can invent life-saving apps (Faith Florez), come up with incredible new technologies, fight climate change (Greta Thunberg), or become entrepreneurs who can change the world around them. And retailers need to learn to cope with a generation of well-informed and socially conscious consumers that demands radical transparency and sustainability.

Successful marketing campaign: customers can return boxes for re-use and recycling.


Millennials (a.k.a. Generation Y) are born between 1981 and 1996. They are the group that will not only reshape the image of China but will also transform the country’s entire retail ecosystem. “400 million strong” sounds like a marketing slogan but this figure represents the Chinese millennial group. For China Daily, this demographic segment is the primary driver “of the country’s surge in consumption, with spending by those under the age of 35 accounting for 65 percent of total consumption growth.” And according to estimations, the spending will grow by 11 percent annually until 2021.

The segment is also highly educated, with 1 in 4 holding a bachelor’s degree or higher. Additionally, they have an international outlook, and China Daily says that “two-thirds of all Chinese passport holders are millennials.” Just exactly like Generation Z, they are highly connected, with 90 percent of millennials owning a smartphone, and evidently, Chinese millennials are shaping the future of global retail: They account for over 50 percent of the luxury purchases made by Chinese, which is why marketers want to know how to engage them. As it gets harder to connect with this consumer base, marketers might benefit from implementing these strategies:

  1. Demand for uniqueness

While Western millennials are famous for their deal-seeking behavior, Chinese millennials are pretentious consumers who love to splurge on luxury goods. Forbes mentions that “Chinese millennials grew up during China’s economic reforms… They have only experienced good times.” Consequently, while their counterparts in the West fought economic hardship (the European banking crisis, the Great Recession), Chinese millennials enjoyed a careless lifestyle mainly because of the country’s economic reforms.

This timing has shaped their spending behavior, turning them into prodigal consumers who demand premium services and unique products. Therefore, since they are a spoiled and dominant force in luxury consumption, Chinese millennials have learned to pursue “premium products and services that could enhance a personal sense of well-being.” Original goods and services convey a sense of superiority and authenticity, which is why Chinese millennials enjoy niche brands and bespoke retail solutions.

Successful marketing campaign: NIKE iD — customized shoes

  1. Women’s empowerment

According to Swiss private bank Julius Baer, in 2017, around 1 in 3 senior management positions in the China region were held by women, and innovative companies such as Alibaba Group and Tencent are proving that Chinese women can break the glass ceiling and attain leadership positions. But in a country that promotes women in the corporate world and teaches girls to be emancipated, determined, and strong-willed leaders, a “sheng nu” stigma still exists.

China’s “leftover women” are the product of the one-child policy. They belong to a millennial generation of urban, educated, and highly skilled women who are now challenging traditional concepts and reshaping previous notions of womanhood. Luxury brands who have their eye on this consumer base and understand their spending habits will generate higher sales and stay ahead of competitors.

Successful marketing campaign: SKII- Marriage Market Takeover

  1. Loyalty programs

A study by Ernst & Young shows that 45 percent of millennials enjoy loyalty programs, and they love being rewarded for their purchases and allegiances to brands. Consequently, retailers who recompense returning customers are winning the hearts of millennial buyers. However, luxury brands should not rely on the traditional rewards approach. This segment is drawn to originality, personalization, and creative customer loyalty programs. Gamification efforts amplify engagement while modern technologies such as AR alter the customer experience and boost loyalty.

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Can Tmall’s NYFW Show Present China as Creators Instead of Consumers?

For the third time, online Chinese retail giant Tmall provided a platform for Chinese designers at New York Fashion Week with this year’s Spring 2020 show. Themed “Tmall China Cool,” Tmall’s presentation featured five brands that represent the full spectrum of the Chinese market, from the budding Parsons graduate i-am-chen to the decades-old intimates label THREEGUN.

Tmall’s fashion week aspirations were clear from the get-go: The digital juggernaut wants to establish China as a dominant player on the global fashion scene and showcase the country’s homegrown creatives on the world’s most influential fashion stage to bring awareness to its creative potential. “China has grown from a manufacturing powerhouse to consumer buying powerhouse, and now we want to show that Chinese designers are innovative and creative enough, forward-thinking and trend-worthy,” says James Lin, Head of Fashion of Alibaba North America.

Indeed, China’s role in the fashion industry has quickly progressed from manufacturer to consumer, and now, China is slowly pushing to build the prestige of its creatives to Western levels — and Tmall hopes to play a big role in driving that evolution. But maybe even more valuable than international acclaim will be the recognition Tmall will receive back in China, thanks to a “we showed at NYFW” stamp that will help drive sales and brand recognition over there. While each participating brands stood to gain from this NYFW exposure, the commercial interests of the larger labels couldn’t help but feel at odds with those of the younger designers.


Peacebird SS2020. Photo: Courtesy of Alibaba

The day kicked off with the Chinese labels Peacebird and THREEGUN — the brands with perhaps the most to gain from showing at Tmall’s NYFW. Both are mega commercial brands with long-standing histories in the Chinese fashion industry. THREEGUN emerged as an intimates brand even before the establishment of the People’s Republic of China while Peacebird has a two-decade history selling menswear, womenswear, and kidswear.


THREEGUN SS2020. Photo: Courtesy of Alibaba

Both brands took a stab at presenting their collections with a fresh eye, looking at the NYFW platform as a way to reinvigorate their brands and presumably attempt a brand facelift for consumers back in China. THREEGUN asked the emerging Chinese designer Chuang Qu to design their spring collection as a way to frame the brand as a main-stage contender while also appealing to a younger demographic. “We really want to focus on the quality of our products and make it speak for our brand,” says Qu. “Chinese beauty is so diverse, and you do not need a symbol to express that kind of beauty. Made in China and designed in China is already a representation of the Chinese culture for our brand.”

Meanwhile, Peacebird has made wider attempts in recent years to appeal to a younger demographic by launching collaborations with Coca-Cola and the Chinese food delivery platform Eleme (“饿了么”). The brand fumbled a bit during its early years because of an unclear direction, but a strong collaboration strategy — along with its distinguished history in the industry — has earned it a recent comeback. The Fashion Week collection was a continuation of that long-term strategy, and the brand received acclaim from Chinese netizens’ for its design and entertaining collaborations.


SONGTA SS2020. Photo: Courtesy of Alibaba

Later in the day, the show featured two of its freshest voices: SONGTA and i-am-chen. A conceptual artist turned fashion designer, Song Ta established his luxury brand just four months ago, but he’s nevertheless hoping to become a mass-market label. SONGTA is positioning itself among foreign counterparts like Ambush and FENTY, and the founder believes there’s an open slot in China’s luxury streetwear market for homegrown talent. “I am not an independent designer,” says Song. “I want to create something for the mass market, some trendy streetwear that young people can afford and will wear on the street on day-to-day occasions. But I am a luxury brand.”


i-am-chen SS2020. Photo: Courtesy of Alibaba

Zhi Chen, the founder of i-am-chen, represents another type of designer in China — young and emerging. A semi-finalist in the 2018/2019 International Woolmark Prize Hong Kong and a recent graduate of the Parsons School of Design in New York City, Chen offered fashion fans the highlight of the day with a knitwear-heavy collection that was likely to be a hit across a global market. “I think it is unreasonable and not cool to categorize people by age,” Chen tells Jing Daily. “My collection is for people who have a young soul regardless of age.” Chen also believes that the Chinese fashion industry is at a turning point. “The opportunity and support that the growing Chinese economy and market offers [Chinese designers] is something that designers from elsewhere in the world can never imagine,” Chen adds.


RiZhuo SS2020. Photo: Courtesy of Alibaba

Rounding out the day was RiZhuo, a brand that sits somewhere between the large commercial brands and the more emerging designers. The brand started off selling on Taobao almost a decade ago, and after growing tremendously on that platform, started selling on both Tmall and JD. The collection called on a range of Chinese cultural inspirations for their collection, from ranger culture to the traditionally introverted nature of Chinese citizens. RiZhuo’s collection was consistent with its past designs, which have seen high-volume sales on Tmall, but that highly commercialized look failed to translate on the Fashion Week runway.

In the end, the “Tmall China Cool” show was a balancing act of commercial and creative entities. This intersection is what drives Tmall’s success, and the Alibaba-owned platform has no reason to shy away from it. After all, it’s Tmall’s ability to appeal to a mass market on a commercial platform — while still selling itself as high fashion — which has stamped it as the go-to platform for fashion brands Stella McCartney and Valentino when they decided to enter the China market.

Indeed, a massive number of Chinese consumers look to the Amazon-like retailer to experience fashion in a way that’s completely unfamiliar within the Western market. “People go to Amazon to save time,” Lin says. “In China, people go to Tmall to spend time. They want the all-inclusive experience online on the platform, and the experience is all linked together, including fashion.” The Chinese consumer is comfortable spending their time and interacting with fashion on this very commercial platform.

But in the New York Fashion Week context, many of these brands felt out of step. And while all the participating brands weren’t the best contenders to help shift the perception of creative output in China, they did paint a holistic picture of the various pockets within the Chinese fashion industry. Viewers would be wise to look at Tmall’s NYFW shows as a way to deepen their understanding of the current fashion climate in China: a market that’s dominated by commercial players for decades but is also welcoming young designers with tremendous creative promise.

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Here’s How to Avoid the Luxury Industry’s Costliest Mistake

Underestimating the fundamentals is death for a luxury brand. Almost daily, I see startling mistakes that cost brands millions of dollars in profits. And even worse, many of these significant mistakes weaken a brand’s overall equity, which hurts the company immeasurably over the long haul. But what exactly makes luxury such a tricky and volatile segment?

Much of what seems intuitively right in luxury is actually dead wrong. A common misconception is that the qualities of a product define its ultimate luxury value. In other words, many brands believe that people pay for the beauty and the amenities of a hotel room, for the quality craftsmanship of a handbag, and the alluring design of a hypercar. All those elements are essential for positioning a product as a luxury item, but they aren’t the drivers of luxury value.

Those elements don’t drive consumers’ willingness to pay, which is an important distinction. What luxury consumers mainly pay for is added luxury value (ALV). ALV is comprised of brand-related social status effects which include the perception of enhanced attractiveness, social protection, being perceived as an expert, or for the experience of something new. When we measure added luxury value, the product is not part of it. This is what confounds managers of highly engineered luxury brands (like cars) or design-driven luxury brands (like handbags or hotels). The product can be an identifier or an enabler, but it’s not the value driver.

For instance, a well-known luxury hotel chain renovated one of its flagship properties for more than $300 million. The result was a stunning architectural masterpiece, with a beautiful new lobby, a fantastic restaurant, and beautiful rooms that wow everyone who sees them. The spa is second to none, and the amenities are outstanding. But after the renovation was complete, something unexpected happened. Bookings and room occupancy went down. Panicked, the hotel commissioned a guest survey, and to their surprise, customer satisfaction was at an all-time-low; people were never as disappointed as after experiencing the renovated hotel. In other words, a multi-million-dollar improvement led to a decrease in perceived value! Revenue decreased, customers were less happy, profits plummeted, and millions were wasted. It’s an example I see all the time across all luxury categories.

When looking into the reasons for the hotel’s dramatic downfall, it became clear that the company underestimated their luxury value, which wasn’t the quality of the property but was mainly the standout and personalized service. The human factor was more important in terms of value proposition than the physical “product” of the hotel. When the property was upgraded, the hotel didn’t re-train the staff or explain to them what the added luxury meant. The hotel was seen as luxurious before, but the upgrade raised the bar for the company by triggering higher customer expectations toward the service. Therefore, the customers were disappointed with the service — which had already been great — but no longer seemed on par with what the new positioning suggested. In luxury, ‘great’ isn’t always good enough, especially when it’s not differentiated sufficiently or when there are gaps in expectations and perceptions.

This is the costliest mistake brands across all luxury categories frequently make: They aren’t clear about their value proposition. They connect the value too much to tangibles (products, service offerings), but not enough to the intangibles that drive added luxury value.

One of Asia’s most expensive hairdressers understood this. He is located in Hong Kong, and one of his haircuts can cost $10,000 or more. In his view, the value proposition he provides is to be the customer’s best friend. When a customer calls him at 11 p.m. and tells him her hair looks horrible and she needs immediate intervention, he will gather his staff regardless of the day of the week or the time of day. They open the salon even after midnight, if needed, or fly clients in by helicopter and will take care of their concerns at a moment’s notice. This is made possible by reducing the number of clients and offering them personalized services. While the salon is, of course, beautiful, that’s not the factor that leads people to pay such high prices for haircuts. They pay those prices because they perceive extreme value in the human element. In other words, the most personalized services that no one else anywhere provides, which goes far beyond the building and the haircut.

What must luxury brands need do then? Whether you are offering a luxury product or a luxury service, the most critical task is to define what sets your brand apart. Attributes like heritage, craftsmanship, expertise, experience, or “creating a dream” are what many companies thinksets them apart, but they are irrelevant. That’s because, in luxury, consumers expect everyoneto offer them the ultimate craftsmanship, expertise, or experience. They buy a “dream” with every luxury purchase, so when they go to a luxury hotel, they expect a spectacular room, and when they buy a hypercar, they expect exhilarating acceleration and stunning design. But those factors are only the “entry ticket” to luxury — they don’t drive the value.

Ultimate value is driven by defining one extreme performance point that sets the brand apart from all competing brands at the same level. This ownable attribute needs to be determined from both a rational perspective and an emotional perspective. Without the emotional link, the brand has no purpose and will not be perceived as authentic. Once it’s defined, the brand proposition must be applied across all touchpoints along the customer journey. And to bring it to life, the staff needs to be trained in the fundamentals of luxury and their role in delivering that extreme performance point to customers, both rationally and emotionally.

I like to compare luxury brands to operas. Consumers will perceive the brand as a whole, not as the sum of its parts. If one part is off, the entire experience is ruined, just like an opera is a horror show when one musician, even the one with the smallest role, is not playing in synch with the others. Every detail matters in luxury. There can’t be any imperfections.

Given that the value of a luxury brand depends on delivering the brand story consistently at each touchpoint, the human factor becomes the most decisive. Defining the brand story with clarity and training the staff so they understand how to deliver their part of the branded service is relatively affordable compared to real-estate investments or developing cutting-edge technology. While many companies spend enormous amounts of money on the latter, they try to save money on the former. This is, in fact, the costliest mistake a brand can make.

As competition in the luxury segment heats up, connecting a brand flawlessly with its target group has become the most critical factor for success anywhere in the world. But in China, where they have the most digitally savvy and brand-obsessed customers with highest expectations, prioritizing the tangible product over brand equity creation and delivery can be deadly.

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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China Continues to Force the Hand of Western Brands over Hong Kong

Recently, Jing Daily looked at how China was pressuring foreign brands to apologize for perceived slights against its territorial integrity and/or for support for Hong Kong protestors — a trend that has already affected the likes of Givenchy, Coach, and Calvin Klein. As we pointed out, Beijing indicated via the Global Times that netizens would not just come after brands for recent “indiscretions” but also past ones.

This week, Spanish fashion giant Inditex — the world’s largest retailer, selling in 200 markets via its online platform and 96 markets through 7,400 brick-and-mortar stores — was the latest foreign company to succumb to Beijing’s pressure, issuing a public apology to distance itself from the Hong Kong protests and ensure its business won’t be frozen out in China.

As noted, this came on the heels of the unprecedented pressure China put on Cathay Pacific to publicly apologize for staff that were involved with the Hong Kong protests, which eventually led to the resignation of the company’s CEO and sent a message to the world that business will have to recognize the “one-China” policy or be punished. The world was waiting to see how long it would take for the Mainland to apply its brute influence across foreign businesses operating in China, and the response was fast.

On September 2, the Inditex-owned fast-fashion brand ZARA closed some of its stores in Hong Kong. As Business of Fashion reported, “A company representative who answered ZARA’s Hong Kong hotline on Tuesday confirmed that all of its stores on Hong Kong island were shut Monday, except one, but declined to give a reason for the closures.” According to the BBC, however, ZARA only closed some of its stores temporarily due to transportation delays that caused employees to run late.

Although it hasn’t been unusual for stores to close or change operating hours during the Hong Kong protests due to unsafe working conditions, staff taking leave to participate in demonstrations, or lack of customer turn-out, the Global Times nevertheless took the opportunity to call out the fashion giant. Widely recognized as the noisy mouthpiece of the Communist Party of China, the paper published an editorial piece on September 1, entitled, Zara faces Chinese boycott after suspected support for the strike in HK, which accused ZARA — with zero evidence — of closing its stores in support of the Hong Kong protests.

Another opinion piece, published on September 3, stated, “ZARA caused resentment among netizens on the Chinese mainland last year when it marked Hong Kong, Macao, and Taiwan as countries. It’s easy to associate these two things this time. And if there’s any chance that the last incident was an oversight, the closure of some Zara stores in Hong Kong on Monday can only be seen as deliberate.
 Zara needs to make a solemn explanation and correct some of its practices to give a serious explanation to the people who love Hong Kong and the mainland. The events in Hong Kong now draw a lot of attention from Chinese society as a whole. The public will not accept the Zara store’s move in Hong Kong. ZARA should not make serious misjudgments.”

The fashion brand did not waste any time in responding to the direct claims with a statement issued on their Weibo that read, “ZARA supports the integrity of the territorial sovereignty of the People’s Republic of China and has consistently supported the one country, two systems [policy]. ZARA has never supported strikes and has never published any statements related to this or any actions related to it.”

Issued on September 2, the statement quickly became a trending topic on Weibo and has been viewed over 170 million times since its publication. But this may not be enough to satisfy netizens who were angered by the Global Times or Weibo bots. ZARA will most likely work hard to keep its head down in China for the next several months and try to minimize the possibility of the kind of drawn-out semi-boycott that has hit other brands.

In general, though, this is a bold move by China based on a misunderstanding — and stoked by online mobs — that may indicate to major foreign retailers that Beijing expects more influence on private business and expects loyalty to its political worldview. It will be interesting to see how these issues play out for fast-fashion retailers like ZARA or other major luxury brands in both the short and long term.

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Chinese Whispers: Lvzhou, Weibo’s Questionable New App and 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:

— Weibo’s social app Lvzhou’s fifteen minutes of fame

— GQ lab took over Louis Vuitton’s WeChat and Weibo accounts

— China’s ‘deepfake’ app, Zao, faces security backlash

Weibo’s social app Lvzhou’s fifteen minutes of fameChina economic net 

After the Chinese social shopping app Little Red Book got suspended from Apple and Android stores, Weibo decided to step up this week and launch their new social app, Lvzhou (绿洲, “oasis”), which combines the layout of Instagram with the social sharing of Little Red Book. Lvzhou is marketed as a non-commercial community where users can discover interesting content across fashion, beauty, and travel sectors. However, the app went from quickly becoming the most downloaded app on the Apple store in China to disappearing altogether. That’s because it’s recently been alleged that Weibo copied the app’s design from a Korean team, which the CEO of Weibo later confirmed as accurate. Now, many KOLs who initially advocated for the app have been put in an awkward position because immediately after the launch, multiple fashion influencers — namely the celebrity stylist Fil小白, fashion blogger Mr. Bags, and Vogue China’s editor-in-chief Angelica Cheung — had already joined and posted on their account.

 GQ lab takes over Louis Vuitton WeChat and Weibo accounts — Fashion Business Daily 

Seeing a positive turnout from gogoboi’s takeover of their WeChat account, the French fashion powerhouse Louis Vuitton recently handed their Weibo and WeChat accounts over to GQ lab (the advertising arm of GQ China) to create posts pairing various styles of Louis Vuitton sneakers with different types of millennial nightlife. The posts went on to accumulate over 100,000 pageviews in three days. Louis Vuitton’s frequent online collaborations with KOLs continue to demonstrate an eagerness to engage with younger generations while also backing up what Louis Vuitton CEO, Michael Burke, had previously revealed about the brand’s marketing strategy: that it now spends roughly half of its marketing budget on digital channels.

China’s ‘deepfake’ app Zao faces security backlashXinhua 

Lvzhou isn’t the only app under the microscope this week. The ‘deepfake’ app Zao took the Chinese internet by storm, letting users create TV clips where they swap faces with actors or actresses to post on WeChat. By entering a phone number, the app can take images off of a user’s phone to generate a high-quality video within seconds. However, netizens also discovered a problematic clause in the user agreement: Zao maintains the rights of the images that users upload into the app, causing concerns about potential facial recognition security risks. Zao said it has changed its user agreement to address those concerns, and its parent company, MoMo Inc., said, “We protect personal data and value data safety. We’ve also adopted several safety measures including storage encryption.”

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Adapting for China? Global Brands Don’t Seek to be Understood, but to Understand

This post originally appeared on China Business Review, our content partner site.

Modernization does not equal Westernization. This is the fundamental lesson that global brands are slowly (and sometimes painfully) learning as they attempt to build popularity in China today. Global brands often conflate the two concepts, and the missing link is a deep cultural understanding of consumer purchase motivations.

Well-established global brands often underestimate the importance of this. Decisions are driven by a lingering temptation to rest on the laurels of legacy, yet the path to success in China necessitates humble acceptance that the company is entering the market on the back foot.

Compared to other markets, China is indeed a tough nut to crack.

The world of social media is governed by new powers; Xiao Hong Shu, WeChat, and Douyin, among others, replace the global superpowers of Facebook and Google. Protection laws may not have the clout brands are accustomed to, as Chanel recently found out upon losing a court case to a jewelry seller claiming his products emblazoned with the signature ‘double c’ were not an attempt to copy the iconic brand.

Language barriers and legal hurdles aside, one of the most significant and yet consistently underestimated reasons why global brands struggle in China is simply the cultural difference. Specifically, many fail to acknowledge that consumers in the Chinese market often have entirely different mindsets and motivations to those in the West.

Brands have learned there are China-specific standards that must be upheld. In fashion, for example, simple criteria include meeting Asian sizing requirements (a Western small is typically a medium in China) and manufacturing clothes with shorter sleeve lengths to accommodate body shape, as well as introducing China-specific lines that speak to local fashion trends. Where many brands have flouted these golden rules and failed, Zara has embraced them and is steadily building its market presence, despite the looming threat of fast-growing, tech-savvy local brands such as Heilan and Septwolves. These brands have around ten times more stores than Zara and H&M and enjoy considerable investment from major Chinese companies such as Tencent. For Zara, a delicate balance is at play: on the one hand maintaining the essence of a global brand, but on the other, adapting to satisfy the high expectations of Chinese consumers.

When it comes to getting the basics right, Western brands would do well to partner with local counterparts. When Starbucks first entered China, decisions were delegated to Maxim Caterers, Starbucks’ Hong Kong-based joint venture, and the company also partnered with mainland local chains, such as Mei Da from Beijing. Just as the initial founder of Starbucks changed much of his Italian-inspired concept to cater to the American market, so the brand humbly altered much of what makes the chain resonate with Americans for the Chinese market. Single chairs were exchanged for long, communal benches to allow large professional groups to flaunt their new generation co-working approach in public. The menu was overhauled to introduce more extensive tea and snack options, stores made space for logo-emblazoned accessories, and an office delivery was set up. Thus, in a move that Tom Doctoroff, author of What Chinese Want, claims is “one of the great Houdini acts of marketing,” Starbucks has successfully opened 3,300 stores in a market still not particularly keen on ground coffee.

Starbucks’ success illustrates that a unique, differentiated proposition is futile unless it is localized to consumer tastes and satisfies their basic requirements. The more established the brand, the more room they have to play, but until consumer trust is established, brands can never be too attentive to local customs.

Recognizing the need for behavior change

Unlike service brands such as Starbucks, who can moderate their offering to accommodate local tastes whilst keeping their core product, fast-moving consumer goods (FMCG) brands are often faced with the challenge of introducing an entirely unfamiliar product into the market with no room for modification. Such was the case with Pampers when it launched in 1997 in China as an entirely new concept. P&G’s attempts to sell on price alone failed; despite being cheap, diapers were seen as white elephants, because mothers had no reason to believe diapers were superior to kaidangku (split pants), which allow infants to freely relieve themselves while put into a squat position by their parents. In fact, this method often potty-trains Chinese children quicker than their diaper-clad counterparts in the West due to the memory structures created by the repeated squat ritual.

“For all Global brands adapting for China, understanding such deep-seated purchase motivations can be the difference between success and failure.”

When the local norm is to let your children run free, wrapping them in plastic is not seen as an act of parental kindness. But all this changed a decade later, when P&G re-launched with the campaign “Golden Sleep,” which claimed babies in diapers sleep better, helping them develop faster and achieve more at school. Behavior change was an essential step on the road to success, but the key to implementing that change came from something else. In the early 2000s, a mother’s desire for her child to sleep well was rooted in her most fundamental desire at that time: for the child to perform better and ultimately to succeed. Today, the diaper industry in China is worth $8.24 million and is enjoying a projected growth of 7.1 percent per year. It pays to understand your target’s motivations.

For all Western brands adapting for China, understanding such deep-seated purchase motivations can be the difference between success and failure. When Marks & Spencer entered the Chinese market, the company assumed its TV dinner propositions (synonymous in the UK with quick, convenient ‘home-style’ comfort food for one) would appeal to the Chinese as an exotic alternative to their own comfort food. However, the ready meal space is crowded in China, from convenience stores offering facilities for the preparation of noodle and microwave dishes on-site, to increasing numbers of Hema stores in which a chef will cook anything you buy for you on the spot. Additionally, it goes without saying that British comfort food is not Chinese comfort food, nor is it necessarily the kind of British food that Chinese people like to try and find ‘exotic.’ As The Financial Times reported upon closure of the majority of the brand’s outlets, “they had existing chains in Hong Kong and Malaysia, and they assumed the model would work for China,” said Matthew Crabbe of consultancy Mintel, adding that “they didn’t really adapt to the needs of Chinese consumers.” Marks & Spencer had failed to reconcile the brand’s distinct role in China with a new set of consumer needs and motivations.

Appearances can be deceiving

Brands capitalizing on industry trends in Western markets often see the same opportunities in China. However, to assume the trends are gaining traction with Chinese consumers for the same reasons as their American or European counterparts would be short-sighted. In beauty, for example, male makeup is gathering momentum around the world and global brands are increasingly looking for a slice of the male cosmetics industry. In Western markets, this growing demand is often attributed to increasing gender fluidity—the demise of the “macho man” stereotype having opened opportunities for creative experimentation. Not so in China, where articulations of the macho man stereotype, though again vastly different compared to the West, can still live in harmony with the concept of male makeup.

For the Chinese, male makeup is just another method of self-improvement, and any man who goes to the gym or studies hard to get a better job is just as likely to embrace BB creams, eyebrow pencils, and even eyeshadow as additional weapons in his arsenal. From packaging design cues to marketing and influencer strategies, this necessitates a very different approach than a Western male makeup brand. As Jiaqi Luo of Jing Daily writes: “Top-notch [Western] male beauty influencers such as James Charles and Gary Thompson (known as the “the plastic boy”) are mostly gay men, and most of their advocacy promotes inclusivity or ‘freedom of expression.’” A brand like M.A.C., for example, emphasizes its openness to all genders in China as it does in the United States, but its male models are typically K-Pop stars such as Zhang Yixing sporting black jeans and bling jackets with makeup used to accentuate his natural features. The experimental glamor and eccentricity of Patrick Starrr’s Youtube collaborations with the brand in the United States speaks to a radically different conceptualization of the role of male makeup in society.


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Chaumet’s New “Mulan” Approach in China

From creating crowns for Napoleon to being the only jeweler on display in the Louvre, the French jeweler Chaumet has enjoyed over 230 years of impressive history. “But if Chaumet just belongs to the past, nobody today will be interested,” says Jean-Marc Mansvelt, CEO of Chaumet. “The brand aspires to connect with the present and tell its rich stories to the young generation.”

However, this can be a challenge in China, especially considering that Cartier entered the market in the 1990s, while Chaumet arrived nearly a decade later. While their competitors opened lots of stores and aggressively marketed in the country, Chaumet waited patiently. Then, in 2017, Chaumet mounted its first-ever exhibition at Beijing’s Forbidden City, drawing over 500,000 visitors within three months. The collaboration was lauded, but to take advantage of China’s massive millennial and Gen-Z populations,  Chaumet needed to create a contemporary image that could inspire today’s Chinese women. But how?

Tell the Mulan Story

This past July, Chaumet made the global announcement that Chinese actress Liu Yifei would be the brand’s new ambassador. This was particularly surprising to many because Mansvelt said in 2018 that “Chaumet will not appoint a celebrity ambassador, because the brand’s blue blood heritage, distinctive Parisian style, the art of jewelry creation, and all the clients it has served are the [true] ambassadors.”

But Liu is special as she plays Mulan in the upcoming Disney film of the same name. Since Chaumet describes its brand spirit as “grace and character,” who better than Mulan to inspire young Chinese women to become heroes in their own fields? As the Napoleon story is impressive but distant, Mulan has offered the French brand a more natural and vivid context for Chinese can relate to.


Liu Yifei stars in Disney’s Mulan. Photo: Courtesy of Disney

Awaken the Princess and Queen

While many brands pay attention to how women in China like to shop and have fun, Chaumet goes beyond the surface to understand what they’d like to become. As women in China receive more education, they’re no longer satisfied with traditional roles. When they embark on a journey to find themselves, they aspire toward enlightenment. “Awaken the princess and queen within” is how Chaumet is encouraging women. Chaumet continues in the ambassador’s announcement, stating, “Be the princess who lives gracefully and enjoys life to the fullest; be the queen who tackles critical challenges with ease and takes control of her own destiny.”

This interpretation is a perfect match with Mulan, who is simultaneously a princess (the first-ever Chinese one from Disney) and a fearless fighter, providing spiritual guidance to today’s Chinese women. After all, the true influence of a luxury brand lies in its power to inspire fans to live out its spirit. Liu’s response on Weibo was also inspiring, where she wrote, “Together with Chaumet, we can crown every beautiful self.” As the original crown master, Chaumet has created over 3,000 crowns throughout its history. But today, a crown has taken on a new interpretation. A crown is no longer just for nobles or an honor bestowed by royalty. Graceful and brave women can “crown” themselves to celebrate every success in life. It is self-empowerment.

Connect with Chinese Culture

The Chinese are more subtle in expressing emotion, and that cultural difference has held sway over their jewelry preferences. One anonymous respondent wrote under the question “What is Chaumet?” on China’s knowledge-sharing platform Zhifu, “As a jewelry salesperson, I noticed some clients came to check other brands. But once they encountered Chaumet, they changed their minds. I have to agree with their choices. Some brands almost want to engrave the Chinese words ‘I love you’ on their wedding rings, which is a bit too blunt. One Chaumet design that is particularly popular among Chinese clients is a ring with a little diamond hidden inside, which is hardly noticeable to outsiders. This private and discreet design has a rich meaning too, that is, keeping you inside my heart.”

Cartier’s Trinity, on the other hand, has three rings superimposed on each other as a symbol of three kinds of love: family, friends, and partner. This concept is straightforward, yet it lacks complexity for a Chinese audience. In comparison, Chaumet’s Liens concept can be easily understood by Chinese as “Yuanfen” (beautiful connections in life), and it even fits into Chinese philosophy in a broader sense. Such invisible threads go beyond the obvious connections with loved ones and extend to other connections: the surroundings and the universe. In early 2019, when Chaumet launched its first WeChat pop-up store, The Liens were chosen as featured products, and they sold out in three days. So while Chinese millennials value independence, it’s good to remember that they also desire authentic connections.


Chaumet 2019. Photo: Courtesy of Chaumet

Feel Free and Playful

Traditionally, jewelry is for serious occasions like weddings, which can be a restriction to the brand while offering a far-off feel for younger generations. But in recent years, Chaumet has been revamping its brand image. While staying with the concept of grace and character, it has also been expressing vibes of freedom, as exemplified by their recent use of elegant models on roller skates.

For this year’s Qixi (Chinese Valentine’s day), Chaumet launched a second WeChat pop-up store, allowing customers to measure their finger sizes in 360 degrees, virtually try on jewelry, and invent creative and casual styles for daily scenarios. Chaumet claims that true luxury is to “zi zai yu xin” (feel free at heart).

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Sneakers Are Booming in China — Here’s Why It Matters for Luxury Brands

In July 2019, the American marketplace for limited edition sneakers, GOAT, made clear its intention to capitalize on China’s 400 million millennials. The website, one of the biggest platforms for the C2C resale of high-end footwear, announced the launch of a China-specific app, a WeChat Mini Program, a Hong Kong distribution facility, and a Shanghai event featuring NBA stars and deals on their “rarest and most exclusive” sneakers.

It was a move that typifies the recognition among many Western businesses that Chinese consumption of rare apparel and footwear has become as significant as more traditionally established markets. Crucially, the millennial and Gen Z shopping behaviors that are driving this investment have moved away from disposability in favour of occasionally worn, highly priced editions.

Although the market for exclusive sneakers and streetwear began as a DIY subculture in the U.S., its designers and brands have become a serious draw for luxury fashion houses seeking to leverage its credibility. Off-White’s Virgil Abloh has ascended to the head of Louis Vuitton Menswear, Shanghai’s Yeti Out collaborated with Coach, and Kim Jones of Dior Men’s has even worked with KAWS to produce a highly sought-after collection. Similarly, GOAT’s fellow resellers Stadium Goods, which was recently purchased by the online luxury fashion marketplace, Farfetch, while the StockX website was valued in the New York Times at more than $1 billion. With Abloh’s Nike Air Max 90 collaboration currently being sold on StockX for almost nine times their initial price, this is a consumer set willing to invest in the right products.

Streetwear, Sneakers, and Chinese Consumers

The market for these goods is already established in China, where young streetwear enthusiasts have fuelled a demand for exclusivity as part of China’s$9.5 billion athletic footwear market (the world’s second largest). According to figures from Transparency Market Research, the Asian footwear market will continue to expand, with Chinese millennials set to constitute up to 69% of the market by 2021. GOAT’s founder, Eddy Lu, has admitted that China, which is the company’s biggest international market, is vital for growth. “The sneaker community has grown tremendously in China, especially with the rise of basketball and hip-hop culture.” Accordingly, Lu continued, “we believe China is the perfect market to begin our global expansion.” For luxury brands targeting this big-spending set of young sneakerheads, understanding their emergence is key to unlocking their market potential.

Insights from Chinese Sneaker Culture

Sales of luxury goods in China already constitute over a third of the global market, and projectionssuggest that it will reach 44% by 2025. McKinsey’s 2019 assessment of this phenomenon leaves no doubt who will be behind this future rise, making the observation that, “China’s affluent post-1980s generation is fuelling luxury buying right now. They grew up as China emerged as an economic power and are now at the peak of their career and earnings.”

But while the demand for exclusive goods is primed by economic growth and the generational shift to a younger audience, this is only part of the story. According to GOAT’s Lu, their recent $100 million investment from Footlocker will be used to push into the Chinese market with an acute awareness of the need for cultural specificity. To capture the attention of collectors of limited Yeezys and Jordans, brands require a native offering that eschews cookie cutter approaches. Lu commented,”We know China is a unique market and if we use the same strategy as the U.S., we’ll likely fail.” He added, “We are building this product with a local team in order to provide the Chinese consumer with a better, more personalized experience.”

It’s a view shared by StockX’s CEO, Scott Cutler, whose estimate for the billion-dollar company is that “20% of the market is in Asia, with about 11% of that in China.” Cutler suggests, “we already have a material amount of our buyers coming from China,” and although much of this is in English, the future looks different. Cutler reveals, “We’re introducing local payment methods later on this year. We’ve got Alipay and we are working quickly to be able to launch a native, localized language experience. We see tremendous growth (as we’re able to provide localized support and localized payments) in providing a native Chinese experience.”

Cutler is clear that there are several distinct reasons for the growth of this market, and so for the need to cater to young Chinese buyers. Primarily, Cutler observes, the strength of the Chinese economy is at the root of streetwear’s popularity. “Obviously there’s the rise of the stronger consumer in China over the last decade.” But, he continues, “there’s also been a really significant rise in certain brands in sports and fashion. So, the NBA’s an example of a really strong presence in China. After Yao Ming there has been a lot more Chinese who embraced that world and began following players and teams. So, sneakers, in that example, are an outgrowth of sports.” This love for the NBA, which now has 150 million Chinese social media followers, is mirrored in brand popularity for Chinese buyers on StockX, which he ranks in order as “Jordan, Adidas, Nike, Supreme.”

Alex James, founder of the streetwear brand Pleasures, spoke at Shanghai’s Innersect conference of how this broadening of appeal has also been enabled by the way “the government has really loosened up over the years.” According to James, even outside of Shanghai and Hong Kong, the whole scene is driven further by “rappers in the US, K-Pop stars in Korea, rappers in Japan.” For him, spending is now occurring across limited edition, luxury brands, and vintage, because, “people want to mix together different influences and show what they’re into.”

For luxury brands with similar desires to increase their appeal in this market, then an attention to the cultural interests of their target demographic must be considered. Likewise, in addition to the content, consumption of high-end goods is driven by the delivery method. StockX’s Scott Cutler sees the role of social media as crucial. “When we see Chinese influencers would wear a particular brand of shoe and highlight that on social media, we’re able to see a significant and almost immediate demand for that particular sneaker. Then people go out to try and find it; where can I find that shoe, who has that available.” Part of the success of companies like StockX and GOAT then derives from the fact that, as Cutler relates, “those shoes are always available, they’re never sold out.”

What can be learned from the growth of street wear and exclusive footwear is that Chinese Gen Z and millennial buyers respond to brands that offer them limited edition goods in a way that grants them constant access through their own preferred communication channels. Perhaps the final insight though belongs specifically to companies like GOAT and StockX as it concerns the issue of authenticity. According to Pointer Brand Protection’s Fiona Gao, one problem that may have hampered the growth of many luxury brands in China has been the lack of a trusted infrastructure.

Gao suggests, “People know that the supply chain is already compromised by fakes and that limited availability invariably leads to counterfeits. For consumers who really want these exclusive products, this has proved off-putting.” This may be one of the reasons for StockX’s position in Asia according to Cutler. “The fact that we stand in the middle and authenticate drives trust and transparency to a much higher degree, so we’re the first stop for buyers in the marketplace looking for these items.”

Ultimately, the gamble being taken on Chinese expansion by companies like GOAT may succeed for just this reason, and it may also prove profitable for other brands who can learn from their lesson. Gao continues, “for brands to succeed they should see the development of trust-based marketplaces as something to emulate. If they can provide similar guarantees of authenticity at every stage in a product’s lifecycle then they may also be able to increase trust and sales.” Whether luxury brands are ready to offer verification services to resold items is unclear given their desire to limit availability, but the market will be watching closely for how well GOAT, StockX, and others proceed with the marketing of their trusted exclusivity.

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