Why China Is Teaming Up With Russia To ‘De-Dollarize’?

What happened: Back in January, the Economist noted that the Trump administration’s “aggressive use of sanctions endangers the dollar’s reign.” And now, the Nikkei Asian Review reports that China and Russia are teaming up to ease their dependency on the American dollar. Experts highlight how this occurrence could lead to a “financial alliance” between the two superpowers.

Data from Russia’s Central Bank and Federal Customs Service shows that during the first quarter of 2020, the dollar’s share in Sino-Russian trade transactions fell below 50 percent for the first time on record. The US dollar accounted for 46 percent of settlements between the two powers, euro currency soared to an all-time high usage of 30 percent, and the national currencies of Russia and China accounted for 24 percent of transactions.

Jing Take: The “de-dollarization” of China and Russia’s financial systems will encourage bilateral trade with their respective national currencies, helping both countries avoid weaknesses linked to the American dollar. In a time when both the federal government and US corporations “have embarked in a rapid-fire experiment in borrowing without precedent,” this de-dollarization will help Russia and China offset any possible risks associated with rising American debt and deficit. Furthermore, it will help the two countries sidestep President Trump’s sanctions and tariffs. Yet, ultimately, this alliance is notable because it could erode trust in the US dollar’s stability, which has been considered the ultimate reserve currency.

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

Source link

Are Sales Associates The New Luxury KOLs Post-COVID-19?

Back in June, Cheryl Chen, a 27-year-old Chinese bag fanatic who was eyeing this summer’s It bag — the Burberry pocket bag, stepped into the China World Trade Center in Beijing after befriending a sales associate on WeChat, so she could find out more about the bag.

From there, the sales associate actively pursued her by offering timely updates on available colors. Chen had a hard time resisting and bought the bag. Now, after being seduced by images on the same sales associate’s WeChat Moments, Chen is looking to purchase a big monogrammed Burberry tote as her new back-to-the-office bag.

By connecting with sales associates on WeChat, consumers like Chen are exposed to a new form of advertising. They can browse WeChat Moments (a page similar to Instagram) where sales associates often post the latest styles, celebrity sightings, KOL postings, and even pictures of themselves trying on products in a “natural” setting. If consumers are interested, they can consult these sales associates right away on everything from pricing and discounts to available colors.

Jing Daily learned that many of these sales associates are leveraging WeChat by sending content or products to interested consumers, and it’s proven to be a highly-effective strategy both during and after the COVID-19 outbreak.

“Since the outbreak, our store’s sales from WeChat have been double the amount of our offline sales,” said one sales assistant for a high-end, Taiwanese women’s fashion brand in a mid-May survey conducted by the digital agency CDGL Strategic Communications. “I find that the key is not the content that we share, but the fact that we stay relevant by maintaining our visibility.” She also added that her WeChat group is made up of approximately 70 people. Elsewhere during the lockdown in Shanghai, the high-end luxury mall iAMP pushed out a WeChat article that allowed consumers to scan a QR code to start a one-on-one conversation with a sales associate.

These days, sales associates are an important link to a consumer’s purchase journey. Because of the impact of COVID-19, these employees have taken on the role of making short videos or livestreams to make customer interactions more engaging and transparent. “With livestream, consumers have a lot more power and control, and they can ask questions like, ‘can I see inside the bag?’ or ‘can you style that bag with a white top’?” said Jonathan Smith, the founder and CEO of the digital marketing agency Hot Pot China. And thanks to new technology, sales associates can engage with clients at any time of day or night.

KOL-in the making 

“This is Nana from Prada China World Trade Center, here are some accessories for your summer look,” said one sales associate, as she laid six hair bands and a variety of clips on the counter. Meanwhile, another sales associate is trying on each item while the first narrates, saying, “this hair clip was spotted on [the K-pop girl band] Blackpink’s Lisa before.”

“How much are they?” says one Netizen in the comments section under this Little Red Book short video.  “Are there any mid-year discounts for members?” asks another. These three-minute videos offer an attractive pitch to consumers who may have tight budgets but still are looking to own small luxury items.

Zhou Ting, the head of research of the Shanghai-based Yaoke Research Institute, explained that it’s a natural progression for sales associates to come out from behind the counter and take on KOL roles. They are experts in their company’s products and are persuasive and credible in a way that’s different from traditional fashion bloggers. So should more luxury brands recognize this potential and promote their sales associates to be their KOLs?

Not everyone is optimistic about the idea. “I don’t see this happening in the long-term, to be honest,” said retail consultant Terry Tian, who has extensive working experience in the luxury retail sector. “At the end of the day, they are still promoting the brand they work for, so they don’t necessarily have the objectivity that consumers look for in KOLs. KOLs and sales associates also have different [types of] expertise.”

“Brands are not MCN agencies (Multi-Channel Network),” added Tian. “They would rather have their associates remain in an employee-employer relationship, and not every sales associate has the potential to become a KOL and might prefer making commissions.”

While luxury brands are hesitant to adopt, large beauty and skincare companies have experimented with this model before. Unilever hosted programs that recruited recent college graduates to become KOLs. They felt that by leveraging the brand’s traffic and resources, the students could build up their livestreamer personas while selling the company’s product in creative, interactive ways.

Though it might take a while for luxury brands to build up a system like this, Tian suggested that it isn’t impossible, since trends are leading in that direction.

To WeChat Or Not — That’s the Question 

Empowering sales associates to become KOLs is all about trust and whether both parties can commit to this long-term investment. Brands are worried that if sales associates gain access to their network on WeChat, the network will go with them to the next role once they leave. Also, sales associates are primarily interested in maximizing their commissions, while maintaining the brand image is less of a concern.

Brands are conscious about the highly personal aspect of WeChat sales, and even though it’s proving to be a successful tool, staff from different brands have received varying levels of guidance from HQs. However, with or without a brand’s guidance, fashion sales associates are adopting WeChat messaging in ways that range from private solo conversations to group chats of up to 500, as they are a powerful tool for building brand loyalty, especially post-COVID-19.

“In order to support sales staff in maximizing results and delivering a consistent brand image, brands should develop clear staff-to-consumer guidelines and communication strategies for WeChat,” as noted in the CDGL survey. Similarly, when it comes to livestreaming, maintaining the brand image should be the priority. “It’s critical to have the right brand guidelines and strategies in place before livestreaming, ”said Smith. “If it isn’t aligning with brand values, it’s a turnoff — not just from a sales aspect, but also for the brand long-term.”

But truthfully, many KOLs already take on a sales associate role, whether it’s as a fashion blogger who runs a bag drop or a livestreamer who tries on hundreds of lipsticks to better sell those products. So does a brand really need sales associates to become KOLs or is hiring savvy KOLs enough? Either way, sales associates are the first point of contact representing the brand to consumers, so every interaction matters. So instead of simply investing in hired KOLs, perhaps brands should look to sales associates to help them maintain brand loyalty and survive the post-COVID-19 era?

Source link

Trump Order Bans TikTok and WeChat, Escalates China Tension

On Thursday night, President Donald Trump issued two executive orders that will ban TikTok and WeChat from US operations in 45 days if the applications are not sold by their Chinese-owned parent companies, ByteDance and Tencent. Both orders cite national security concerns and would bar “any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States” with ByteDance and Tencent.

President Trump accused the tech giants of collecting proprietary information from Americans and monitoring Chinese citizens abroad. “The spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States,” Trump wrote in a statement.

Over the past month, US-China relations have reached unrecognizable lows with the shutdown of consulates in both China and the US.  Trump’s new executive order will have untold blowback as the Chinese government is surely to retaliate.

For the luxury industry, the ban on TikTok immediately disrupts brand strategies that are looking to the rising platform to reach Gen-Z consumers. However, the real threat to brands is the larger scale political implications. With tech and politics now so closely intertwined, the modern luxury brand infrastructure that relies so heavily on digital platforms is left vulnerable to the strike of President Trump’s pen.

Source link

Kors, Versace Parent Company Survived Q1 Thanks To China

On August 5th, Capri Holdings, which is the parent company of Michael Kors, Versace, and Jimmy Choo, revealed its first-quarter fiscal 2021 results, with the global fashion luxury group posting a narrower-than-expected loss. The conglomerate’s net losses totaled $180 million compared to a net income of $45 million from the previous year, and its revenue of $451 million was a drop from $1.35 billion last year. Yet, the company’s total revenues surpassed the Zacks Consensus Estimate. Both the top and bottom lines declined sharply from the same period a year ago, thanks to the impact of the COVID-19 pandemic.

Revenues fell across the company’s three brands. Michael Kors’ revenue was down 68.7 percent to $307 million for the quarter — a drop that coincides with designer Michael Kors’ recent announcement that he will not be presenting a Spring/Summer 2021 collection at New York Fashion Week. Meanwhile, Versace’s revenue fell 55.1 percent to $93 million, and Jimmy Choo’s revenue was down 67.7 percent to $51 million. Capri did not give fiscal 2021 guidance due to uncertainty surrounding the coronavirus.

Capri’s chief executive, John Idol, discussed the impact that dramatic travel declines have had on his company, stating, “All of our regions have been impacted, as international travel has virtually come to a standstill since the outbreak of COVID-19. Tourism and travel-related sales comprise a meaningful part of our business. Tourist activity impacts our travel retail.” The company plans to keep diversifying its brands’ global footprints, with an emphasis on the Asia Market, as each of its three brands still has a larger market share in that region.

Source link

How Luxury Brands Can Profit From China’s Top E-Commerce Trend

On August 5, Jing Daily’s editor-in-chief, Enrique Menendez, hosted a webinar on how luxury brands can profit from China’s hottest new e-commerce trend — e-commerce livestreaming. The conversation featured speakers Sky Canaves, the editorial director of Content Commerce Insider (CCI); Kevin Jiang, the president of international business at JD.com fashion and lifestyle; Masha Ma, owner and lead fashion designer of MASHAMA; and Anny Fan, a top luxury KOL and influencer. Together, they covered how e-commerce livestreaming would continue to play a critical role in China’s luxury retail sector during the post-COVID-19 era and beyond.

The hour-long webinar started with a presentation by Canaves, who introduced China’s booming livestreaming industry. First, she explained how the business originated in the entertainment industry in the 2010s but saw rapid expansion in other sectors this year thanks to COVID-19.

China is home to 905 million internet users, and over 60 percent of them are engaging with some form of livestreaming. In 2020, e-commerce livestreaming became the biggest livestreaming sector — overtaking the video game industry — yet there’s still room for growth. New trends in e-commerce livestreaming continue to pop up across the industry, as celebrities, sales staff, and even CEOs have now joined the livestream hosting ranks.

Canaves then went on to highlight the risks and rewards of China’s livestreaming business. Brands must be aware that the best livestreaming experiences create a positive impression with consumers but don’t necessarily translate to sales. At the same time, livestream content innovation is highly valued and can build brand equity. Brands, she explained, should experiment with various platforms to see which one works best, and since fake traffic and sales fraud can be problems, brands need to choose their livestreaming partners carefully.

After Canaves’ analysis of livestreaming, she — along with Jiang, Ma, and Fan — dove into a discussion about the top livestreaming tech platforms and content management systems. They also debated the most strategic ways for brands to use this new marketing tool. Below, Jing Daily takes an in-depth look at three key takeaways from the webinar:

  1. Lower-tier cities in China are fueling e-commerce livestreaming 

The speakers began their discussion on the topic of why livestreaming has gone viral in China. Recently, livestreaming has become a crucial way for consumers across the full spectrum of Chinese netizens to purchase products and educate themselves about brands.

Jiang noted that China’s lower-tier cities (those outside top-tier cities like Beijing, Shanghai, and Guangzhou) make up two-thirds of the massive online consumer market in the country. “The people who live in lower-tier cities have more time to spare, less work/life pressure, and are looking for something interesting to help kill time,” he said. This group of consumers and their strong spending power is what has fueled the e-commerce livestreaming industry. The rapid development of telecommunication technology, affordable cell phones, and more convenient express delivery services have made it much easier for people to watch livestreams and place orders.

  1. Sales-driven versus content-driven livestreaming platforms

Livestreaming platforms in China can be categorized as either sales-driven or content-driven. The first category is best represented by Chinese e-commerce giants like JD.com and Alibaba. The second usually refers to tech companies like Tencent or Little Red Book. But because of greater use, the boundaries between these platform types are continuing to blur. Content-driven short video apps have been steadily moving into the e-commerce sector, while big internet retailers have been upgrading their offerings with programming that’s more often associated with video and entertainment platforms, from a whitepaper by Jing Daily and Content Commerce Insider (CCI) titled Next-Level Livestreaming: How Luxury Brands Can Stand Out to Drive E-Commerce Sales.

At this point, Fan went on to share her livestreaming experiences on both types of platforms, using Tmall and Little Red Book as examples. She concluded that Tmall is good for presenting product features, while Little Red Book is handy for heightening brand awareness and collecting genuine user feedback. She felt that livestreaming shortens the distance between KOLs and followers and is a great way to engage with fans. When it comes to choosing the right platform, Jiang noted that massive platform traffic doesn’t necessarily mean higher conversion rates, so brands must be aware of each platform’s target audience when choosing a platform.

  1. There’s no such thing as ‘the right’ KOL

As more and more hosts hop onto livestreams — including celebrities, CEOs, salespeople, and even virtual idols — how to choose a KOL to best represent your brand is now a concern. “There’s no such thing as the right KOL,” said Ma, adding that every KOL has their own livestreaming style, and some might not be the best fit for a luxury brand. Therefore, just because a KOL has a massive fanbase, that doesn’t necessarily mean they will deliver a greater sales performance. Fan added that the KOLs have to be familiar with a brand they’re promoting in a livestream.

Jiang concluded that brands should allocate their budgets wisely, and they shouldn’t expect one livestream or KOL to make a massive difference for their brand. Building brand awareness, he said, requires a systematic marketing matrix that includes articles, short videos, and advertisements. Livestreaming is simply one of many available tools.

Source link

Tencent Seeks Greater Share Of China Tech Market

What happened: Tencent Holdings Limited (“Tencent”) sent a preliminary, non-binding offer to acquire the search engine operator Sogou for $2.1 billion. According to a press release, Tencent intends to finance the proposed acquisition with cash, and it is offering $9 in cash for each outstanding ordinary share, including ordinary shares represented in American depositary shares of Sogou that aren’t currently owned by Tencent or its affiliates).

Meanwhile, Bloomberg reports that Tencent Holdings Ltd., which owns a 37-percent stake in the gaming leader Huya Inc. and 38 percent of DouYu International Holdings Ltd., is seeking a merger between the two dominant gaming industry players.

Jing Take: This strategic move proves that Tencent is intent on becoming one of the world’s largest video game-streaming service platforms and that it’s also eyeing new opportunities in content marketing that could drive leads and sales. The Sogou buyout could offer it the opportunity to consolidate the search functions of its messaging and its social media platform (WeChat) while inhibiting competition from both Baidu and ByteDance.

Also, by integrating Sogou’s Mobile Keyboard app, which is the largest input app for Chinese characters and includes both voice typing and searches, Tencent could soon be able to reach consumers who are too lethargic to type their queries. That would give Tencent the use of even more consumer data for its data-driven marketers. Lastly, the move would also consolidate the company’s position in the booming smart speaker market.

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

Source link

Why Chanel’s Big Chinese TV Snub Should Concern Any Luxury Brand

Admittedly, Hermès cosmetics and handbags inhabit different worlds in terms of affordability and accessibility, but Li’s livestreamed review, which reached millions of potential buyers, goes to show that there are far more avenues for bad press in China now than there were even five years ago.

Pop culture snubs bring up interesting questions with regard to luxury marketing, specifically if a rethink is in order as to if and how luxury houses should approach the digital space in China as well as brand integrations and even e-commerce. While the past few years have seen many — if not most — luxury brands becoming at least somewhat active on Chinese social media platforms such as WeChat and Weibo, relatively few have invested in the e-commerce livestreaming bandwagon or explored short video.

But brands are being dragged into the online space as Chinese shoppers make more purchases closer to home and look to domestic shows and livestreamers — rather than international celebrities, for example — to guide their purchasing decisions.

As Bloomberg pointed out earlier this month in an article on how luxury spending is essentially “trapped” within China’s borders as a result of coronavirus-related travel restrictions, “In the past, luxury houses were worried about diluting brand prestige and losing control of customer data by working with Chinese internet giants like Alibaba, but the urgency of reaching Chinese shoppers has now eclipsed those concerns.” But simply launching a livestream with an influencer isn’t enough. Louis Vuitton recently discovered that a negative pile-on can quickly ensue if the production value of a livestream fails to match up to brand image.

This has been a very difficult summer for luxury in China, as brands contend with potentially damaging and unplanned cameos on TV or livestreamed broadcasts, as well as the perennial risks of counterfeit products, government censure and regulations, and the high costs of maintaining brick-and-mortar stores in China, all while the European boutiques typically filled with Chinese tourists sit mostly empty.

Facing the prospect of ending up as a punchline on a popular television show or being “cancelled” by a red-hot livestreamer, so many questions remain for brand marketers. Do luxury brands now need to be as aggressive online as their mass-market counterparts in China? How can exclusivity be maintained if a brand works with a livestreamer who hawks everything from gemstones to preserved eggs in a particular segment?

Or is the hands-off approach taken by Hermès — staying silent amid either good or bad press — the right one, given an ever-changing news cycle and a firehose of reviews by livestreamers or bloggers or brand cameos a viewer sees in a given week?

Source link

Why Are Chinese Travelers Not Buying At The Airport?

As a fashion reporter focused on China, one question that I keep coming back to while writing about the virus-battered travel retail market is: Do Chinese travelers still shop at the airport? Last week, as I flew from New York City to Shanghai via Amsterdam, I finally got the chance to see for myself during my layover at Amsterdam’s Schiphol airport, one of the few routes that Chinese nationals can take under international travel restrictions. 

Many Chinese travelers transfer in Europe under international travel restrictions. Photo: Yaling Jiang

The shops at Schiphol were open when I made it to the hall around 7:40 am last Monday. A kaleidoscope of luxury shops: Hermès, Bottega Veneta, Burberry, and Rolex flanked rows of lounge seats, but there were more people sitting than browsing inside the stores, which compared to stores in most cities with reduced hours after reopening, the Schiphol stores were operating under extended hours from 7 am to 10 pm.

I sat across from the Gucci boutique, where the brand’s Chinese New Year series featuring Mickey Mouse was displayed at the most prominent spot. Over the next hour, 11 people went in and out and two of them made purchases, which was the largest foot traffic among the row of luxury shops I was near. But Chinese shoppers were few and far between.


The Gucci boutique attracted the largest foot traffic among the row of luxury shops when I sat near for an hour, but Chinese shoppers are few and far between. Photo: Yaling Jiang

When I arrived at the boarding gate for my flight to Shanghai, operated by China Eastern Airlines, I finally knew where all my fellow Chinese travelers were. Out of a few hundred, almost one-fourth of them were in full gear: disposable protective clothing, N95 masks, goggles, plus a plastic face shield — the cherry on top. It was the very same package that my mother mailed to me in early February, long before New York City’s shutdown. 

COVID-19 has hit the travel retail sector hard, which has been reflected by the rock bottom first-half 2020 earnings results. On July 27, the day I departed New York City, LVMH noted in their half-year financial report that the halt of international travel has “severely penalizing travel retail.” As a result, revenue for the Selective Retailing sector, which includes the DFS business, dropped by 33% and its profit shrunk by 143% when compared with the same period in 2019. Kering, which owns Gucci and Bottega Veneta, cited the “almost stoppage of travel retail” the next day as a main reason for its 49.3% second-quarter sales decline. 


Out of a few hundred, almost one-fourth of my fellow Chinese passengers are in full protective gear at the boarding area. Photo: Yaling Jiang

While early signs show some revenge spending in mainland China, many Chinese consumers have remained less enthusiastic about shopping while traveling, reasonably so. Flying used to be an enjoyable experience; vacuum of time where no one expects anything from you, with built-in time to shop and try on cosmetics. But now, Chinese travelers are overwhelmed with anxiety and fear. And not just for our lives; we fear that we may not be able to even get on the plane, which makes flying the opposite of relaxing. To qualify for flying, we first have to:

  • Answer a digital questionnaire through a WeChat Mini Program for at least 14 days before the flight, it includes questions like temperature and symptoms. 
  • Some, like me, who slipped up and ticked the wrong box and spent the last week calling the irresponsive embassy and consulate, where we were told to get a COVID-19 test and report 72 hours before the flight as most test centers in New York City can only churn out results in 10 days.
  • When you are about to take a breather after having successfully checked-in, you find another person eager to take your temperature at the walkway to the plane and realize that you can still be turned away.

I don’t think anyone wants to go through this with an armful of shopping bags.

Even after that, I was surprised when I stepped onto the plane for my flight to Shanghai. All the flight attendants were wrapped from head to toe in full protective gear, leaving only a sliver of space for them to see. The food — basically chips and Kit Kat bars for the 11 hour flights — was prepackaged and left on each seat. As I sat down, one of the attendants started going to every seat to fill in another digital questionnaire for border control. 

These days, Chinese travelers don’t fly to travel, they fly to get the job done. Although it is done for a good reason; this is why the majority of China can enjoy the “new normal” and go to public places without masks. 

As I left the plane, I was welcomed by another COVID-19 test in a makeshift test center, swabbing both of my nostrils and throat. In that teary moment (it hurt), my summer in New York City felt like a lifetime ago. I know I need to think less about the strict 14-day hotel quarantine ahead, and instead focus on the almost normal life I get to have on the other side, where I can finally relax. 


Passengers on my flight are welcomed by Moncler Genius ads at the luggage belt. After this point, we will be dispatched to different quarantine hotels. Photo: Yaling Jiang

Source link

Can Meituan Go From Delivering Groceries to Delivering Luxury Products?

What happened: While Alibaba retains a 1.48% stake in Meituan, a Chinese group buying website for locally found food delivery services, consumer products, and retail services, the relationship between the two giants have soured after the Beijing-based app joined Tencent. Furthermore, since Ant Financial announced its intent to grow beyond financial services and create a digital ecosystem, the competition between the two major players has intensified.

According to KrAsia, Meituan blocked payments via Alipay as founder and chairman Wang Xing called out Alibaba in a social media post on Fanfou, the first Twitter clone in China, over the fact Taobao users can no longer pay with WeChat. Currently, Meituan accepts WeChat Pay, Meituan Pay, Apple Pay and payment services provided by Chinese banks.

Jing Take: Meituan might be famous for delivering groceries, but considering that the app serves more than 3.6 million merchants and reaches 400 million customers nationwide in 2,800 cities, it has become a highly attractive target for foreign brands. Furthermore, the launch of the global delivery platform “Meituan Delivery” is opening the company to new industries and sectors. And premium and high-end global brands are noting this opportunity.

Taking into account that Alipay is considered a mainstream electronic payment method and the vast majority of global and premium brands trust its payments infrastructure, Meituan risks losing partnerships with foreign sellers if it bans the Alibaba-owned online mobile payment platform. In other words, a crackdown on the use of Alipay can have serious implications on Meituan’s expansion strategy in new industries and segments.

Considering that until recently, Meituan was associated with group buying, the app needs to build a trusted partnership with a vetted veteran like Alipay, for example, if it wants to win over premium brands and international retailers that are still skeptical about a possible collaboration.

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

Source link

After a Tough Q1, Ralph Lauren Expects A Full Recovery in Q2 For China

Luxury lifestyle group Ralph Lauren Corporation reported $487 million in revenue for Q1 of fiscal year 2021, down 66 percent compared to $1.4 billion a year earlier, missing analysts’ expectation.

The group, which owns an umbrella of Ralph Lauren brands, Club Monaco, and Chaps, suffered from COVID-19 disruptions across the board. “Our financial performance this quarter reflects an unprecedented three months of COVID-19-related impact around the world,” said president and chief executive officer, Patrice Louvet, in an earnings call on August 4, adding that the group is trying to improve core strategic focus areas and realign resources. 

When asked about these core strategies on the call, Louvet noted that one area of the group’s focus will be on connected retail, which includes digital clienteling, buy-online-pick-up-in-store, buy-online-ship-in-store, and virtual appointments. “Chinese mainland situation is probably our best example to bring all that to life,” he said. Sales in mainland China is on track to return to pre-pandemic growth levels in Q2, according to the group’s earnings release.

Like its peers, the group has turned to digital in the first quarter upon massive store closures due to the pandemic, although results vary across regions. “We take a digital-first lens for everything we do, whether that applies to how we interact with the consumers, how we interact within our teams,” Louvet said, adding that Ralph Lauren Purple Label recently had a successful virtual showroom, while the group’s designers have also tapped into 3D design technology. 

In the first quarter, Asia led the pack regarding sales growth in e-commerce at 68 percent, with Europe trailing behind with a growth rate of 44 percent. The group’s largest market, the North America region, saw a three percent increase in e-commerce sales in Q1, while its brick and mortar store sales took the hardest hit, reporting a 77 percent decline. 

Looking forward, Ralph Lauren executives are cautiously optimistic about the upward trend in performance in the second quarter, which ranges from July to September. “Q2 revenue will continue to see an improvement, but recovery will proceed at a more moderate pace than the rate in Q1,” said chief financial officer, Jane Nielsen. 

So far, nearly all of Ralph Lauren’s stores are now open worldwide, although they are operated under limitations, per the earnings brief. 

Meanwhile, Ralph Lauren’s stock price dipped by eight percent  after releasing its earnings, then slightly recovered and closed at $66.68 on August 4. The group’s shares have dropped as much as 45 percent since COVID-19 began to sweep through the world in late February, while the S&P 500 Index was down only by two percent during the same period.

Source link