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Cat walk fashion on the high street
A woman in a chic hot-pink knee-length dress with a gauzy
scarf thrown over her shoulders walks purposefully into Shanghai's
Chanel boutique. She may as well have drawn a big money sign
on her back; certainly, it looks like Chanel may have played
their cards right when they, along with dozens of other luxury
brands, opened boutiques in Shanghai and Beijing to cater
to the newly-rich-and-desperate-to-show-it crowd. Susan Ranjard,
communications manager for China at Chanel estimates that
over the last five years, nearly eighty percent of the world's
international luxury brands have jumped into the China market.
There's just one problem: this woman is the only customer
in the store. For that matter, she's one of the only shoppers
in the entire Plaza 66 mall, located in an ultra-modern steel
and glass skyscraper that claims the distinction of tallest
building in Puxi. The Palace Hotel, the locale of choice for
Beijing-based luxury boutiques, suffers a similar dearth of
shoppers.
Fashion experts say that China's luxury goods market is not
mature, and even the brands themselves agree. However, despite
the lack of crowds, no one wants to be left without a piece
of the pie when this potentially monster-sized market picks
up. "I think a lot of the brands feel that for their global
image it's important that they have a flagship store in China.
But is the market ready? Not quite," admits Ranjard.
That's not to say that brands don't have a rosy future here.
Post-open-door policy, China's appetite for consumption has
developed at a dizzying rate. And the brands have already
made a deep impression on the Chinese mindset, if not the
Chinese pocketbook.
In terms of brand development, piracy, surprisingly, might
have been the biggest boost to the luxury market. Before Fendi
even had a store in China you could buy a "Fendi" bag at Shanghai's
old Huating market or Beijing's infamous Silk Alley. For years
brands had been getting free advertising in China before they'd
even invested a cent. "When you can sell the fake products
so well out on the street, it means there is already a very
strong fashion consciousness," says Shaway Yeh, a former fashion
reporter and editor in Hong Kong, "The brand has already been
imprinted on people's brains." Ranjard says that Chanel was
surprised to find that the brand was already well-known before
they even entered the market, thanks, no doubt in part, to
pirated goods.
Amelie Mongrain, program director of the fashion design department
at Shanghai's Lasalle-DHU International Design College, says
that brands have learned to live with the black market. "There's
not so much fear of being copied anymore, they just have to
accept it as a marketing tool."
However, after years of bombardment with everything but the
real thing, some Chinese are starting to want the real McCoy.
"I would feel so cheap if I were to buy a fake purse," said
Audrey Xu, a student in fashion marketing at the Lasalle school,
"If I have the real product I feel more confident, I feel
like a real person."
The fashion enlightenment has come from many sides. A lot
of growth has been led by the tsunami of fashion-focused media
that has flooded the market in the past few years. Whereas
ten years ago only a handful of state newspapers were available,
now newstands are overflowing with glossy fashion magazines
and periodicals. Many newspapers have fashion sections and
Shanghai even has a 100% fashion channel which broadcasts
all the latest trends abroad. The Internet has also contributed
greatly to fashion education, say students at Lasalle-DHU,
who say they learn about the hottest new styles online.
The growing number of pop stars, models and actors has contributed,
as well. "Celebrities have the biggest influence on fashion
awareness," says Xu Hui, an amateur fashion designer in Beijing,
"they can lead a whole generation into a specific kind of
life."
All the focus on style has definitely led to a new attitude.
Seven years ago when Lucy Ye, a woman who owns several small
boutiques in Shanghai, first got into fashion, she says that
it was a snap to sell clothing. "People would buy almost anything,
as long as it was new, it didn't matter if it was a good fit
for the person." Nowadays, people have gotten much more demanding.
Wang Ping, from Chanel in Shanghai, says that women are more
independent now, they want to have their own unique beauty.
"Ten years ago, Chinese women thought that anything new was
fashion. This showed that fashion culture was not mature yet,"
comments Wang, "For example, in the past many Shanghainese
women liked to get huge perms and use a ton of gel to make
the front really big, this was called fashionable. Now we
would find this ridiculous. These days women pursue individuality
and uniqueness."
Now that women know what they want, they're a lot more confident
about getting glamorous, comments Mongrain, who has been in
China for six years. "I've noticed a big change over the years.
Now, Chinese are not afraid to dress up, especially Shanghainese,"
says Mongrain. "While Westerners would only get really dressy
at night, if the Shanghainese girls wake up at 9 am and feel
like wearing their sparkles, they will."
So who are these sparkling fashionistas? "Our consumers are
85 to 90 per cent local," says Ranjard, "Many ladies in Beijing
are the wives of officials and we are also getting more and
more young entrepreneurs." Meanwhile there's also a contingent
of bored provincial moneybags who fly into the big cities
to do a bit of mall shopping. Yeh, who is now marketing communications
manager at Beijing's Grand Hyatt, says "Shanghai shoppers
are all the rich tai-tais. But in Beijing, I hear the people
who spend the most money are rich ladies coming from Dongbei
because there's nothing to buy up there."
Okay, you're a rich Dongbei woman with a lot of extra cash,
why do you want to spend it on an Hermes scarf when you could
get a generic but high-quality one for 1/50th the price in
Hangzhou? One of the reasons is that standing out in China
often has to do with showing your affluence. Everyone has
heard the jokes about businessmen who keep the sleeve labels
on their expensive suits and we've all witnessed the popularity
of products with brand labels all over them. Luxury brands
benefit greatly from the Chinese obsession with flashy displays
of wealth.
Guan Pei, editor for Chen Yifei's monthly fashion tome Vision,
says that on a recent trip abroad, she noticed that products
with hugely conspicuous labels were snapped up by Asian buyers
while more subtle luxury items were bought by Europeans. However,
she can understand the mindset. "China went for too long wanting
things, needing material things, so it's like giving food
to a starving person, it becomes the focus of their lives."
This desire for ostentatious displays of wealth could eventually
make the China market one of the biggest gold mines in the
world.
But before we get to the end of the rainbow, brands still
have a bit more waiting in their empty malls. There are still
a lot of issues holding up China's jump to something like
Japan-style craze for fashion or even European demand for
the highest quality.
Part of the problem is pure economics. But it might not be
the economic problem you first think of. Despite the fact
that only a tiny percentage of Chinese can afford haute couture,
even a tiny percentage out of 1.3 billion is a gigantic number,
surely enough to sustain a few luxury boutiques. The real
hold-up lies in high tariffs imposed on luxury items coming
into China as well as the bureaucracy involved in getting
products into China. Consequently, the country's boutiques
are not only often behind in stocking the newest items, they
also have comparatively high prices. Price tags in China are
around fifteen percent higher than Hong Kong, which, unfortunately
for the China-based stores, is just a hop and a skip away.
Travel agents now even offer 3 or 4 day special shopping trips
to Hong Kong, which are very hot tickets especially during
the Christmas sale season.
The price differential should be resolved within the next
few years, say brands, as WTO pushes China to lower tariffs
and reduce the hurdles for foreign companies doing business
in China. And besides, comments Ranjard, not everyone wants
to fly to Hong Kong all the time to save a few hundred yuan,
"Our customers are mainly women and it's a well-known fact
that when they go shopping they want it right there and then."
Another hurdle for brands is dealing with a country that
is so divided in terms of culture from region to region that
Ranjard says Beijingers and Shanghainese "are almost like
two different races." She says that the product ranges for
Chanel's Shanghai and Beijing stores vary as widely in between
them as they do with Hong Kong.
"People in Beijing tend to be more low-key," says Yeh, "but
Shanghai is quite different, they are not afraid of flaunting
their wealth." The consensus is that while the Shanghainese
are known for chasing the latest trends, Beijingers, consistent
with their political background, are more staid.
Ye, the fashion entrepreneur, says the differences in the
markets can make it challenging to appeal to everyone. "Marketing
in Shanghai, Beijing and Guangdong isn't like dealing with
different cities, it's like dealing with different countries."
Despite all the hurdles, luxury brands have made a gigantic
investment in the China market and they are here to stay.
Chanel has over 200 employees in the country and is expanding
"very very quickly, "according to Ranjard, "China is a very
long term investment and all these brands have a long-term
vision."
Hermes confirms the unwavering business strategy. "We don't
do short-term investment," says TK Lin, press and advertising
manager for Hermes Greater China Limited. "Our biggest concern
is a long-term relationship with the Chinese market and customers."
Customers would be the key word here. But if all goes as planned,
China's fashion-hungry taitais, entrepreneurs and golden collars
will be descending in droves upon the boutiques really really
soon, give or take a few years.
  
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