China’s Holiday Spending Plunges; Blackpink Picks Chinese Designer; Moncler and Lemaire Launch Tmall Store
Main topics of today:
China’s Inbound Holiday Spending Plunges to 44% of Pre-Covid Level
BLACKPINK picks Chinese designer - Windowsen - First Chinese Label Chosen by All Four Members
Lemaire and Moncler Join Tmall Pavilion to Launch Official Online Store
China Still #1 Market for French Cosmetics Despite Covid - but growth slows
Coach and Michael Kors Join Hands with Poizon betting on Chinese Gen-Z
Note: the format of this newsletter is heavily inspired by Bill Bishop's wonderful Sinocism newsletter. I highly recommend it for the highest quality news about China.
1. China’s Inbound Holiday Spending Plunges to 44% of Pre-Covid Level
The first week of October is China’s National Day Holiday, also known as “Golden Week”. There were 422 million tourists in 2022, a further decrease of 18% from last year. The revenue generated also dropped by 26%, which means less than half (44%) of the pre-covid level in 2019. Many Chinese families chose “staycation” or “traveling” without leaving the city (going to parks or nearby camping) to avoid the risk of being held in random lockdowns that could disrupt the holidays. The strict restriction is not a huge surprise considering the upcoming Party Congress this month. Although, with the ongoing “zero covid” policy, it’s unlikely to have a “revenge consumption” like two years ago. Chinese people have turned to a more rational lifestyle, trying to save more money to face future uncertainty.
“The Covid resurgence and risk of being lockdowns discouraged consumption and travel notably,” said Ken Cheung, chief Asian forex strategist at Mizuho Bank. “The zero-Covid policy has been keeping the economy under pressure and market participants will scrutinize any signals of policy tweaks after the leadership reshuffle at the upcoming 20th Party Congress,” he added.
Nearly 65% of respondents expect to increase their savings ratio in the third quarter. Compared with non-epidemic areas, the proportion of this population in epidemic areas is higher. This reflects that more and more consumers will cope with the uncertainty of future expectations by increasing their savings ratio.
2. BLACKPINK Dressed in Windowsen - the First Chinese Designer Chosen by All Four Members
Sensational K-pop girl group BLACKPINK chose Chinese designer brand Windowsen for one of their looks in the new album “Born Pink.” Windowsen becomes the first independent Chinese brand that dresses all four members. Contrary to the gloomy domestic fashion market, Chinese design brands are getting more recognition across the continent. Four years ago, sportswear brand Li Ning attended Paris Fashion Week for the first time, marking the first strong impression of Chinese design. This year, 8 Chinese designer brands attended SS23 Paris Fashion Week, a significant increase from 4 brands in 2019.
Blackpink Dazzles in Looks by Chinese Designer Windowsen (WWD, EN)
According to Sensen Lii, the designer behind Windowsen, Black Pink’s stylist team at YG Entertainment reached out to him about five months ago to borrow eight pieces for the album shoot. Lii has previously dressed Lisa for her “Lalisa” single and in the group’s “How You Like That” music video.
China’s Highlights Of Paris Fashion Week So Far (JingDaily, EN)
Although London is best known for its selection of emerging talent, Huang noted how Paris is truly nurturing more on schedule. “I am surprised and proud to see that more and more new emerging Chinese brands are also active in this market,” she said.
3. Moncler and Lemaire Join Tmall Pavilion to Launch Official Online Store
All hope is not lost; some brands still accepted the challenge: French designer Lemaire and luxury fashion house Moncler chose Tmall Pavillion to launch their official stores this October. Moncler's Asian market contributes almost half (49%) of their €2 billion global revenue. The store officially launched on October 9th, and the best-seller has already sold 100+ pieces within two days. The collaboration with actor and dancer Wang Yibo contributed significantly to the sales. Both brands invested time and effort to build awareness. Even Lemaire, quite famous thanks to the collab with Uniqlo, spent half a year creating a buzz on Chinese social media (Red) before officially launching the online store. To succeed in a tough market like China, brands need a long-term mindset.
Italy’s Moncler Sees China Sales Rebound in June (Alibaba News, EN)
Lockdowns on the Chinese mainland prompted Moncler to close around a third of its stores during April and May. However, Moncler’s performance in June showed “a strong improvement” with the reopening of all the stores, the group said in a statement.
“We head into our most important part of the year with confidence,” said Ruffini.
Lemaire Says Bonjour to China’s Luxury Market (Alibaba News, EN)
Paris-headquartered Lemaire has opened a store on Alibaba’s Tmall Luxury Pavilion, where prosperous consumers shop for premium products. Through the mobile platform or via the dedicated website, aficionados of the brand will be available to purchase from its Fall/Winter 2022 collection, along with carry-over styles, such as the Parisian label’s popular Croissant Bag or Twisted pants.
4. French Cosmetic Brands Export Grew by 19%: China Still the No.1 Market Despite Covid
From January to May 2022, as the pandemic dies out in most countries, French cosmetics exports increased by 19% compared to the same period in 2021. It’s surprising, though, exports to China still increased by 9% - Not as remarkable as the 32% increase in the US and Germany, but actually not bad considering various strict lockdowns in the most prominent Chinese cities earlier this year. China is still the No.1 export destination for French cosmetics brands, especially lipsticks. In 2021, more than 30% of the French lipsticks exported were sold in China (Austin Li, the Kind of Lipsticks contributed a lot to that). When it comes to premium functional skincare or personal care, Chinese consumers still trust bigger foreign brands than cheaper alternatives. Since May last year, China has lifted mandatory animal testing for general cosmetic brands. There are still many steps to go for cruelty-free cosmetics to sell in China, but at least a huge step in the right direction: at least the clean beauty brand Aesop managed to open two stores in Shanghai this year.
French cosmetics achieved record growth in both the US and Europe. Among them, exports to the United States increased by nearly 32% to 2 billion euros. The United States once again became the second largest export destination after China; in Europe, French cosmetics exports to Germany showed strong growth with an increase of 32%.
"We cannot ignore the impact of the appreciation of the US dollar against the euro. Now The two currencies are at 1:1 parity", said Emmanuel Guichard, General Representative of Febea (la Fédération des entreprises de la beauté).
Chinese authorities have agreed to no longer test ‘ordinary’ cosmetic products imported into China before being placed on the market. This is on the condition that manufacturers present a certificate of conformity showing that product manufacture complies with Good Manufacturing Practices (issued by the competent authorities in the country of origin), as well as a product safety assessment.
5. Coach and Michael Kors Join Hands with Poizon betting on Chinese Gen-Z
Poizon (得物, Dewu) is a social eCommerce marketplace and fashion community for sneakers, apparel, bags, etc, from designer brands and luxury labels. It’s a niche App but has attracted big names like Coach, Fendi, Michael Kors, Versace, Kering sunglasses, etc, to sell here. The platform has 100 million Monthly Active Users, and 61% are below 30 years old. It may look like Red/Xiaohongshu two years ago, but Poizon has shown more sales capacity than Red. Poizon reached a GMV of 100 billion CNY in 2021, while Red reported only 7 billion in 2020. The innate In-App trading feature makes it a potential platform to look at, especially for luxury and designer brands.
Coach Reached Official Cooperation with Poizon (Sina, CN)
Luxury brand COACH announced an official cooperation with Poizon. After officially launched, in addition to providing general collections like handbags, leather goods, and accessories, COACH also plans to provide special collection for users on the Poizon in the future. Through the in-depth cooperation with Poizon, Coach seek to further understand the younger generation in China and establish a dialogue with them through the App.
Young Chinese generation leading the marketplace toward luxury (China Daily, EN)
To attract more young consumers, POIZON also cooperated with brands to first debut trendy and new products. Last year, more than 30,000 brands debuted their 100,000 trendy new products on POIZON's app.