Fashion, Luxury And Big Coffee Come To The Ancient City Of Xi'An To Talk About Eight Major Issues Of Luxury And Retail Strategy.

Why do luxury goods sell well in China? Why is store design important? What are the consequences of constantly changing designers? Is technology so versatile? All these questions have been answered.

In May 30th, the newly opened SKP mall in Xi'an and the American fashion media "Women" s Wear Daily jointly held the second global fashion forum in Asia and the Pacific (hereinafter referred to as WWD Forum) in Xi'an, Shaanxi. The forum invited more than 250 fashion industry brands, top brands, designers and academics, including Prada group CEO Patrizio Bertelli Bertelli, chairman of the board of directors of the group of LVMH fashion group, and chairman of the board of directors and chairman of the board.

Among them, many brands were the first to enter the local market through Xi'an SKP, and the first time to explore global luxury and retail strategy in Xi'an.

In the sharing of the leading brands in these fashion industries, we find that several hot topics in the industry are focused on objects.

For example, the sustainability of fashion, the rising millennial generation, the soaring Chinese economy, the design of creative stores, the rapid development of e-commerce and new retail.

We are at the scene, sorting out the eight most important topics for you in 2018.

Asian luxury goods centers in China

The rapid development of China's economy is a fertile soil for cultivating retail businesses, especially for international luxury brands.

2018 was the 40th anniversary of China's reform and opening up. During this period, China's per capita GDP was 156 lower than that of South Africa from 1/3 in 1970s to 8848 dollars in 2017.

Yifu Lin, President of the new structural Economics Research Institute of Peking University, said at the WWD forum that 81% of the Chinese population lived in rural areas before the reform and opening up, and the state of mind in the international market was blank.

"At that time, everyone had a dream that a watch, a sewing machine, or a bicycle would be enough."

With the economic development, China contributed 30% of the global sales growth in 2008, and surpassed Japan as the world's second largest economy in 2010, which has become a truly new economic power.

Yifu Lin believes that China's economic situation is developing very fast, so we need to understand the characteristics of different income levels, and the WWD forum discusses the luxury market is to pay attention to China's high-income groups.

And pointed out that talented young entrepreneurs and technology are the main force to promote the development of luxury goods.

It has entered China since 1995.

The Prada group is deeply impressed by the development of China's economy. The group CEO Patrizio Bertelli said at the forum that there were only two stores in Beijing and Shanghai in 1995, but there were 67 stores in 2018, and the share of the Chinese market accounted for 20% of the Prada group.

"Chinese millionaires have doubled in recent years, but buying luxury goods mainly focus on tourism.

With more and more Chinese people holding passports, their strong purchasing power has begun to have an impact on the global luxury market.

Bertelli said.

Meanwhile, luxury goods markets in Japan, Italy and France began to weaken.

Wu Yue, President of LVMH group Greater China, observed the positive changes brought by the development of China's urban cluster to the retail industry.

"Especially after a large high-speed rail network, the distances between clusters began to shorten."

He said.

As the eighth cluster center of China, Xi'an has become the "one belt and one road" key development city because of the starting point of the Silk Road, and has become a new hot spot in retail industry.

In the view of President Chopin and art director Caroline Scheufele, in China, besides the traditional coastal fashion capital such as Shanghai, I believe there are other inland cities worth exploring. Now they are also optimistic about Xi'an.

"We also have plans to do exhibitions in inland cities such as Xi'an," she said. "The pace of Asian cities is accelerating, especially when the development of pnational tourism is going on, so we must continue to deepen exchanges with each other."

Anna Sui designer Anna Sui sees the habit of using electronic payment by Chinese consumers, and finds it easy to connect with the world.

"In the process of globalization, we are very concerned about the Chinese market. Only by understanding these developments can we promote our business in China."

Compared with the above, Jin Shengzhu Kim Sung-Joo, the chief prospectively officer and founder of the Santa Zhu group and chairman of MCM holding company, is somewhat different in observing China's perspective.

Her first daughter was born in China and has lived in China for many years. She has a personal understanding of the changes in China. "My children feel that the Alibaba is going to surpass Amazon sooner or later. We are shocked by the development of digitalization in China. The number of the 10 tenth e-commerce providers is amazing."

She said.

At the macro level, she believes that China's consumption volume has been greatly released from 2013 to 2015, and the number of middle class in 2017 has also increased rapidly.

"Asia is really a very young market, and China is the dominant position."

In the past, Japan, which dominates Asia's luxury goods, is still in Japan.

According to Goldman Sachs and Euromonitor, from the late 80s to early 90s, the Japanese were eager for luxury.

In 1995, nearly half of the 49 million consumer groups in Japan contributed 68% of the world's luxury goods market share, with a per capita consumption of 1996 dollars.

At that time, only more than 5000 stores under the LVMH group entered Japan.

However, according to Bain data, the proportion of Japanese luxury goods consumption began to decline continuously from 1995.

In 2011, China's luxury consumption accounted for 18% of the international market share, although Japan still accounted for 26%, but per capita consumption has begun to decline.

According to Goldman Sachs, by 2025, China's luxury consumption will account for 44% of the world's market share.

Hiroshi Onishi, the former CEO and chairman of the board of the three Vietnamese Holdings Limited, talked about the decline of the luxury market in Japan.

According to the data he showed, in 2008, because of the bankruptcy of the American investment bank Lehman brothers, Japan's financial environment was greatly damaged and had a serious impact on Japan's exports.

Between 1995 and 2008, the sales volume of Japanese entity shops fluctuated basically within 2%, while 2007 to 2011 continued to fall, with a margin of about 5%.

At the same time, Japan's retail industry is also facing the limitations of commodity classification.

At that time, people paid more attention to clothing, life and food products. Unlike now, more and more brands are emphasizing the variety of "lifestyle" products.

Hiroshi Onishi believes that the luxury industry in Japan needs to solve the problems of brand image, creativity, business and technology, and achieve all four goals in Japan.

In his view, combining the local traditional culture with the emerging digital technology, nurturing more design talents and growing up with the help of social media, this is the future development direction of the luxury industry in Japan.

Although China's luxury industry is enjoying the road that Japan has gone through, but since 2010, China's economic growth rate has dropped to about 6%, and some countries have begun to doubt China's economic development level.

Yifu Lin said that the most important thing to increase consumption is to maintain the right growth rate. "I think it is possible for China to maintain a 6% or higher growth in the next 10 years.

The income level of Chinese people will continue to rise, and by 2025, China will enter the industry of high-income countries.

This achievement will be shared with the world's retail industry.

In April this year, the Ministry of Commerce announced tariff reductions to allow more international goods to enter China.

In September this year, China will also hold its first import fair, displaying exhibitions of outstanding commodities from various countries to help them build bridges to enter the Chinese market.

Two, will there be a local version of LVMH in China?

The rapidly developing economic soil provides opportunities for international brands and opportunities for Chinese enterprises to grow.

Over the past two years, China's listed local clothing companies have begun to enrich the multi brand matrix, such as song Li Si, Hai Lan's home and so on, and gradually acquire the market by buying or launching their own brand.

The acquisition of overseas brands has become the mainstream path. For Chinese enterprises, this is an opportunity to enhance their brand image and cultivate high-end brand management capabilities, while foreign niche brands can also enter the Chinese market, and can take fewer detours under the guidance of experienced local giants.

In January 2018, Bloomberg released the "watch out for the upcoming LVMH group of China," which reads: "for the fast growing luxury giant LVMH group through mergers and acquisitions, in 2018, apart from rival cloud and Legend Group, we should also be vigilant against the rising Asian competitor, Shandong Ruyi.

In February, the Swiss based luxury brand Bally was bought from a woolen mill.

In the past two years, Ruyi has also completed 4 brand acquisitions, accumulating more than $4 billion in pactions.

At present, Ruyi group is the top 20 fashion luxury group in the world.

Facing the ambitious "China LVMH", LVMH fashion group chairman and CEO Toledano expressed their views on this "future opponent" at the forum.

He believes that many Chinese companies will understand European markets and rules when they buy international brands, and their success will be mainly due to strong financial potential.

Of course, European companies will also pursue the Chinese market and value the development of brands in China.

"I don't think this is a crisis, but a very interesting thing."

He said.

LVMH

Group Chairman and CEO Sidney Toledano

Three, high consumption groups are younger and even younger.

People call the millennial generation from 1980 to 2000 "millennial generation". This group noun has received great attention in the retail industry in recent years.

The power of young people to consume, lead the trend and create trends is becoming more and more important. Even the "Z generation", including the "00 generation", is often included in the "high consumption fashion crowd".

Today, there are about 400 million generation generation in China.

According to Bain luxury Research Report, in 2017, China's millennial generation and Z generation accounted for 50% of the total consumption of luxury goods, while the global millennial generation and the Z generation accounted for 32% of the total consumption of luxury goods.

Part of the reason is due to the development of electronic products. According to Bain data, 69% of Chinese information is obtained from the Internet, and 90% of purchases are from mobile phones.

Prada group CEO Bertelli says the millennial generation has five values: no sex, no season, no age, 24 hours to stick to the Internet, to maintain high aspirations for new things, to focus on sustainable development and to have a sense of social responsibility, and to enjoy sharing one's life.

Prada in China, 60% of the consumers are under 35 years old, most of them belong to the millennial generation.

In MCM, this proportion is even higher, which is 85%.

Jin Shengzhu, chairman of MCM holding company, acknowledges millennials' skillful application of digital technology on the one hand, but on the other hand, there are some concerns.

She said half jokingly, "young people are very smart and come to this world with the digital age.

But the kids didn't listen to me and listened to AI, so I was worried that the next generation would be dominated by robots.

However, young people's favorite social media can not be ignored.

"Social media is very necessary for brands, and online communities are becoming bigger and bigger. Luxury brands should also keep pace with these changes."

Therefore, MCM wants to talk to people with different ideas through the community to try more ways to meet the needs of consumers.

Toledano believes that consumers will change again and again.

"We can do a lot of things, but high quality is the focus."

In daily work, he will drink coffee and discuss with LVMH's young employees to understand their ideas.

Jin Shengzhu, chairman of MCM holding company

Four, store design is brand name card.

In order to catch up with young consumers, luxury goods should be advanced from channel to marketing.

In recent years, with the tide of experiential consumption, some brands have developed their own way of recycling.

Gentle Monster, Korea's Sunglasses brand, shared its experience in the forum.

As one of the most successful emerging brands in recent years, the brand was founded in 2011 by Han-kook Kim, founder of the LVMH group's private equity fund L Catterton Asia, and it really entered the public's eyes from a "niche" brand.

At present, L Catterton Asia is the second largest shareholder of the brand besides Han-kook Kim. It plans to expand its business volume from US $200 million to US $1 billion in the next 6 to 8 years.

The success of Gentle Monster is not only the design of the product itself, but also the young people's favorite. Store design is the trademark card of the brand, and each card is different.

At present, the brand has more than 160 shops in 20 countries all over the world, all of which are new.

For example, in Xi'an SKP, the world's largest flagship store, Gentle Monster tells the story of a magical village with the theme of "fish factory".

There are fish, giant bears, villagers, exotic creatures and technology in the shop. It's not like a spectacle shop.

In South Korea's Hongda store, there was the layout of the rocket theme, and an old grandfather made a wonderful story of a rocket to find a puppy.

In addition to the story hero grandfather, puppy, rocket, the shop can see the details of the rocket device on the two floor, which is exquisite to even the coconut seed extract which is used as fuel.

These interesting shop designs are unconsciously captured in the store.

Each store has its own discrepancy, and the background of a detailed and grand story is not easy. What is more surprising is that the device in the shop will be changed frequently.

At present, the highest record is 21 days, and the same store has 36 times.

Gentle Monster shop in SKP, Xi'an

Gentle Monster shop in SKP, Xi'an

Han-kook Kim explained why she paid much attention to store design at WWD forum.

"I want to attract customers and let them know what the brand DNA is."

He said that the original store design concept was inspired by the coffee shop.

The coffee shop is the place to buy coffee, and with the advent of Starbucks, coffee shops have become a common entertainment and leisure place.

Through his investigation of coffee shops, he learned that consumers need 1 to 2 years for a coffee shop to understand and familiarity, and when building a brand is like building a coffee shop, people can quickly build up a brand.

"We will understand the different areas and consumer backgrounds to adjust the store, including shop color and background music.

If we build another coffee shop, there will be some changes. "

He said.

Every new store has made some adjustments than the previous one. This store design concept is the mode of thinking that Gentle Monster opened early.

Later, with more and more shops, Han-kook Kim felt the bottleneck of development again. "Because people may pay attention to the taste of coffee at the beginning, but there are more coffee shops. The concern is not just the taste, but the brand DNA."

He said.

So he began to study Bookstore mode.

"But I hope I can spend more time understanding and affirming my brand. If we want to establish a brand concept, we must understand our own heart and core."

Since then, he has adopted the anti normality, complexity and unpredictability as the standard of store design.

"We must be different and make others unable to copy."

You may think that it is a little exaggeration to change a store for 36 times, but Han-kook Kim thinks it is an effective way to communicate with consumers, and it is also necessary to take a big risk.

"Sometimes we have no choice. For entrepreneurs, businessmen must make their own characteristics."

In the stores of Gentle Monster, you can often see that there are no goods in the very large space. There used to be a shop that sold only some small hand cream on the whole two floor.

"Even if we only publish a product, we will have a lot of space to carry it.

That is to say, more attention to Gentle Monster is brand DNA.

This also means that some Ping effects need to be boldly sold.

Regarding the next step of the young brand, Han-kook Kim said he might consider making cakes in the shop, but he still wanted to listen to consumers' opinions and his inner voice again.

The importance of fashion brand to store design has become a trend. Although online retailing has great opportunities in the era of mobile payment, but when it comes back to brand image and DNA, offline stores are also the original points that can not be replaced.

Gentle Monster founder Han-kook Kim

Five, online and offline need balance.

Another important topic must be the electricity supplier.

Occupy the outlet of the rise of the electricity supplier, the luxury brand also put aside the high cold side, and even in 2017 triggered a fashion war between Chinese electric power giants.

Tmall's luxury platform Luxury Pavilion has Burberry, Hugo Boss, La Mer, Martha Lahti and some brands of LVMH; Toplife of Jingdong has Saint Laurent, Alexander McQueen, Alexander, and, and some brands of Kai and Kai Yun group.

At the WWD forum, some brands also talked about online retail, but they tended to be rational. They didn't ignore the offline business because they had to grab the electricity supplier's draught.

LVMH fashion group chairman and CEO Toledano acknowledged the power of digitalization. He recalled when he sold products on WeChat public two years ago.

The original plan is that if 500 products can be sold within 5 days, it will officially enter the WeChat public number.

Unexpectedly, all products sold out in 20 hours and sold tens of thousands of dollars.

Later, when people went shopping in France, they were still using WeChat.

Today, LVMH has a chief technology officer, and many companies, including the group's sifold, are developing digitalization.

But Toledano still expressed the need to look at these issues with the overall view.

"My vision is that there are more shops.

The digital facilities in the store can enhance the shopping experience, while online social networking can interact with customers and attract them to shop.

In such a situation, we are looking for a balance between online and offline. "

Jin Shengzhu, chairman of MCM holding company, said that in China, pricing is not the same according to the retail environment.

Because Chinese consumers are more practical, only shop experience can actually attract people to shop.

And online is another kind of different shopping experience, but it is necessary to ensure the unity of brand and marketing.

Scheufele, Chopin's co - President and art director, believes that the growing balance will become a big trend in the future of online and offline.

Six. Technology is nothing more than a tool

Because technology is just technology.

After fashion trends such as "dressing mirror", "beauty mirror", "RFID" and "3D modeling", many brands have joined these advanced facilities in physical stores.

Fashion and technology are becoming more and more popular, but people are also beginning to wonder if these technologies are really useful.

"My career started with technology," LVMH fashion group chairman and CEO Toledano said at the WWD forum.

For fashion industry, technology can improve supply chain efficiency and manage orders.

But wise businessmen should not be restricted by tools, because it is only a technology.

Wu Yue, President of LVMH group Greater China, also said that retail is retail, and new retail is also retail, whether online or offline, technology and technology are just tools to promote development.

"Therefore, our retail industry must be customer focused, especially local customers."

3.1 Phillip Lim's creative director and co-founder Phillip Lim, when building shops, thinks more about what consumers need and does not consider it in terms of technology.

"I will imagine myself as a consumer, so what do I want? This is something I need to think about."

Seven, designers are the soul of products.

In fact, what consumers want is still good products and their spiritual value behind them.

The quality of products is closely related to the designers of every luxury product.

Celine's former creative director, Phoebe Philo 2017, announced that her resignation left many people heartbroken and even lost their expectations for the brand.

The departure of the former creative director and CEO Christopher Bailey, who has worked for Burberry for 17 years, has declared the end of an era.

In addition to being obsessed with old designers, people are full of doubts or expectations for new designers.

At present, the most fashionable "new person" in the fashion industry should be Virgil Abloh, who took office in April as director of LV menswear. His first series in LV will soon be on the June Paris men's wear week.

In fact, through the names of these designers, people often see a brand's style and concept.

Just as Phoebe Philo stands for minimalism, Christopher Bailey represents the English classics, and Virgil Abloh has a tidal card.

Tod 's board chairman and CEO Diego Della Valle likened the designer to "director of drama and fashion" at the WWD forum.

"Sometimes it's up to them to continue the culture and DNA of the company," he said.

Although Chinese American designer Anna Sui lived in America, she tried to find her own Chinese cultural gene.

She recalls seeing a TV show about Miao people a few years ago.

Locals are proud of their costumes and spend their national Valentine's day by dancing.

The clothes and festivals she saw gave her great inspiration.

"My parents are actually traditional Chinese, and I have a strong sense of national pride.

Now there are many opportunities in China. I hope to get more recognition from Chinese designers.

Chloe may have the most experience in the pformation of brand style brought by designers.

Chloe President Geoffroy de la Bourdonnaye reviewed the 7 creative directors of the brand and the genetic changes they imported for the brand since its founding in 1952.

The design of the founder Gaby Aghion is mainly to embody the feminine beauty and elegance through the simple tailoring. In 1960s, Karl Lagerfeld introduced some bold ideas for the brand.

Later, Stella McCartney took over the design of Chloe in 1990s, highlighting the romantic sweetness.

Later, instead of his position, Phoebe Philo, on the other hand, increased the independence of contemporary urban women.

Hannah MacGibbon later made Chloe more lean to the workplace female style.

The Clare Waight Keller, which came to Chloe in 2010, is the longest serving creative director of the brand. In her hands, Chloe highlights Bohemia style.

In March 2017, Givenchy dug the corner of Chloe, and the creative director left again, and was replaced by the new designer Natacha Ramsay-Levi.

Ramsay-Levi now portrays the image of Chloe Girl into a common life concept and attitude, returning to the elegant and modern feminine color.

Bourdonnaye said that the biggest feature of Chloe is that there is no obvious logo on the product so that consumers can identify it by contour.

CEO Toledano, chairman and chairman of LVMH fashion group, hopes that designers will be able to stay longer so that they can take time to become familiar with brands, enhance the uniqueness of brands, and have the vision and ideas to lead fashion.

Celine former creative director Phoebe Philo

Eight, support sustainable development with action.

Finally, all brands should have a broader vision, not only about themselves and business, but also about mankind.

The sustainable development of the fashion industry has become a very core development topic in recent years.

Fast fashion inventory problems and rapidly changing products make environmental destruction a big problem.

Fur products are not only involved in animal protection issues, but also become the 1.5 Bai Banhei role.

In fact, every brand in the fashion industry can not be divorced from the responsibility of environmental protection.

According to McKinsey research data, the global market industry produces about 100 billion garments a year, and 3/5 of the clothes will be thrown aside in a year.

This is not only an extremely wasteful act, but also creates pollution and energy consumption.

At present, the clothing manufacturing industry accounts for 10% of the world's annual carbon emissions.

As a result, fashion brands began to move.

At the Copenhagen fashion summit in May 17th, the environmental protection foundation Ellen MacArthur Foundation announced the signing of the sustainable development initiative with the Burberry group, Gap group, H&M group, Nike group, Stella McCartney and HSBC, and joined the Make Fashion McCartney project.

Jointly maintain

Sustainable use of business models, the use of safe and renewable raw materials, and the provision of solutions for old clothes reengineering.

At the WWD forum, Chopin, joint CEO and art director Scheufele, referred to the "fair gold" development plan.

Starting from July this year, all watches and jewellery products of the brand will only use "ethical" gold.

This standard is based on the judgement of the quality of life in the mining area, and the collection of gold is based on respecting the rights and interests of miners and improving their working conditions.

Prada group CEO Bertelli also introduced the new project in 2017. The CSR group of the Group invested heavily in the establishment of the Prada Valvigna sustainability plant, which is in a green area to seek lower carbon emissions.

"

The industry should not only promote social development from the aspects of styles and materials, but also change people's pursuit of aesthetic sense of fashion, and pursue the pursuit of sustainable development. Before, they may have paid much attention to fashion itself and ignored the demands of environmental protection.