Why Do Luxury Brands Get Together In China?

In the short span of 30 years, luxury brands have been moving cautiously into the Chinese market to get together to run shows in China, behind which is a sharp rise in the strategic position of the Chinese market.

According to fashion business news, Fendi, Chlo and Prada announced that they will hold fashion shows in Shanghai in May 31st, June 5th and June 6th respectively.

The three luxury brands will be holding a fashion show in Shanghai, which is more than a week away and is full of smoke and smoke, causing widespread concern.

For the three brands, this fashion show has special significance.

Prada's 2020 men's wear series is the first time for men to hold men's wear show outside the city of Milan for the first time.

Chlo e chose his first Pre-collection in Shanghai for the first time in Paris.

Fendi is to commemorate the late creative director, "Karl Lagerfeld", which will reproduce its 2019 autumn and winter series in Shanghai Baolong Museum of art. It is also the first time the brand has been combined with men and women.

In fact, recently, luxury fashion brands come to China to run shows more frequently, and their gimmicks highlight their attention to the Chinese market and consumers.

In December 8th last year, the US luxury brand Coach held the "Coach Lights Up Shanghai" show in Shanghai. It was also the first time that the brand was held in the cities outside New York.

In November 22nd of the same year, Italy luxury brand Miu Miu displayed its 2019 early spring fashion show in Shanghai after 7 years and two degrees.

In 2011, Miu Miu hosted the 1940s fashion show at the landmark Park Hyatt Hotel.

In addition, the American luxury brand Tommy Hilfiger 2018 autumn winter series and Prada's 2018 early spring dress series also hold fashion shows in Shanghai.

The secret big show of American underwear brand Victoria's Secret became the collective Carnival of public opinion in 2017, and tickets were once sold to 300 thousand yuan.

It is noteworthy that in November last year, the Italy luxury brand Dolce&Gabbana Shanghai big show, originally scheduled for the Miu Miu 2019 Spring Festival series, was eventually canceled due to the brand name Stefano Gabbana's "insult to China storm".

Luxury fashion brands have come to Shanghai behind the show. China has become the main battleground of fashion consumption.

As of 2018, luxury consumers will reach 425 million and spend about 920 billion euros, according to the global luxury consumer research report released by Boston consumer consultation and consumer insight conference.

By 2025, the market value of luxury goods will reach 1 trillion and 300 billion euros per year at a rate of 4.6%. At that time, Chinese consumers will occupy 40% of the consumption of luxury goods.

In addition, the advisory body Bain published the 2018 China luxury market research report that the Chinese luxury market as a whole is mainly benefited from the millennial generation and female consumers, and it is estimated that by 2025, the consumption of luxury goods outside China and within the country will be flat, which means that the brand should focus on the development of the mainland market.

Looking back at the 2018 earnings reports of various brands, the mainland of China has shown a good momentum.

The total revenue of Fendi parent LVMH increased by 10% to 46 billion 800 million euros last year, of which the Asia Pacific region, apart from Japan, contributed 29% of its performance, exceeding that of the United States as the main driving force for growth.

The Prada group's 2018 earnings report showed a 8% increase in sales in the Greater China region, the fastest growing in all markets.

In addition, according to the 2018 mid term earnings report of Chlo's parent company, the sales volume of mainland China increased by September 31, 2018.

In the first quarter of this year, the LVMH fashion leather industry revenue rose 20% in the first quarter, a 5 year high, easing the industry's worries about the slowdown in the growth of luxury goods.

During the reporting period, sales of LVMH fashion leather goods department recorded 5 billion 110 million euros, a record high of 5 years, an organic increase of 16% over the same period last year.

In addition, Gucci sales increased by 24.6% to 2 billion 326 million euros for Chinese consumers. Although the growth rate slowed down 37.9% over the same period last year, the quarter's performance still exceeded the Bloomberg analyst's forecast of 20% growth, which has recorded double-digit growth for 13 consecutive quarters.

The support of national policies has also helped the industry to strengthen the consensus that luxury consumers will return to the mainland market.

Since April 1st this year, the domestic value-added tax rate has been cut down completely, of which 16% of the original applicable tax rate has been adjusted to 13%, and the corresponding cross border value-added tax has also declined simultaneously. Louis Vuitton, Gucci, Prada and other brands have already lowered the price of the products by about 3%.

In addition, the first electricity business law of our country has been implemented since January 1, 2019. It severely cracked down on the grey occupation "purchasing agent" which emerged at the expense of luxury goods at home and abroad, and the brand reclaimed pricing power, prompting more consumer behavior to take place in China.

Although luxury brands now see the Chinese market as a key strategic market, the first fashion show in China took place in 1983, more than 36 years ago.

In those days, French designer Pierre Cardin Pierre Cardin became the first international costume master to come to China. He led 12 models, set up a T stage in the Beijing national culture palace and held a fashion show. Only the government officials and technicians in the foreign trade and garment industry can participate.

At that time, China had implemented reform and opening up. In the time when the nationals were still wearing broken flowers and cotton coats, Pierre Cardin undoubtedly set off a wave of impact in China.

In the next 10 years, Pierre Cardin came to China 20 times, which made Pierre Cardin become the pronoun of high-end clothing and luxury goods in China for a long time.

In 1993, the founder of Valentino Valentino Garavani and Italy designer Gianfranco Ferr were invited to Beijing for the first time to open the first international clothing and Accessories Fair in China to show their autumn and winter fashion show and received the highest reception at that time.

Tiantan park also held activities to celebrate the first Chinese Gianfranco Ferr e purchase.

"Valentino Garavani and Gianfranco Ferr e suddenly discovered that they became ambassadors in a country eager for fashion," the American women's daily Daily reported in 1993.

At that time, Chinese consumers began to favor international luxury brands because of their "face". Brands such as Louis Vuitton, Ermenegildo Zegna, Gucci and so on have begun to open stores in major cities, but consumers still have no way to deal with fashion.

"The main problem is that fashion education is not enough and people do not understand fashion matching. Many people will buy a suit and leave a cuff tag for the brand name. They will only wear their jackets instead of the pair of trousers," the women's Wear Daily quoted Bill Short, who was responsible for supervising the Pacific Concord China business of Hongkong's high-end chain store.

Gianfranco Ferr also said it might take some time for her feminization design to be popular in the Chinese market.

Obviously, fashion show has become an important means of establishing friendly relations and cultural exchanges between China and foreign countries. Beijing, as a cultural center, has become the window of that time.

But with the upheaval in the Chinese market, luxury brands in the Chinese market have been given more commercial purposes. The brand will turn more attention to Shanghai as an economic center.

In 2002, after China's accession to the WTO WTO, it began to attract more luxury brands.

In the past 20 years, with the increase of national economy and disposable income, luxury and fashion have become one of the main carriers of consumer culture.

Chinese consumers are constantly accepting the baptism and education of luxury fashion culture, with the expansion of desire, identity and symbol consumption, which has gradually become the most potential luxury consumer market.

In October 19, 2007, Fendi became the first and only brand in the Great Wall, when Karl Lagerfeld, the creative director, brought 44 Chinese supermodels and 44 foreign supermodels to the Great Wall.

In 2011 and 2014, Burberry held fashion shows in Beijing and Shanghai respectively.

Prada chose its first fashion show in Shanghai in 2011.

Valentino first released its women's clothing series in Shanghai in 2014.

CHANEL held a press conference in memory of east suburb of Chengdu in November 2017. This is the third fashion show of Paris fashion house in China, the first two were in Shanghai and Beijing.

Balenciaga and Celine also released their Chinese fashion show in Beijing in 2014.

In March 30th last year, DIOR released the 2018 spring and summer advanced customization Series in Shanghai last March 30th. This is also the third time for DIOR Gao Ding to come to Taiwan after 2012 and 2013.

In June 2017, DIOR moved the 70th anniversary brand show to Shanghai.

Although Beijing, Shanghai and Chengdu, a new luxury consumption city, have become the popular show locations of luxury brands, there is a general trend towards Shanghai.

First of all, as the economic center of the port city, Shanghai is the headquarters of the LVMH group, Kai Yun group and many other international brands, its headquarters in the mainland.

Secondly, like New York, Shanghai has always been regarded as China's "dream city" and "fashion capital", and fashion culture and consumption atmosphere are more intense.

Statistics show that China's first real department store "Shi Shi Department Store" was set up in Nanjing Road, Shanghai in October 20, 1917. After that, Yongan, Xinxin, Daxin and other stores were set up, and the name of "ten seas" began to spread throughout the country.

Under such an environment, the people of Shanghai once became the main force leading the Chinese trend, and the strong artistic atmosphere enabled Shanghai to have an artistic landmark such as the old pier, the contemporary art gallery, the West Bank Art Center and the Rong residence, which provided a hotbed for the landing of the fashion show.

Therefore, a strong fashion atmosphere and radiation may be another key reason to attract the brand to Shanghai.

It is worth mentioning that in 2018, the first China International Import fair was held in Shanghai, and LVMH became the first luxury group to cooperate with the Expo.

This is consistent with the idea of early Pierre Cardan's appearance in the Chinese market from Beijing. Relying on the good foreign trade environment and government support, hosting the event here will make it easier for them to do business in China in the future.

In the early twentieth Century, high fashion designers began to hire models in small salons to show their latest works to customers.

As a social activity, fashion show initially helped Paul Poiret and other first fashion designers to lay the foundation in the circle.

Then the scale of the fashion show grew from small to large, and the date was gradually fixed.

Since the 50 year of twentieth Century, fashion shows have changed from social activities to media, playing an important catalytic role in the pformation of fashion from advanced customization to ready-made garments.

But when the emergence of the Internet and social media breaks the asymmetry of the fashion show information and allows viewers to watch the fashion show synchronously by live and high-definition pictures, the fashion show not only maintains the high-end customers and media relations invited to participate in fashion shows every season, but also becomes a window for designers to show the design and creativity to the public, as well as an excellent marketing opportunity.

Luxury is related to "dream making".

Creative and expensive fashion show is regarded as a comprehensive stimulation of guests' sensory marketing activities.

By leveraging the social influence of the guests, it brings the topic and popularity to the brand, which is also the most important reason for the luxury brand to do the fashion show.

At the same time, the scene experience of fashion show is becoming more and more important. The brand is always pursuing a more realistic, magnificent, immersive, more space-time pformation experience, which enhances the audience's sensory impression through various forms.

Luxury brands are well aware that resonance is the most suitable currency for social media.

Therefore, running shows is undoubtedly the best way to deal with the brand and the local consumers. This exhibition, which has lasted for nearly a century, is the marketing activity with the most brand input each year. Compared with digital marketing, the fashion show that is moving the masses is a symbol of luxury brand.

Moving the fashion show to China reflects the brand's absolute importance to local consumers, and penetrated in all directions, pushing the brand to the public through social media and the market.

Obviously, most of the show brands want to get in touch with Chinese elements, whether they are the Chinese models that were launched in the 2007 Fendi the Great Wall show, or the 13 special Look designed specifically for the Chinese market by Alexander Wang, who was then the Balenciaga creative director in 2014, or now that Coach joins the word "China" in the show, and even the giant bird cage featured by Miu Miu in the show area is designed to express sincerity, better integrate into the local culture and engage in dialogue with consumers.

But brands should be vigilant. With frequent travel abroad and widening horizons, the awakening of consumer awareness, any superficial impression and cultural superiority will be a stumbling block to expansion.

The importance of brand localization determines the final effect of activities. Dolce&Gabbana is a warning bell.

Chlo Geoffroy chief executive officer Geoffroy de la Bourdonnaye recently said that the brand creative director Natacha Ramsay-Levi came to Shanghai in January to find inspiration for the big show, and stressed that the Chinese team had come up with the idea of running a show in the city, and the employees of Chlo China company are all Chinese.

The successful practice of the head luxury brand, on the one hand, enables other brands to see the recognition and acceptance of such activities by Shanghai audiences. On the other hand, it allows the latecomers to follow the rules, effectively reducing the cost of trial and error, and coordinating local resources and innovating on this basis.

As a result, the agglomeration effect is becoming more and more obvious.

In fact, fashion shows are only one form of brand contact with consumers.

Today, exhibitions have also become a marketing tool and a medium for brands to communicate with young people.

For consumers, the art exhibition can help them first try to contact the brand culture rather than hastily buying a 10 thousand yuan handbag.

In 2015, Gucci creative director Alessandro Michele and the British fashion magazine "LOVE" founder Katie Grand co curatorial "No / Longer/Not" crossover art exhibition opened in Shanghai Minsheng Art Museum. The industry even described this as a turning point in the performance of Gucci in China.

The exhibition uses a completely new way to integrate the avant-garde metaphysical issues with the eye-catching visual presentation with the philosophical question of "what is the contemporary", and has won the popularity of the industry and consumers.

Before that, almost no fashion art exhibition could create such a phenomenal sensation in China.

On the one hand, the industry has consistently praised the Alessandro Michele's promotion of brand connotation to a philosophical level.

On the other hand, the exhibition has become a topic of conversation among young people and has made a strong influence in social media.

The audience of different needs in this exhibition takes what they want, and the result is that the new Gucci after the pformation of Alessandro Michele has begun to win popular support.

Then, in 2017 and 2018, Gucci held the exhibition of "curator Mickey" and "artist in this" in China respectively, which skillfully presented the balance between the core and commercial nature of the brand art, and firmly grasped the mind of the millennial generation.

Over the past year, more and more luxury brands have chosen to run exhibitions in Shanghai.

After ten years of successful Cartire Jewellery Art Exhibition in 2009, Cartire, the high-end jewelry brand Cartire, will once again join hands with the the Imperial Palace Museum. From June 1, 2019 to July 31st, we will hold "special exhibition of Cartire and the Imperial Palace Museum" outside the Meridian Gate of the Imperial Palace, exhibiting more than 830 art treasures.

CHANEL brought a special exhibition of "Chanel Mademoiselle" (Mademoiselle Prive) with 3 themes of advanced custom clothes, NO.5 perfume and high jewelry last week.

Louis Vuitton's "flight, navigation and travel" exhibition was held in Shanghai Exhibition Centre from November 16th last year to February 1st this year.

The exhibition displays the historical archives from the founder family members of the brand, to the works of nearly 1000 designers of today's Louis Vuitton, and the art director and the scenery designer Robert Carsen have designed 15 chapters of dramatic scenes for the exhibition. In the 78 days, they have received 270 thousand spectators.

Since October 2017, Prada has held the "Rome 1950-1965" art exhibition in Shanghai's Centennial mansion, its "fable narration" and the three exhibitions of "What What Was I", designed by artist Goshka Macuga, which have attracted many fashion lovers.

With the help of the past, history and future vision of the brand, the fashion art exhibition has played a good "narrative" role, through communication with consumers in the exhibition space, so that they can better understand and identify the brand value and DNA, and create "added value" for their products.

Consumers buy more than just a product or a story, and these stories give them more sense of submission, thus creating an emotional connection with the brand, which is what consumers need today.

Therefore, whether it is fashion show or fashion art exhibition, brands come to Shanghai after all, in the long run in the Chinese market.

But in the era of scarce social media, how to seize the eyes of many consumers is an important proposition.

Fortunately, luxury brands have grasped the logic of attracting attention quickly through vigorous activities and social media marketing, telling stories of brands in an immersive way, enhancing cultural sensitivity, and creating a high-quality experience that is fully penetrated online and offline.

Of course, luxury brands should also take account of the fact that the clustering effect will distract consumers while gathering consumers.

In the past, the intensive topic discussion, though it had made a year long marketing campaign in the Chinese market, failed to save the brand performance.

From the return to investment ratio, the excessive tilt of the show may drag down the brand.

Fashion show is the first step to expand local influence, but when this form loses its freshness, the localization of brand in China needs to be close to the core form.