China’s luxury market is expected to grow at 18% annually to become the biggest in the world by 2015 reports McKinsey. Similarly, Strangeloop predicts that in three years there will be 520 million online shoppers in China. Hardly a week goes by without a brand announcing that its planning to open X number of stores a year in China. Its always the numbers and data telling the stories.
In March I spoke at a luxury conference hosted by a global investment bank. Many attendees were investment bankers and fund managers from around the world who knew little about retailing in China. For financial analysts the data mean everything and in the Q&A session questions mostly focused on the numbers of retail in China. “How many stores can a luxury brand sustain in China?”, “What size store has the most efficient sales per square meter?”, etc.
While I understand that numbers and data are essential to quantify the changes, opportunities, and returns on investment etc. in China’s fashion industry, on Maosuit.com I have deliberately decided not to quote much in the way of statistics.
My initiation into the fashion industry came through collecting sneakers before EBay killed the fun of traveling the world and getting shoes that no one else in my hometown had. Being a Sneaker-Head meant obsessively checking out what shoes others were wearing. This then spread to the entire outfit and wherever I went I would observe what everyone was wearing. I wouldn’t remember someone’s name a day after meeting them, but I could remember what they had been wearing even a year later.
This keen sense of observation remains with me to this day and it’s the main skill I apply when writing for Maosuit. So instead of numbers and data, I prefer to tell it as I see it and I hope by doing so to present alternate insights to mainstream news as to what is happening on the ground in China.
China’s fascination and adoption of international lifestyles is growing rapidly, and as every new season comes around I’m impressed by the way Chinese are catching onto global trends and consciously dressing themselves to look good. Its evidence like this that that tells me China is not going to halt its long-term fashion and luxury consumption habits even if there has been recent slowdown in sales.
Year on year, what I see is that Chinese young people are getting much cooler. Kids who used to wear Chinese brand sneakers are now getting around in Nikes. Office girls who used to wear dorky shoes are now experimenting with high heels. This trend wont stop! It will keep going and spread beyond Beijing and Shanghai to second, and then third, and then fourth tier cities, until most of the population is living modern international lifestyles.
Although I know its happening I’ve no way to quantify it. But what if there was a way to measure it? What if there was an economic index such as Gross Domestic Cool?
If such an index existed, then I would speculate that the growth rate of China’s Gross Domestic Cool would be highest in the world in 2012 and for the predictable future. Perhaps this statistic alone would be a convincing factor for fashion brands to enter China.
With China getting cooler and cooler every year, it wont be long till China becomes an influential contributor to global trends whether fashion or otherwise. As reported in this post on the Chinese Year of the Dragon, many fashion and luxury brands are already using Chinese imagery and cultural icons in the product designs and marketing campaigns. Trendwatching.com also has an excellent report on these trends.
Chinese fashion brands are also breaking new ground and forging into new markets. Chinese sports brand Li Ning has opened an office in right on Nike’s doorstep in Portland, Oregon, and even began poaching Nike staff. Chinese menswear brand Bosideng just opened in London, and in February LVMH invested company L Capital Asia bought a 10% stake in Chinese brand Ochirly for USD 200 million.
So when the leading economic indicators and China sales figures dip or get a little bumpy, be sure to take time away from the numbers and graphs and take a look at what people are actually wearing and driving etc. and hopefully your confidence will be restored.
Check out more examples of the growing Gross Domestic Cool, check out at Stylites.