Data source: ASKCI, An analysis of the growth of China’s wool import volume and amount from January to July 2018

Among the different types of wool, Australia Merino wool is the most well-known and prestigious. Australian Merino wool is much better than traditional types of wool because it is comfortable on the skin and can regulate the body temperature. Furthermore, it has a natural antibacterial protein that keeps the hair from accumulating odors. All these qualities make Australia Merino wool stand out from other types of wool materials.

Future developments in China’s merino wool market

According to the free trade policy, China increased the free-tax quota of Australia imported wool. In 2019, the total CTRQ is 36,936 tons of New Zealand wool, 665 tons of New Zealand wool, and 34,729 tons of Australian wool. Due to the currency uncertainty and trade friction between China and the US, the wool market in China could experience a slowdown.

The 10^th Global Wool Summit in China delivered two messages to the wool market in China, especially for Merino retailers. First, the Merino fine wool (美利奴细支毛) price increased sharply in 2018 and will continue to increase due to the market demand and quality. Second, innovative design is the key to push the development of the wool market. For instance, wool is also now used in sportwear. Sportswear requirements differ from fashion apparel and fibers are often blended to utilize the combined effect of two or three fibers, a typical example will be wool, polyester and elastomeric fibres.

Making wool available for sportswear and underwear

AClink International Pty Ltd

Creative design and technology make wool a trendy material for sportswear. Two brands in particular that produce these kinds of wool athletic clothing have become popular in China. AClink International Pty Ltd holds the largest wool products factory in Australia. It has established a mature supply chain that includes importing, wool cleaning, carding, dyeing, spinning and weaving. The Auzwool Family, a subsidiary of AClink, produces a series of wool-made products that used innovative technology that allows them to produce wool T-shirt.

According to the interview, the founder Kim Tang says the standard wool products can keep the body warm however the fine wool can adjust the body temperature and make the wool feel light and breathable. This series also contains sportswear, socks and scarves. In terms of design, Auzwool chooses to corporate with famous designer Amy Jones. Moreover, Auzwool very focuses on innovation. It uses different kinds of fibres, such as Possum and Alpaca to blend with Merino wool to diversify the product. As of 2020, Auzwool has a 50% market share of China’s Australian wool products market.

Particle Fever

Particle Fever is a Chinese designer sportswear brand. Collaborating with The Woolmark Company, the exclusive Merino wool athleisure collections are designed to be worn during a workout as well as outside the gym. Under the theme of Fitness x Fashion, the Helen Lee and Particle fever collections are available exclusively in Lane Crawford stores across China and Hong Kong and the campaign also features Chinese supermodel and fitness enthusiast He Sui.

Source: Sohu.com, Particle Fever’s athletic clothing in China

Merino wool sportswear e-commerce marketing

Decathlon and Smartwool were ranked the first and the second in the research results for ‘Merino wool sportswear’ on Tmall.

Source: Decathlon Tmall shop

The keywords are breathable, soft touch, anti-ordor. Smartwool, an outdoor American brand, also frequently mentioned about the idea of breathable fibre and anti-ordor characteristics of merino wool.

Source: Smartwool Tmall shop

Other than product description and perks of Merino wool, Naturehike and Handragon both include diagram explaining what it is, while other brands seem to generally promote where it is from, the design, why Merino wool is good (dry, anti-odorl, warming, anti-UV). Naturehike and Handragon also has more than 50% Merino wool in that specific product.

Challenges and opportunities of Merino wool market in China

There are several reasons China’s merino wool market relies heavily on imports from other countries. First, China has a limited amount of sheep. The price of the Merino sheep is usually very high, and the output of wool is less than other sheep breeds. The second reason is the lack of technological support. Chinese farms have less knowledge and experience in the wool industry than Australian. As a result, with less professional farmers to organize the breeding areas, the yield is lower quality. On the other hand, this is good news for Australian wool producers who want to enter China’s merino wool market. However, the quality and output of merino wool are influenced by the weather, market price, and stock.

Top 5 merino wool exporting countries had a significant decrease in output in 2018 and 2019. Producers from Australia say the drought has a very negative impact on the output of wool, and many farmers need extra funds to deal with the drought. The wool price was push higher than other competitors such as Uruguay. The output of Australian wool in 2018-2019 was the lowest in 90 years.

In contrast, Uruguay increased its wool output in the last two years given the stable weather condition. Wool farms in Uruguay also have improved their technology that enables buyer to trace back the origins of the products. This not only guarantees the quality but also increases the competitiveness of Uruguay wool worldwide as it is traceable and certified.

Additionally, environment policy sometimes contradicts with wool production. For instance, “one billion trees” is a political slogan by New Zealand government in 2019. This programme aims to be achieved by 2028. One billion trees programme may hinder wool production as ranches convert to forests.

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China surpassed the US as the world’s biggest fashion market in 2019, according to McKinsey. The fashion industry in China has been flourishing and evolving over the past decade. Currently it is continuing to expand at an exponential rate. With the rapid urbanization and the increasing spending power of the population, markets for both high-tier and low-tier clothing are rapidly growing.

The fluctuation of Overseas Brands in Chinese Markets

Because of the improving living conditions of the middle-class in China, Chinese consumers have become highly brand conscious. In 2010, China’s fashion market was a $17.7 billion market where Louis Vuitton, Chanel, and Gucci remain the most desired luxury brands.

However, in recent years, traditional luxury brands are losing favor among Chinese consumers. Instead, the so-called “light luxury” brands have begun to gain favor. In 2014, luxury consumption in the mainland market by Chinese consumers dropped to 11% percent year-on-year to $25 billion. The government’s anti-graft campaign has formed a more economical and rational climate among the people. Yet, luxury purchases made by Chinese consumers in the global market remain powerful. Chinese people bought 76% of luxury products outside the country in places like duty free shops. Asides from luxury goods, fast fashion companies such as Zara and Uniqlo have maintained a good momentum and are still popular among the young population in China.

Mass fashion and luxury goods are the most promising areas

In terms of market segmentation, the fashion industry in China is most likely to achieve good development in the mass fashion and luxury goods.  The mass fashion is mainly driven by competitors who stand out from the mid-market and have strong value propositions. Rapidly growing Chinese economy and the prosperity of the global tourism industry drove the growth of the luxury market.

Of the top 20 global fashion companies, 18 have presence in China, which includes all the fast fashion and luxury brands. The only two players which do not have a China presence are the off-price stores, T.J. Maxx and Ross Stores, which rely on the business model of bulk purchasing name-band and luxury products and sell them at a high discount.

Data Source: McKinsey Global Fashion Index, ‘Top 20 players 2017’

Data Source: Statista, official websites of brands, Number of apparel stores in China by brand

As we can see, mass market and such sportswear and activewear brands as Adidas and Nike lead in terms of number of stores in China. These brands have bigger target group in China, unlike the luxury brands (like Gucci and Hermes).

The top foreign off-price stores have not entered China

The challenges that off-price stores like TJ Maxx or Ross Stores would face in China are that as of 2020 Chinese luxury consumption habits are status-drive. Hence, luxury brands can get away at selling at a very high price in China. Additionally, Chinese can buy cheap products online, and have access to counterfeit luxury products for cheaper than discounted authentic luxury goods.

TJX, which operates TJMaxx, Marshalls, and Homegoods, makes 76% of its revenue in the United States, according to the company’s 2018 annual report. The remaining percentage is made primarily in Europe and Canada. As for Ross, it operates its more than 1,700 stores – Ross and dd’s DISCOUNTS – in the United States and the U.S. territory of Guam. These retailers buy unsold or excess inventory from brands and other retailers, meaning most of their supply chains start and end in the U.S.

However, a Chinese equivalent to TJ Maxx is being nurtured locally. Dadacang is quietly blooming in domestic third, fourth and fifth tier cities. This retail form covers clothing, beauty, home and other categories, which can simultaneously carry offline experience and online warehousing functions. Unlike TJ Maxx and Ross “Dadacang” has formed an online/offline model, which is easy to incentive distributors to participate.

On a similar note, the second-hand clothing market in China is growing a bit behind Japan and the west, but is starting to make-waves.

Domestic sales maintained rapid growth

In 2019, despite the impact of Sino-US trade frictions, fashion industry in China has generally maintained a steady development trend. The industry chain, value chain and ecology of the fashion industry have gradually improved.

According to data from the National Bureau of Statistics, in 2018, fashion clothes industry completed a total of 23 billion pieces. Since 2018, China’s domestic fashion clothes market has maintained steady and rapid growth. According to estimates by the China Apparel Association, total fashion clothes sales in China reached 3.08 trillion yuan in 2018, an increase of 7.32% year-on-year. In 2018 exports of fashion clothes and accessories reached US$157 billion, an increase of 0.3% year-on-year.

Data Source: China Customs, ‘Changes in the growth rate of China’s fashion clothing and accessories exports’

The developing E-retail Markets in fashion Industry in China

Chinese e-commerce is dominated by a few domestic giants, including Alibaba, Tencent (in Chinese: 腾讯) and Baidu. Fashion is one of China’s biggest e-commerce category. Most of the apparel purchased online proceeds on Taobao. With the cheaper price and diverse designs, shopping online has become the first choice for most of the population. The development of e-commerce in the fashion industry has prompted the domino effect of instant celebrities on the social media. The fashion style they led has greatly influenced young people, resulting in some of them creating their own brand and starting to sell clothes on Taobao.

Thanks to the rise of e-retail, domestic designs can finally gain a foothold in the fashion markets. Alibaba as of lately launched a new platform called “Tmall Global” (in Chinese天猫). It is a channel covering the purchase of overseas products. As the e-retail markets have been growing and developing rapidly in China, the fashion industry will become more promising.

The penetration rate of the e-commerce fashion industry is high in China

China’s e-commerce industry has developed early and fast, and after many years has become one of the important retail channels. Statistics show that the domestic e-commerce retail scale has increased from 1.4 trillion yuan in 2013 to 5.5 trillion yuan in 2017. It had a year-on-year growth rate of 31%. Forecast shows that the scale of e-commerce retail will reach 10.1 trillion yuan by 2020.

The clothing category is unique from other categories. Compared to electronic products, it has a high degree of personalization. In 2011, the domestic fashion clothes e-commerce market scale was 203.5 billion yuan. In 2016, the market scale increased to 934.3 billion yuan. The year-on-year growth rate was 25%, and the 2011-2016 CAGR was 36%. The penetration rate of clothing e-commerce has also increased from 14% in 2011 to 37% in 2016.

Low price is the key factor driving e-commerce fashion in China

The penetration rate of e-commerce consumption in first-tier cities is significantly higher than that in low-tier cities. Due to the high degree of informatization, high-tier cities have a variety of accessible material supplies.

The advantage of e-commerce is that the price is relatively low. According to JD.com’s data, by 2016, the proportion of highly sensitive and extremely sensitive to price consumers in the e-commerce reached 40%. The price is still the priority in the e-commerce consumption.

Data Source: chyxx.com, Public data collation, ‘E-commerce fashion industry consumption is highly price sensitive’

Prospects of the fashion industry in China

More environmentally responsible brands

Currently in China more and more consumers are demanding ethical practices and responsible retailing. In fact, the country has a key position in shaping the new green trends in the global fashion market. The global fashion industry is growing, and a great deal of that growth comes from fashion market in China.

Examples of sustainable fashion brands in China

NEEMIC is a high fashion brand based in Beijing, seeking to address both ethical and environmental consciousness within their label. Their clothing is made from organic materials, eliminating all artificial products from agricultural production of fibers.

Fake Natoo is differentiating itself from competitors with its production techniques. Fake Natoo creates the clothing using discarded clothes or donated textiles, making this a truly sustainable line.

Shokay is a social enterprise that creates clothing using yak down through a partnership with Tibetan herders. Furthermore, they are actively contributing to the development of communities in western Tibet.

Data Source: Shokay, eco-friendly fashion brand in China

These companies stand out as excellent examples for green development in the industry. However, their ability to overcome rising costs in materials, labor, and transportation, while tackling more active regulation and shifting consumer sentiment, remains to be seen in the long run.

Fashion market in China is trying to target millennials

Chinese fashion companies have yet to figure out how to appeal to millennials as labor costs increase the pressure to adjust their brand strategy. The Chinese millennials are more about individualism unlike their predecessors. The new individualist consumer was the inspiration for the China’s biggest fashion fair in Shanghai in 2019.

“The transformation that our industry and overall economy is facing is as steep as a cliff,” said Zhao Weiguo, professor at the fashion department of Zhejiang Sci-Tech University. “This means that there is a wide gap between past and future and everyone faces the question of how to leap over it.”

While China’s technology sector has produced international heavyweights such as Huawei or Alibaba, an equivalent fashion brand hasn’t emerged yet. In China it’s key to understand the rapidly changing and diverse demands of consumers born after 1980. They have more and more influence by their western counterparts. The purchasing power of these groups, which currently consists of roughly 410 million people, will only grow. Working with the internet age and the millennials, Chinese fashion companies have a huge potential to uncover.

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Two drivers of China’s counterfeit production

The counterfeits industry in China: a consequence of economic growth

The counterfeit industry in China is seen as a problem but it should also be studied as a symptom of economic growth. In 1978, Deng Xiaoping started reforming China’s economy. For the first time, foreign investments where encouraged. Many companies wanted to relocate there because of low wages and domestic potential. The industrial power grew and the country became the factory of the world as the the international production process. Global brands like Nike or Adidas have a part of a part of their production there. In many sectors, the country started to adopt new technologies.

While China’s living standards improved greatly, the new industrial power lead to counterfeits, as factories could cheaply re-create brand products. The counterfeit industry in China seems like a minor symptom of industrialization. Hence, even if it is necessary to tackle counterfeits, it was just the result of a growing Chinese industry.

China counterfeiting is linked with brand culture

Since the early 1990’s, the counterfeit phenomenon increased quickly in China. During this decade brand culture emerged as the opening of western luxury stores in country. Fashion brands became hyped, and counterfeits were a mean to obtain luxury goods without spending years’ worth wages. Since, fakes continue to progress fulfilling the domestic market of China.

In 2015, China and Hong-Kong represented 86% of the global counterfeit industry, which is around 400 billion USD every year, according to Europol. Thanks to years of relocating for foreign companies, Chinese factories now have the skills needed to copy almost everything. In Chinese stores, 60% of luxury goods are imitations and you can also find some complete fake stores who just looks like a real one. For instance, A fake supreme store opened in Shanghai. The counterfeit phenomenon highly increased following the luxury market starting in China.

Size of the market for counterfeit products in China

The global counterfeit trade for all items, from purses to electronics to software, is worth USD 461 billion, about 2.5% of all trade worldwide. That is more than the global drug trade. Despite attempts regulation, international trade in counterfeit goods has almost doubled since 2008.

According to the 2018 Global Brand Counterfeiting Report, worldwide losses suffered due to counterfeiting amounted to USD 323 billion in 2017, with handbag companies alone accounting for $20 billion of that.

80% of the world’s counterfeit goods come from China, and many of the market’s consumers are in China as well.

The market for fake goods in China

There are several distinct market segments of consumers who purchase fake goodsin China. The primary segment is buyers unaware that they are purchasing fake products. This deceptive counterfeiting is rampant, but the market for fake goods in China is largely driven by consumers who actively search for and purchase counterfeit products. 

Middle-class shoppers who value brand prestige make up a large segment of the non-deceptive counterfeit market. They can afford the occasional $500-$1000 bag, but not the luxurious $15,000 Louis Vuitton or Birkin. These aspirational Chinese shoppers purchase fake goods for the same reason the wealthy buy real products: to emulate their high-class idols, impress peers, and enhance social status. Fake goods allow shoppers to “consume” prestigious brands without actually buying the high-quality goods.

Some consumers knowingly buy counterfeit goods even though they could afford a genuine product. They have ample funds but believe that the high prices of authentic products are unwarranted, especially when they can get a similar version at a much cheaper price.

Chinese Fashionistas chasing the trends

Some wealthy buyers of counterfeit goods in China are known as “fashionistas.” These fashionistas want to buy the hottest new products, but know that another trend will replace it next season and are thus unwilling to invest the money to stay on trend season after season. Furthermore, they see counterfeit purchases as low risk, because limited-edition or recently released products are less familiar to the general public, making it more difficult to call out a fake.  

Buyers of counterfeit goods impose a hidden cost on the brand and people who buy the real thing: they make the brand less exclusive. All non-deceptive counterfeit market shoppers share one attribute: they are willing to pay for visual attributes and functions, but not willing to shop the genuine products. 

Government regulation of the fake market in China

Affected parties have previously complained that punishments for selling counterfeit goods in China are too light to deter offenders. In February 2017 Alibaba reported that of the 1,910 cases of suspected counterfeiting they passed on to authorities, only 129 people were found guilty.

In August 2018 the State Administration for Market Regulation stepped-up efforts to crack-down on the illegal production and sale of counterfeit goods in China.

The regulator announced strict punishments for online trading platforms that fail to protect the rights of consumers and trademark owners, or that do not actively cooperate with market regulatory authorities.

They demanded that other regulators such as the Shanghai Administration for Industry and Commerce launch targeted investigations into sales of counterfeit goods in China, and specifically called out offending platforms such as Pinduoduo.

The new China’s e-commerce law, which took effect on January 1^st, aims to discourage counterfeiting in China through heavier fines and places more responsibility on digital platforms to remove sellers of fake goods. The law also addressed false-advertising, consumer protection, data protection, and cybersecurity.

The new law targets three groups: e-commerce platform operators like Taobao, merchants who sell goods on sites like Taobao, and vendors with their own websites or who sell on social media. Merchants who sell exclusively on social media platforms had been previously unregulated, but now these sellers will need to register their businesses and pay relevant taxes.

In an effort to spur major e-commerce platforms to crack down on counterfeits being sold on their sites, the law makes platform operators jointly liable with the merchants selling fake goods. Previously, only the individual merchants were liable. Platform operators can now be fined up to 2 million RMB (USD 290,000) for the property infringement that comes with selling counterfeit goods in China.

E-commerce platforms crackdown on the sale of the counterfeit good industry in China

Taobao and fake goods

In 2015, Alibaba was the subject of intense state scrutiny as the State Administration of Industry and Commerce unveiled that only 37% of the luxury goods authorities examined on its Taobao platform were genuine. In a strongly worded white paper, state authorities criticized Taobao for lax internal controls, declaring that many of the products sold on the site were substandard, violated trademarks, or were just plain illegal. Chinese consumers agreed and called on the government to tighten supervision over Taobao. Alibaba declared a zero-tolerance policy towards counterfeits, and created a new 300-person team to ramp up the fight against fake good in the Chinese market.

Luxury brands were unimpressed, and in May 2015 Gucci, Balenciaga, YSL and other brands filed a lawsuit alleging that Alibaba’s negligence encouraged the sale of fake goods on its sites. A US federal court dismissed the suit, but Alibaba’s reputation as a haven for counterfeiters persisted.

In 2017, Alibaba was again under consumer and government pressure when Taobao was found to have over 240,000 vendors selling fake goods, up from 180,000 vendors the previous year. To assay consumer anger and protect investor relations, Taobao in mid-2017 launched an initiative to crack down on the fake goods being funneled through their site. That initiative has led to 95% of takedown requests and red-flagged listings being processed within 24 hours, a significant improvement in processing times. 97% of listings for counterfeit items are now deleted before transactions even take place.

How does Pinduoduo handle counterfeit items?

Pinduoduo, the third-largest e-commerce platform in China, is another site criticized for selling low-priced knockoffs. In August 2018 the State Administration for Market Regulation investigated Pinduoduo and announced that Pinduoduo should strengthen platform management and better regulate activities of third-party vendors. Pinduoduo soon removed more than 10 million fake items from its site and blocked more than 40 million product links suspected of copyright violations. It is working with over 400 luxury brands to fight counterfeiters and has created a hefty 150 million RMB account to refund consumers who were unwittingly sold fake products.  

How counterfeiters in China get around AI controls online

There are many intricate ways in which sellers of fake goods in China have evaded regulation online. One common trick is for sellers to redirects clients to separate websites, where they can browse options and place an order. Another method is to label items as “haute couture,” which consumers are aware implies ‘high-quality copy.’ Aside from this label, Taobao sellers can change the name of the brand they are copying, or display just part of it. One seller of copycat Zara clothes lists his items as ZA or Z*ra, which allows him to sneak past the filters set by Taobao.

Taobao’s AI tools are constantly upgrading to become more difficult to trick, especially with the introduction of filters against luxury products priced below a certain point. Accordingly, some sellers of fake goods will display a price for their product that is consistent with the price for the real thing, or display a price that is outrageously high. Interested customers will talk to the shop in Taobao’s private chat function, and sellers will reveal the real, much lower price.

In-person sales of counterfeit goods in Shanghai and Beijing

Counterfeit goods sold online in China work hard to avoid detection, but physical brick-and-mortar ‘fake markets’ in cities like Shanghai and Beijing are out in the open, easy to find and even reviewable on sites like Trip Advisor. Officials routinely inspect physical stores, but they may not take the job too seriously because they know local vendors rely on the income. Regulators let the stalls peddling cheap and fake goods slide, instead choosing to target merchants who lead interested buyers to unmarked apartments, back rooms, or closets full of high-quality fake Gucci, Prada, Michael Kors, and Louis Vuitton handbags.

Aside from avoiding government regulation, counterfeiters in China work hard to stay under the real company’s radar. One fake good peddler in Beijing explains: “We careful. Louis Vuitton. They send spies and they sue. So we hide.”

The emerging authentication industry in China

The prevalence of fake goods in China and consumers’ subsequent fears of being scammed into accidentally purchasing knockoffs has created a new sector: product authentication.

There are dozens of apps on the Chinese Apple iOS app store that offer to verify luxury goods. Authentication company Zhiduoshao has hundreds of thousands of users who pay 49 RMB for a product to be checked virtually by an expert. Founder and CEO of Zhiduoshao maintains that 95% of authentication requests can be answered online via photos. Authenticators tell users what kind of photos to upload, and then carefully inspect the monogram, fabric, and technique. Often, the process only takes a few minutes.

Similar app Isheyipai boasts an “expert jury” of 12 authenticators. Users upload photographs of the item in question and choose who they want to check their product. Prices range from 49 RMB for a junior authenticator to 99 RMB for senior staff. Appraisers each have areas of expertise, such as bags, jewelry, or shoes.

Private companies offer training courses that teach appraisers-in-training how to inspect a wide range of luxury brands and products, with advice about texture, logos, stitching and everything else that a counterfeiter might get wrong. A 10-day program can cost up to 40,000 RMB.

Authentication companies in China have an uneasy relationship with the brands whose integrity they claim to protect. Cartier maintains that their products should be bought only from “authorized sellers,” while Audemars Piguet states that it does not endorse any authentication app and De Beers says it is unaware of them.

Brand wariness of authentication services is rational because Chinese counterfeiters are now imitating these authenticators too. Seemingly authentic sites copy the names, website layouts, and imagery of established authentication platforms like Zhiduoshao in order to scam consumers seeking product verification out of their money. In one case, consumers discovered that an authentication app was faking reviews and authentications to sell knockoff goods.

How brands can fight back against Chinese counterfeiting

Anti-counterfeiting strategies must be brand specific to take into account the company’s target market, the types of counterfeits produced, and how the counterfeits are being manufactured, distributed, and sold. An effective strategy combines IP protection, export and customs controls, and retail market controls.

But no matter how sophisticated the anti-counterfeit strategy is, where there is a demand there will be a supply. The only surefire way to shrink the market for counterfeit products in China is to deter consumers from purchasing fake goods in the first place. However, typical deterrence strategies that luxury brands have used in the West will not work in the Chinese market.

Many consumers are aware that their purchases are counterfeit

Most consumers who purchase counterfeit products in China are well aware that the quality is not on par with the real product. When consumers buy fake goods, they do so despite the possibility that the product will fail them. Additionally, the prevalence of sophisticated fakes means that consumers can easily buy counterfeit products with nearly genuine quality. Thus, highlighting the poor performance quality of counterfeit goods is not an effective deterrence strategy for brands to adopt in China.

Where in other countries purchase of knockoff goods is a punishable crime, in China consumers are not liable for their counterfeit purchases. Deterrence of counterfeit purchases in China cannot then be fear-based.

There are two main deterrence strategies that luxury brands can adopt to dampen Chinese consumer demand for fake goods: the ethics emphasis, and the psychosocial emphasis.

Anti-counterfeiting in China: The ethical approach

Counterfeiting is not a victimless crime, and luxury brands should tell consumers who gets hurt when they buy fake products in China.

Most counterfeit goods in China are made in sweatshops by children and slave laborers who are often the victims of human trafficking. These sweatshops are overwhelmingly in low-tier Chinese cities, and these child workers are often Chinese, making the issue hit particularly close to home for Chinese consumers of knock-offs.

The Chinese counterfeit industry’s use of child labor is much more damaging than the use of child labor by companies like Walmart and Target. Corporations can beare held accountable for exploiting cheap labor: when labor abuses are exposed, companies face plummeting share prices, lawsuits, and customer boycotts. Counterfeiters face no such risk, because consumers of knock-off goods do not know who manufacturers their handbags or sneakers.

Brands can educate against counterfeiting practices in China

Additionally, brands can educate Chinese consumers about the criminals who benefit when a shopper buys a counterfeit good. Production and distribution of counterfeit goods are heavily controlled by ultraviolent Chinese triads, who traffic in narcotics and sex slavery alongside fake products.

Consumer awareness of the hidden costs associated with their counterfeit purchase can create shame and guilt that might deter some Chinese consumers from buying knock-off goods.

Anti-counterfeiting in China: The psychosocial approach

In the West, there is a shame that comes when one admits to buying counterfeit products, and luxury brands should work hard to foster that stigma in China. For some people, the regular purchase of fake goods is a normal part of life: many Chinese consumers who own fake goods assume that the luxury brands sported by their peers are fake as well.

In 2018 the Japan Patent Office launched an anti-counterfeiting campaign that revolved around embarrassing consumers who buy knock-off products.

It is too early to see the results of Japan’s shame-based anti-counterfeit strategy, but the premise is solid. Luxury brands effected by Chinese counterfeiting could emulate the approach, and work to create a social stigma against knock-offs.

Across the board, the most effective strategies to deter Chinese consumers from buying counterfeit products are shame-based.

Who is benefiting from the counterfeits industry in China?

China is responsible for more than 70% of counterfeiting according to the World Customs Organization. Where all the money from this industry is going? Alain Rodier, in his book: The Triads: the hidden threat, indicates that the counterfeiting is linked with Chinese triads. They are using the money received from counterfeiting to invest in other illegal activities. However, the money can also be legally re-injected into the country. Alain Rodier argues that criminal money is largely reinvested in the country’s legal economy: “As far as the Chinese triads are concerned, they would have a worldwide turnover of 200 billion dollars. Much of this money is reinvested in the legal economy”. For instance, the Sun Yee On triad would have largely participated in the development of Shenzen. Even though triads and other organizations directly benefit of counterfeiting, it can be noted that this money is sometimes reinvested in the legal economy.

Rethinking the fashion industry

One way of tackle the fake industry is to completely change the opinion of people concerning clothing. Trends should focus more on quality than brands. Fast fashion might also be a big issue in consumption because of its impact on the environment. If the fashion industry evolves to its simplest form, people would not be sensitive to brand image. Without the importance of brand image, there is no demand for counterfeit luxury goods anymore. Naomie Klein with its book “no logo” lead this movement in the end of the 1990s. One way to wipe out counterfeits is to educate people to consume goods differently, without being obsessed with brands.

To conclude, the counterfeit industry is a direct consequence of the industrial growth in the country combined with the value placed on brand image. It is difficult to tackle this gigantic phenomenon generating billions each year. You have both to address the production and the consumption of counterfeit goods. The counterfeit goods industry is injuring companies because it negatively impacts their brand image, consumers who are genuinely interested in the luxury products may lose faith that what they are buying is authentic.

What brands can do to avoid intermixing with counterfeits in China

For luxury brands to avoid being sold alongside counterfeits, brands can try a brand independence, or direct to consumers strategy in China. Counterfeits are sold easily on e-commerce platforms, but selling from a brand’s own website, or brand.com, is a surefire way to avoid competing with counterfeits and keep a pure brand image.

Authors: Alison Bogy & Enzio Cacciotto

Daxue Consulting helps you get the best of the Chinese market. Do not hesitate to reach out to our project managers at dx@daxueconsulting.com to get all answers to your questions.

Luxury brands in China do not have to compete with counterfeits

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The company Adidas Sports (China) Ltd entered China and built headquartered in Shanghai in 1997 with a core business of men’s and women’s sportswear and footwear. The company also entered the market of children’s wear in 2001. Adidas in China is one of the most popular athletic apparel brands, and is equal footing with Nike.

In 2019, the net sales of Adidas were shared by Footwear (57%), apparel (38%) and hardware (5%). Adidas represented 1.9% of the overall Chinese apparel market, equal to Nike.

Adida’s expansion into China

The Chinese market of Adidas is blooming. According to statistics, Adidas has a national distribution network of around 12,000 stores in China, reaching in more than 1,200 cities and expects to accelerate its expansion to 2,400 cities. It was stated to have 1000 more stores in China in 2019. Adidas is not successful worldwide but one of his important metrics is the speed of the sales growth in the Greater China. In this country including Hong Kong, Macau, and Taiwan, the German sportswear group has kept its growing trend. During the third fiscal quarter of 2018, the growth sales surpassed 23%, which indicates the 11^th successive fiscal quarter with above 20% growth rate.

In fact, Adidas witnessed a slump before sustainably growing in the Chinese market. While in 2008, Adidas had 14.9% market share, but it plunged to 9.6% in 2009. Adidas run a new campaign ‘Way through 2015’ at that moment. It aimed to expand to lower tier Chinese cities and opened more stores. The stores were designed to different needs. For instance, the tone of Adidas Women is gentle and soft. The strategy switched focus from ‘sell in’ to ‘sell through’, which means that Adidas aim to not only sell products to distributors but also empower them to sell product to the final-consumers.

Production of Adidas in China

Around 25% of Adidas’ products are manufactured in China. Although Adidas has been transferring some production capacity to countries like Vietnam due to rising labor costs, China still is an indispensable production base for the company, according to a recently conducted market research study in China.

Market Position of Adidas in China

Despite the market boom, international companies are being challenged by local rivals in the Chines market. According to Euromonitor, Adidas takes up 19.5 % of the total market retail value, followed by Nike at 19.0%, Anta at 11.1% and Li Ning at 6.1%.

According to the research, Nike was the third most popular footwear brand in 2018 in China. Adidas earned 80% of all Weibo engagement on activewear brand accounts in the one-year period studied. This was mainly generated by posts featuring its brand ambassador Qianxi Yiyang, a member of the superstar boy band TFBoys.

Strategies of Adidas in China

• Product and pricing strategy: Instead of competing with low prices alone, Adidas sought to expand into lower tier segments by enhancing both products and pricing.
• Multi-brand strategy: Adidas used different sub-brands to improve different aspects of the brand. For instance, the company’s “Originals” line strove to increase retail value sales share to enhance awareness of the brand. While Adidas NEO targeted teenagers of 14-19, priced about half lower than Adidas Originals, and helps the company penetrate into lower tier cities.
• Sponsorship strategy: Adidas increased its brand awareness by sponsoring certain sports events and activities.
• Innovation Product Strategy: Adidas actively released new products to attract consumer attention. For example, NEO Label released in 2011 targeted at younger customers by combing sports and fashion elements.
• Internet Strategy: Adidas entered the Chinese e-commerce market in 2010 by launching the online store, tmall.com. Adidas sought to reach consumers of lower tier cities and further develop its distribution network.
• Cooperation with Chinese designer to launch new products, e.g. Angel Chen.
• Hunger marketing: Yeezy series were greatly applied with the hunger marketing strategies. It was sold in limited amount; thus, a large number of Chinese consumers were queuing for hours just for a pair of Yeezy.

• Brand ambassador: Adidas chose some Chinese celebrities to be the brand ambassadors, such as Qianxi Yiyang, Yifei Liu, Lun Deng and etc. It raised a high engagement between the brand and the consumers in social media platforms. Each topic regarding the announcement of the brand ambassador reached more than 100 million views. The hottest reached more than 1 million discussion in Weibo.

Adidas during COVID-19 in China

Affected by the epidemic, the offline retail sector was worst hit in China. Adidas’s revenue in Greater China is decreased by about 85%, comparing to the same period last year.

• To stay presented, Adidas China put more focus on its online strategies. On February 20, 2020, Adidas hold its first online product announcement in Taobao live. It had more than 2 million views and gained more than 3 million likes. 6000 sneakers were sold in the first 10 minutes.
• Discount: Adidas gave both online and offline discount to boost sales.
• Online work-out lectures: On its official Wechat mini program, Adidas provided online work-out lectures for free to maintain the interaction with their consumers. Moreover, consumers can buy products directly from the mini program.

Future Goals and Directions of Adidas in China

• Adidas moved its Asian Pacific headquarters to Shanghai in 2019. According to James Grigsby, VP of Cities and Marketplace Transformation, Shanghai is an important city for Adidas which empower Adidas to build both domestic and international brand image.
• Sales of the e-commerce channel increased by 36% to 2 billion euros. Adidas is seeking for a balance between online and offline distribution channels.
• Due to the epidemic, basically all sport events were cancelled or postponed. Adidas should look for a platform to stay its presence and talk to the consumers.
• The company’s target annual growth of 15%-20% in China in the coming years (according to a market research in China).
• Adidas understand that a majority of their consumers (90%) would first approach digital platforms to get to know the products. The digital strategies would always stay relevant for Adidas.
• Back to 2018, Simon Peel, global media director of Adidas confessed that they over-invested in digital advertising. 77% of budget was spent on performance while only 23% on the brand. A commercial published on April showed a group of Chinese entertaining celebrities just within 60 seconds. Adidas was accused of putting too much effort in entertainment marketing and forgetting to emphasize its brand core value. Adidas might need to find its sweet spot to leverage entertaining marketing in China.

Today developers, designers, and managers are part of its creation center based in Shanghai, with constant new product concepts especially made for the Chinese consumers. For the group, it is a success that will be continued. Indeed, the group expects China to contribute to a large part of their global sales growth. They will then extend their sales from lower tier cities since they are more and more attracted to sportswear not only for fitness but for daily casual wear.

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This article Adidas in China: Reaching low-tier cities with high-tier products is the first one to appear on Daxue Consulting - Market Research China.

Tommy Hilfiger’s performance in the Chinese luxury market

In China, from 2012 to 2016, the sales performance of Tommy Hilfiger was remarkable and has become one of the most influential brand of its parent company, PVH Corp. PVH Corp is a comprehensive company that includes the brands such as Calvin Klein, Van Heusen and IZOD. Since 2012, its parent company has taken over Tommy Hilfiger’s business sector in China. Such a decision has enabled Tommy Hilfiger to expand and develop its markets directly and rapidly. Meanwhile, the company is able to utilize its sophisticated regional leaderships and infrastructure in Asia. Taking over the business of subsidiary in China is able to facilitate the global decision making and standardization the global strategy.

China’s market has been appeal to Tommy Hilfiger’s business. Since 2012, the year of takeover, the revenue of Tommy Hilfiger in China’s market has surged from 70 million USD to 0.14 billion USD.

By the end of 2016, Tommy Hilfiger had more than 357 retail stores in China. Among these stores, 65 of them are direct stores, 292 of them are authorized resellers. Before 2011, they had merely 100 retail stores. On average, the store area is 1,500 square foot.

Tommy Hilfiger’s China market strategy

Products embody both standardization and localization

Tommy Hilfiger has standardized its product segments all over the world. Nevertheless, Tommy Hilfiger has launched its special series in China that tailors to China’s market. According to the official Chinese website of Tommy Hilfiger, most of the products in China such as jeans, hoodies, shirts, etc. can be found in other markets. On the other hand, in order to tailor to China’s market, Tommy Hilfiger has launched the Chinese New Year series and joined-design series that feature popular Chinese celebrities. Celebrity endorsements have had a positive impact on Tommy Hilfiger consumption in China.

[Photo source: Tommy Hilfiger, ‘Chinese New Year series and joined-design series’]

Distribution channels of Tommy Hilfiger in China

TOMMYNOW: an innovated sales channel that boosts transactions and orders

Since 2016, Tommy Hilfiger has launched TOMMYNOW Snap, where Tommy Hilfiger customers are able to shop and order novel style of clothes in real time via the image provided by TOMMYNOW the fashion show. This turned out to be successful as the order had increased by 60% and many designed clothes were sold out. Afterwards, Tommy Hilfiger has implemented such a distribution channel in other cities such as Los Angeles, Milan, London and Paris.

Even though these fashion shows are normally held in Europe and North America, in 2018, the company selected Shanghai as their location for the first TOMMYNOW in Asia. Tommy Hilfiger consumers in China are able to purchase the new arrival while watching TOMMYNOW in real time.

[Photo source: Weibo, ‘TOMMYNOW’]

Digital concept stores implemented in early adopted countries

As digital technology is a growing trend all over the world, Tommy Hilfiger realizes that and keeps pace with the trend. In 2019, the company has shut down some flagship stores in United States. “Large scale of flagships stores should exist in the history instead of now as no one wants to enter such a grand store. Just like you would no longer be interest in the food if the table is filled with it,” says Daniel Grieder, the CEO of Tommy Hilfiger Global.

China has been a suitable business location for Tommy Hilfiger to exercise this idea. In 2019, Tommy Hilfiger had scheduled the launch of the digital concept store in Beijing and this is the first digital store in Asia. As Chinese consumers are early adopters in regard with digital branding, satisfying Chinese customer’s need will drive key success to the business.

[Photo source: Beijing Business Today, ‘Digital concept store of Tommy Hilfiger in China’]

[Photo source: Beijing Business Today, ‘TommyXYou campaign for Tommy Hilfiger in China’]

Tommy Hilfiger aims to follow the original style of store décor. Nonetheless, in order to feature the characteristic of digital technology, Tommy Hilfiger has established the digital shopping wall and intelligent fitting rooms. Moreover, TommyXYou is an intelligent platform that installs the function of intelligent clothes matching. Tommy Hilfiger consumers in China are able to select different types of clothes on the screen and try virtual fitting.

Online stores are highly localized to the Chinese market

As E-commerce is a current trend in China, Tommy Hilfiger has kept pace with this trend and set up a couple of online stores in the mainstream platforms.

Tommy Hilfiger owns its Chinese official online store. This is a common platform for Tommy Hilfiger consumers in China to shop due to its authenticity and trustworthiness.

[Photo source: Tommy Hilfiger, ‘Website of Tommy Hilfiger’]

Additionally, Tommy Hilfiger has also owned its online stores on Tmall and JD. Since these are the platforms that have earned lots of consumers in China, establishing online stores on such platforms are able to maximize its brand exposure and expand its customer base.

[Photo source: Tmall, ‘Online store of Tommy Hilfiger on Tmall’]

[Photo source: JD, ‘Online store of Tommy Hilfiger on JD’]

Tommy Hilfiger is more expensive in China than in the United States

On average, in China, the price of Tommy Hilfiger is more expensive that of the United States. According to both official websites in China and United States, take Men’s TOMMYMYXMERCEDES-BENZ series as an example, the average price is 154 USD in United States while that is hi RMB (199.8 USD).

This has been proven by Chinese people’s perception towards Tommy Hilfiger. According to Zhihu, there are topics regarding the price of Tommy Hilfiger being relatively high. Some users argue that Tommy Hilfiger has different positioning in different countries. In Japan and China, Tommy Hilfiger products that are sold in direct stores are mid-to-high end products. For those sold in United States are positioned as mid end products. Another argument is that the products sold in direct stores in China are European manufacturing with better quality.

Chinese consumer profile of Tommy Hilfiger: polarized customer groups

Even though Tommy Hilfiger products seem to be classic, the consumer profile of Tommy Hilfiger in China is polarized. According to Zhihu, some people agreed that this brand is most popular with middle-aged men as they perceive that the design is rustic, except for the jeans series which suit young men in China.

Tommy Hilfiger marketing campaign in China: celebrity endorsement

Leveraging celebrity endorsements in China

Tommy Hilfiger collaborates with popular Chinese celebrities.

The first Chinese brand ambassador of Tommy Hilfiger is Shawn Yue Man-Lok, a former Hong Kong actor and singer. He is also the global brand ambassador of Tommy Hilfiger. As Yue is in his 40s, some Chinese netizens argue that selecting Yue as the global brand ambassador reveals the major target market in China are consumers aged 30-40.

[Photo source: Weibo, ‘Shawn Yue Man-Lok, the global brand ambassador of Tommy Hilfiger’]

Moreover, Tommy Hilfiger China has also collaborated with Junkai Wang and Zhengting Zhu, the stars in China that are popular with people aged 15-25. As celebrities in China are able to influence Chinese consumer’s behavior, Tommy Hilfiger’s collaboration with these stars is able to drive income stream from Chinese young people.

[Photo source: Weibo, ‘Zhengting Zhu, the brand ambassador of Tommy Hilfiger in China’]

[Photo source: Weibo, ‘Junkai Wang, the brand ambassador of Tommy Hilfiger in China’]

Promotion channels of Tommy Hilfiger in China, on mainstream social media

Tommy Hilfiger has set up its social media accounts on the mainstream social media platforms, Weibo and Xiaohongshu as means of promoting their brands to Tommy Hilfiger consumers in China. On Weibo, Tommy Hilfiger has 318,005 followers while the figure of Xiaohongshu is 2,708. As a global brand, Tommy Hilfiger’s popularity in China can be improved significantly since the number of followers is comparatively low.

Tommy Hilfiger China shares photos of models or brand ambassadors in their clothing on Weibo. It is an effective way to promote different products and instruct Tommy Hilfiger consumers in China what to where in different social occasions.

[Photo source: Weibo, ‘Home page of Tommy Hilfiger on Weibo’]

[Photo source: Xiaohongshu, ‘Home page of Tommy Hilfiger on Xiaohongshu’]

How the Coronavirus outbreak has affected Tommy Hilfiger’s business in China

The Coronavirus outbreak in China has affected many industries in China, especially retail. In February 2020, PVH Corp announced that Tommy Hilfiger China shut down some of the retail stores temporarily due to the decreasing customer flow at shopping centers and concern for employees and business partners’ health. Even though such an action has affected the business performance of Tommy Hilfiger in China or even Asian-Pacific region, it seems to be a feasible solution under such a serious circumstance.

Chinese people’s perception towards Tommy Hilfiger: Overpricing the number one issue mentioned

Although Tommy Hilfiger is a famous brand all over the world, some Chinese people have negative perceptions towards the brand. According to Zhihu, some users commented that products of Tommy Hilfiger are expensive and overpriced in China. Furthermore, some of them labeled Tommy Hilfiger as a high-end brand in China while being a low-end brand overseas.

[Photo source: Zhihu, ‘Chinese people’s perception towards Tommy Hilfiger’]

Tommy Hilfiger has localized their marketing strategy but not all their products

The American luxury brand has proven their success in China leveraging celebrity influence to market to middle-aged people. However, their positioning as an aspirational brand is muddled by the perceived price-quality gap of Chinese consumers.

Author: Amelia Han

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This article Tommy Hilfiger in China: Digital marketing and celebrity endorsements is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below

Matthieu David: Hello everyone. I am Matthieu David, the founder of Daxue Consulting, the China market research company, and its podcast China paradigm. And today is very special. I have two guests at the same time from Hong Kong – Kanch Porta Panjabi and Kate Padget-Koh. So, you have a very long entrepreneurial story, and you decided to work together on and to put your resources and your experience into a company called Fashionable Futures, a consultancy based on sustainability in the fashion industry. 

You provide strategy consulting to those brands who want to build a branding strategy. And you have a very, very strong experience in Asia, Hong Kong, China by being working in big companies like Li & Fung, Puma, for the UK for instance, and to build your own brand, which I feel is a very, very different experience; very, very different story. And altogether you are providing a consulting strategy for those brands who want to adapt for the coming years with some values you insist on, and I want to already talk about them, which are sustainability in the fashion industry, and that you insist a lot on it in your presentation, and transparency. So, in order for people who listen to us to better understand, would you mind sharing a bit of some case you have been working on for the Chinese market, let’s say Greater China?

Kate Padget-Koh: Can we talk a little bit about how we operate just so that your listeners can understand more clearly?

Matthieu David: Sure.

Kate Padget-Koh: Okay. So, we work with a number of products. We basically work in three areas. We work with large brands that want specific projects done around sustainability in the fashion industry, innovation, and strategy. And they may be, they are probably in the midst of a transition of – coming from how they have been operating for some time. We are all very aware of the disruption in the fashion industry in China and worldwide, and the fashion retail business. So, we work with them to really look at how they can fast track any transformation they are currently engaged in. 

Secondly, we work with small brands and these small to medium-sized brands who really want to start on that sustainability journey. They may be so far into that but then again want to progress it. And how we do this? We do one on one consulting and we are just launching an online program for small to medium-sized fashion brands, and actually anyone in the fashion or associated space. It would also be suitable for the beauty industry and so on. So, we see that we need to get our message out there quite extensively. 

The third part and this is probably also very relevant for China too is we work with Chinese fashion manufacturers. We noticed that Chinese fashion manufacturers or manufacturers of apparel have been facing many challenges, and especially in China due to the trade war so that they are looking for ways that they can progress themselves and become manufacturers of the future. And that’s really what we are here to do. We understand this space very well and how we operate is to really help companies navigate these challenging times.

Matthieu David: So, to summarize, you segment into two different – three, sorry – three different offers: one for big brands, one for small brands, and one for Chinese fashion manufacturers and others around the world.

Kate Padget-Koh: Yeah, correct.

Matthieu David: And with all of them you work specifically and you insist again on the word sustainability. Before we go a bit deeper, how would you define sustainability in the fashion industry? I feel people may use it this word for different reason – the business is sustainable when it’s making profits in some way, it’s sustainable when it will start affecting the environment and the stakeholders around them, it’s sustainable when the brand is solid enough to actually continue to exist after the CEO may be replaced and so on. So how do you define sustainability in the fashion industry?

Kate Padget-Koh: It’s a very good question. And we actually have one part of our online program around this word because it’s rather overused, and it’s really, it is to sustain over time. I think Kanch can talk a little bit more about what we mean by sustainability?

Kanch Porta Panjabi: Yeah, sure. So, you know, sustainability focuses on meeting the needs of the present without compromising the ability of future generations. So, to us really, sustainability in the fashion industry is – we understand businesses need to make a profit, sure – but for us, sustainability is really about making a product that is not harming the environment that we are and our future generations. So, whether it be producing new clothes or upcycling or reusing or remaking, it’s about how are you affecting the planet while you are doing that, and the planet in different areas. So, it could be – so, I think for a lot of brands to do everything is quite difficult. So, it could be that you focus on water, it could be that you focus on the social aspect, it could be that you focus on solar. So, it really just depends on what the brand is doing. But I think sustainability in the fashion industry is a big word, and under that, you have different umbrellas. Right? Is there anything else you can add to that, Kate?

Kate Padget-Koh: And I think a lot of it is around being conscious of what you are doing. We are at a time where, you know, it can’t be just growth, growth, growth. We have a lot of – like if we stopped buying clothes, all of us, and we didn’t buy anything for the next five years, we would be fine, right? All three of us. And for fashion people like us probably a bit longer. If I don’t buy anything, for the next 10, I am fine, right? So, what it is, is we are never going to stop buying fashion, we are never going to stop being engaged in fashion. But what is the future of the fashion industry in China and worldwide? When we look at it from a conscious perspective, another core part of what we are doing is design thinking and creating designers of the future. We see sustainability in the fashion industry is very much about building future leaders.

Matthieu David: You talked about manufacturers and Chinese fashion manufacturers as a third segment. The image we have of a manufacturer is to be very pragmatic, to provide products for the brands they work for, maybe at some point to create their own brand. But what is leading them to think about sustainability in the fashion industry? What do you think is pushing them to think about sustainability? I am not talking specifically about the Chinese fashion manufacturers, which may have many other issues than thinking about also stakeholders or the future in the coming 5 or 10 years.

Kanch Porta Panjabi: Well, I think, like yesterday we had this conversation with somebody and it’s the customer, you know, the customer overnight is going to become demanding and say look, if you want us to work with you, this amount of the collection needs to have these values around sustainability. So, if they don’t change, then.

Matthieu David: I see.

Kate Padget-Koh: Irrelevant.

Kanch Porta Panjabi: Yeah.

Matthieu David: I see. I see.

Kanch Porta Panjabi: And it’s not just like the small brands, it’s like the big brands, it’s everybody you know. And I think we’ve seen it happen progressively the last five years but I feel like in the next two, one to two years, it’s going to be like overnight.

Matthieu David: You define sustainability in the fashion industry in a very broad way and not to damage your future – no, the present work and action don’t damage the future. How does it convert into actions with the work you do with big brands, small brand manufacturers?

Kanch Porta Panjabi: Do you want to tackle that one, Kate?

Kate Padget-Koh: Sure. So, I think that critically we look at what is – why do brands do what they do. And we get them to look at what they are doing, their operations and why they exist and what they want, how they want to leave the world. So, you know, it’s very much about legacy and impact. So, if a brand is operating in a particular way, it has been that – oh we get fashion to as many people as possible at an affordable cost. But we also know that there’s been a cost to that, right, an environmental cost? And also, for the past – what – 20 years, we’ve trained generations to buy and consume clothing, and, maybe wear it once, maybe not wear it. I think I went a bit off your question. Sorry. 

So, what we really want to look at is a brand should be very conscious of what they are doing in their activities, do they look at materials? Do they look at their impact on water? Do they look at end of life? You know, there will be a requirement. We were having a conversation yesterday with some contacts we have and they work with some fast fashion companies in the fashion industry in China and worldwide. And there is a requirement that a significant percentage of the business that they provide to that organization, to that fast-fashion retailer must meet a certain sustainable criterion. That criteria covers factory certifications, material requirements, impacts in water and they are operating in China.

Matthieu David: So, if you work to – I mean with your clients, to assess what to do to actually work on the transformation with them and implement it, what do you specifically work on?

Kate Padget-Koh: We look at how you begin that journey because it is a very complex subject and our superpower is to make it simple. So, we take a very complex subject and we make it simple and manageable. We are not technical in the respect that we do not measure energy and we do not test the water and so on. But we do have very strong partners who we then would hand off to. So, what we see is we see that we are able to help brands navigate that world, that sustainability conversation because there’s a lot of information out there. It’s very confusing. And people are very concerned about saying and doing the wrong thing.

Matthieu David: Yeah, and the risk is too.

Kate Padget-Koh: Yeah, the risk.

Matthieu David: And the risk could be to be only words, right?

Kate Padget-Koh: Yeah. And everyone is scared that they are accused of greenwashing. They are scared that they get something wrong. And then, you know, they don’t do anything. And it’s really for us is to shift that, to have them and really for them – we also come from a place of – we are not saying is that you are doing the wrong thing, you should be ashamed of yourself, there is none of that. It’s about enabling the next generation of the fashion industry in China and worldwide, really.

Matthieu David: I go back to the first question; would you mind sharing one or two specific cases in the past you have dealt with?

Kate Padget-Koh: Okay. So, we have manufacturers who – so if we look at Chinese fashion manufacturers, there is a lot of challenges we know around the trade war and they now are at the point. So, we have one group who operates in, they are specifically from China, but they also have offshore sourcing and manufacturing. And they are working with some pretty well-known companies but the huge capacity of their China production now cannot be, that US brand does not want to take it, right, because of the trade war impact. So, what they have to look at now is – suddenly they are faced with, what are they going to do? The model is broken. We don’t know what it’s going to be, how things are going to be in the future, and so they’ve got to look at who they are going to serve in the future. You know, it’s always been an issue in China that they go from the US and then something happens in the US and they run to Europe, but this also isn’t sustainable. So, we are now working with them to understand what is next – like how they can become more sustainable in terms of not so dependent upon their legacy customers. And this is obviously quite complex.

Matthieu David: Does it mean that you are also working with them to build their own brand?

Kate Padget-Koh: It can be but I think we are also, you know, that’s been happening in the last 15 years, let’s say. What we also see is if companies are big enough, then they may want to be working with existing brands, you know, whether they are introducing them to the Chinese market, they are actually investing in them, they are investing in innovation. I think this is a very interesting area. We have a lot of innovation, which needs to happen and how can manufacturers be partners in that? There is a lot around education for the future also. And we were on a call yesterday with a – it’s related to, kind of a very well-known educational institution, and they want to do design leadership. And it is a China challenge. So, it’s how they can progress at speed, sustainable innovations around critical materials. So, let’s say, denim, cotton and really educate designers of the future. So, Chinese fashion manufacturers can become part of that educational process too.

Matthieu David: So those values which are sustainability, and I am going to elaborate more to add transparency as well because you mentioned it in your presentation – how is it different in China and in the West? Are you seeing different uses? Are you seeing different maturity? Do you see some differences?

Kate Padget-Koh: I will speak very briefly about this because I know that you are – it’s a bit of a tricky question, right. In my experience, the majority of what I have worked in have been overseas brands who are operating in China or Chinese fashion manufacturers who are producing for those big brands. I think that transparency, it’s tricky. And I am surprised that that’s in our presentation because I am very careful about speaking about transparency – that is something which we have to, you know, it has to be proven, right?

Matthieu David: So, for your information, you mentioned ultra-transparency actually in your presentation. It’s on slide three. And I felt because you were using the word ultra-transparency, it was a key element. So maybe I misunderstood.

Kanch Porta Panjabi: I think that – if I can just share here – I think it’s really, for us the ultra-transparency is for brands to see that that is the future. We were at a conference a few weeks ago and there was a Hong Kong company actually – called – it’s very famous called Chicks. And they had started a program with blockchain where they were tracing the garment from production to end. So, the consumer had like a barcode, you could go with your phone, press on the barcode, and you know where the yarn comes from, you know, you know. So, I think for us transparency is really about that and the process in that. Now, in terms of factories and stuff, I think there is a progression that is happening over time. It’s not very fast but I think for us that is the goal, right? I mean, and I think now the consumer if you – the millennial generation, for example, they are very – they care a lot. They want to know where their clothes are made, how they are made, which farmer made them, is there any kind of social impact? So, I think for us transparency is about that really, about knowing where things are made. And again, as Kate said, it’s not about perfection, you know. 

Obviously with the big companies, sometimes it’s hard to know, so many layers it’s hard to know, right? So, like, for example, when I had my own brand, right, I used to go to China, go to the factories, sit with them, see how it’s being made. So, for a smaller brand, it’s easier to control in a way what’s going on whereas, for a bigger brand, there are so many layers of it, and now they are getting the customers aware. So even these bigger brands, they have to figure out how to do this transparency thing and to do it right, and to do it in a way that’s authentic and not misleading. So, I think for us that’s really what that is about.

Matthieu David: Transparency has trustability to be able to trace where it’s come from. Why, why, why Kate, were you saying that you were cautious with the word, with transparency?

Kate Padget-Koh: I just think around a China conversation. We don’t always know where? Not in my world or my experience in the past but generally, there can be questions about whether things are authentic. However, what I also want to bring into the conversation is, we also – in China, there is so much incredible innovation that is happening. And we have some clients and partners that we work within the South that are doing amazing supply chain solutions, which are fully traceable, which are really progressive. And I think that’s really exciting. And this is just the beginning. So, we know that there have been companies that have just set up in Hong Kong because of the access to South China and all the innovations that are happening. And I really think that we are in a very unique position to be able to – for new brands, this is an ideal place to operate from – the ease of doing business and the access to the rest of the world and to sustainable innovation is really valuable.

Matthieu David: That’s a very good transition to another set of questions I would like to ask you about why should someone create a fashion brand in China? When do you need to create a brand? I remember I had this conversation with a Chinese, I want to create my brand. And I asked her why? Because it’s mine because it’s me. I want to create a brand because it’s me. Is the will to express yourself in the product enough to create a fashion brand in China? How do you analyze this?

Kate Padget-Koh: Yeah, this is really good because we talk about this all the time. We talk about it a lot. I’ll speak about it briefly and then Kanch will take over. So, nobody needs to create a fashion brand in China. We have so many brands; it’s probably the easiest to do ever. And there are influencers – whether they are from China, whether they are from other parts of the world who really want to create brands, right? And there is no need for anything more. From my perspective, there are two reasons why you want to create a fashion brand in China – that the example you just made, which is ah well, it’s mine, you know. And I would say that’s probably from – I want to put something out there. You could say it’s kind of like ego to have a brand that is yours. The other part of it I see which I think is extremely valuable is, for example, what Allbirds or Reformation or those kinds of brands where they have created brands which are educating customers to be using sustainable products to look at how they engage in fashion industry in China and worldwide in a way which is conscious, which is considered. And I think the future of a lot of brands is, – it’s a duty to provide something in the world which is educational and is a conscious way to engage with fashion.

Kanch Porta Panjabi: Yeah, I’ll just like end a little bit on that. But I think I totally agree with Kate. I think we don’t need more stuff. There is a lot of stuff out there and you can find what you need with all this stuff out there. So, I think if you create a fashion brand in China, there really has to be certain values that you want to educate the world about. So as, you know, Allbirds or Beha, all these, they’ve got a real stand, and that’s what they want to sell to the world. So I think if you have a real stand and a position, then yes, by all means, go ahead, create a fashion brand in China but if it’s something you want to create because it’s yours, that’s fine but I don’t think that’s a strong enough position because there are so many things out there. So yeah, you have to have some kind of educational aspect to want to get out there. And, at the same time, of course, it has to be beautiful, it has to be respectful, it has to be so many more things that the consumer is now demanding. 10 years ago, when I started my brand, there was no – net afford had just started. Online was not even big, there was no Instagram, you know. So, it’s much easier to create a fashion brand in China but I think it’s also much harder because there is so much more out there and everybody has access to everything. So, yeah.

Matthieu David: So, you just said that if you find out a segment where you need to educate a population, your potential clients, yes, it could be a good reason to create a brand. How do you find those segments? Maybe it’s your work. How do you find those segments where there is still a gap to create a brand? How do you find what is going to be fashionable? And you – actually if I understand correctly but maybe you will correct me, sustainability in the fashion industry in some way is the new fashion. There are good reasons to adopt this fashion, but it’s a new fashion. So how do you – first thing, how do you assess those gaps where there is a need for education and a new product which conveys those messages and education? And secondly, how do you know what’s going to be fashionable?

Kanch Porta Panjabi: Well, I think market research, you know, to see. If it’s something like okay, I want to create – going for the purpose of creating a brand for sustainability in the fashion industry, then it’s, you really have to see what’s out there and what is the products are like, you know, the guys. Again, the guys who created Allbirds, right? It was like nobody was using wool with a shoe at that time, right? And so, it was a very new concept and they spend I think like, I don’t know, at least over 10 years in just developing the product, and that they had over 150 prototypes before they got the right one. So, I think its market research – having an idea and also having a connection to the idea. 

So, like I think the founder of Allbirds, he knew a lot about farms and, you know, and so it’s like there has to be some kind of connection as well. So, first, obviously, look at the market and then like a connection, find a connection to you, like that’s really a deep connection, have a reason for doing it. So, I think that’s and then, market testing consumer, go out to the consumer and see what is it, what’s the consumer feedback? I think what a lot of people do is they say, okay, I am going to create this brand, start something and then go out and test the market. But then it’s too late.

Matthieu David: I think this is contrary to what the image we have of a creator who is going to stay alone, create his own pieces and so on. What you are describing is actually a process where you listen to society, you listen to the consumers in order to create your brand. Is it the same way we create brands in the 21st century?

Kate Padget-Koh: Definitely. Social media is so active people are constantly engaging with each other. And, you can put anything out over there. And even if you are really supremely creative, you are some kind of outlier, your need to put that in front of people is so great. And I think the younger generation who will be the brand creators of the future, they are so used to engaging with others around their creations and getting feedback. It’s just very, very different. And I think there is another part to this question, which is what are the brands of the future? We still have a lot of problems to solve, like if you look at the whole of achalasia, for example, how do you take all the – for want of a better word, plastic out of achalasia? How do you do that? Like if you could just remove a lot of the man-made fibers out of one category was massive, then how all the conversations around end of use, I think that’s getting – end of life that’s getting much more, people are much, much more aware of that. In Hong Kong we have several companies which are doing – they are repurposing, kind of like reselling luxury products or children’s products or whatever. And then, there are so many ways that we can engage with products when we would normally have stopped now. And then the whole rental thing, we can just see that these different ways of engaging with the fashion industry in China and worldwide escalating.

Kanch Porta Panjabi: And innovation, I think that is also another big – So we were in Paris a couple of weeks ago and we were at this forum and there was somebody from the US who started doing this where they took the fabrics and then made it into a liquid state and then made it – separated it and made it back into the solid-state. And it was like carbon fiber and the carbon fiber was going to be used in cars. So, it’s like, you need some kind of innovation, especially like the end of life, end of use. So, finding an innovation as well. So, I think if you are creating a brand that’s something, that is key in today’s world.

Matthieu David: When I listen to what you say, I feel that you – there is a lot of proximity with the brand and ideology. You bring in a new set of beliefs, a new set of behaving. Maybe if Marx was born today, he would create a brand. So how do you feel about it? Actually, and to be honest, it makes the fashion industry in China and worldwide much more attractive to meet you because it conveys much more than just a logo or just a design. And I feel that it was more of the case like 30 years ago.

Kate Padget-Koh: Definitely. It is an ideology. It’s a philosophy. It’s a way of looking at life. And I think – I know for both of us, we got into fashion because it expressed something, certainly, for myself, I saw it as something which had values and had credibility and respect and it was something beautiful, and it’s something which impacts people. I don’t know if every – like you just said, I don’t know if everybody has that view of the fashion industry in China and worldwide but certainly that’s how I see it, and certainly to resolve some of the issues we have around environmental impact. That’s the way it can be dealt with going forward.

Kanch Porta Panjabi: Yeah, and I think with the thing that happened is with fast fashion, we lost a little bit of the soul, because when I created my fashion brand in China, my collections, and I am sure Kate probably the same is like, we really went into study something like, I don’t know. For example, the collection was about dance, right? Then you went there, you studied dance, you really understood the movement, you did drawings, you did twirling. And then from there came like a five-piece collection, which was, you understood there was like a reason why every fold was in its place, why – I used to do my own prints – why every print had some kind of or what was your message in the print to the world? With the fast fashion, you just kind of lost that. It was like quick clothes, cheap prices and so to me it seems like it’s going, like it’s a cycle, right? And now the younger generation again is back in this thing where they care like I mean I have two kids, and I am sure that in a few years when my son is buying his own clothes, he is going to be questioning. It’s no doubt, so I think yeah, it’s a cycle maybe.

Matthieu David: Should everything be online? You mentioned that it’s very easy now to reach out to the clients, consumers and you have so many tools; and the opposite Kate, you mentioned that transparency – we have to be cautious with this word. Should everything be online for a brand and I am specifically thinking about the luxury brands which are always very slow actually to disclose and to be everywhere? They were very slow to go online to have their first website; they were very slow to open their first e-commerce website as they are very slow to go on social media. They don’t really know how to communicate out of the shop, I mean out of the boutique. Now they know, but it took time. So, what about – should a brand, be everywhere, put everything online?

Kate Padget-Koh: When you say put everything online, do you mean to sell?

Matthieu David: Oh no, I am thinking all communication, all transparency? I would – if we go up to the full meaning of transparency, you would actually put cameras in the office of every brand to show how they work. So, should we go to this extreme where actually you see everything about what they do and how they behave internally? How is it? Is it diverse? Is the team diverse? Do they behave respectfully to each other? And then you can show it with cameras everywhere. So how far do you go?

Kate Padget-Koh: I don’t know if that is going to happen. I don’t really have a point of view on that. I think we get so much stuff online, that we are already overwhelmed with information. I do think that it’s great because Nike and a number of companies will publish their suppliers. They are happy to share. So, I think sharing is valuable. When there is no sharing, whether it’s relevant or not, questions are always asked, what are you hiding, right? So, this one thing which we’ve become very aware of and very happy about is that when we talk about sustainability in the fashion industry, it becomes less about competition and more about collaboration. So, people are willing to share information, they are willing to – you know, even with competitors because they see that, we’ve got something to do in the world that is important. Otherwise, you know, whether we’ve got 11 years left or whatever that is, if we don’t do something together, this is not the time to be competitive. So, I think that’s how I would answer your question.

Kanch Porta Panjabi: Yeah, I think I agree to it. I think, you know, the fashion industry in China and worldwide has always been very linear and you see it getting more circular in terms of like the brand’s collaborating and I think yeah, online – definitely you need some kind of presence. Again, how deep you go and what the relevant information that you share, but also, like in-store and I think a physical presence is also necessary. So, I think you need to have like a mix of both in a way whether it’s like via pop-ups, whether it’s – this in terms of like representing and selling your product. I think you still need that; people still want to touch and feel and see, especially in Asia. Okay, maybe in the States, you are in a little town and you want to buy something from New York, you are not going to drive 10 hours, but like in Asia, I think people are still, the proximity is still relative enough where people want to go to the store.

Matthieu David: Talking about China more specifically, are you seeing some brands? Do you have some brands in mind which convey what you are saying, the insistence you have on sustainability in the fashion industry? Do you see some brands which are built on maybe older brands or new brands that are built on those topics you are mentioning?

Kanch Porta Panjabi: I think this – what I find very interesting in China is the luxury children’s market because they are very conscious of what their children are going to be wearing. And they have a very high-quality commitment. And, I can see where that comes from. And I believe, from the research I’ve done in this area, they are miles ahead of the majority of other countries. And that’s, you know, it’s very much their connection with their kids and how the future generation is careful. So, I do consider that has been very relevant and valuable.

Matthieu David: Interesting.

Kate Padget-Koh: I can’t – sorry, I can’t think of the name of a brand off the top of my head for you.

Matthieu David: Okay. Okay. We are heading to the end of the interview. And we have a couple of questions, you know, at the end of every interview about books, about what you are witnessing in the market. So, what books have inspired you most as entrepreneurs, as a brand?

Kanch Porta Panjabi: How long have you got? I’ll start with the one I am reading right now, and I gave it to Kate as well.

Matthieu David: If it’s a good one.

Kanch Porta Panjabi: Yeah, it’s called Fashionopolis. And yeah, it shares basically the history of the fashion industry in China and worldwide and also the future of fashion and where it’s going. So that’s what I am reading at the moment. And it’s yeah, it’s very – 

Matthieu David: Who is it by? Who wrote it?

Kanch Porta Panjabi: I’ll tell you; I think it’s John or Thompson or something like that. I’ll just let you know in a second. Let me check.

Kate Padget-Koh: Actually I – yeah, I have it in front of me. And I, what I – there is a number of books but quite honestly anything about fashion, it becomes irrelevant very quickly. So, the business of fashion – the publication, is fantastic. It’s so good. And I think also The Financial Times had, especially weekend, you know, that it has a lot, there is a lot of subjects around in there and I think any – I would tend to read more from those publications. And it’s also – I don’t want to say my laziness but my short attention span that I tend to read from publications than books at the moment.

Matthieu David: I see. So, I thought the second question I had – how to stay up to date? I understand it. 

Kate Padget –Koh: Contests. 

Matthieu David; Which ones are interesting about fashion?

Kate Padget-Koh: The business and fashion were fantastic ones.

Kanch Porta Panjabi: Yeah, very good ones. And then there are some really good ones like Finding Mastery. Although it’s not related to the fashion industry in China and worldwide, he interviews like very high performing individuals. And so, it’s like really good for business people because like how do you have more productivity? Everybody wants that, right? Everybody wants to.

Kate Padget-Koh: And then the other – there was one other series of books, sorry. It’s Harvard Business Review. They do these little manuals on different things and they did like one on resilience, one on focus. And I think if you are an entrepreneur and a business owner, that’s definitely like – it’s very helpful.

Matthieu David: If you had extra time, what would you do? What other business you would add?

Kanch Porta Panjabi: Sorry, we have a lot of ideas.

Kate Padget-Koh: I have another business. I am an artist.

Matthieu David: Any idea you’d like to work on? Do you feel another value in the market on top of sustainability which is taking off, for instance, as a topic?

Kate Padget-Koh: I think, I can only – I am thinking of what Kanch is going to say and how.

Kanch Porta Panjabi: I think, you know, for us, we have many projects that we would like to do – something around the blockchain. And then I have another project which is around F&B and, vegan and plant-based. And yeah, Kate and her art and fashion from that. So, I mean we have a lot of projects and just not enough hours, I think.

Kate Padget-Koh: Right now, we are very focused on this consultancy, but we, you know, we constantly have ideas.

Matthieu David: What unexpected success you have witnessed over the last, let’s say, three years? Something you would not have expected to be successful to work and actually became massive and worked very well?

Kate Padget-Koh: Are you talking about other brands or?

Matthieu David: Anything you have witnessed in Asia during speaking China more specifically, that you were not expecting to succeed? Giving you an example, 10 years ago when I arrived in China, people were still paying cash to get anywhere online. And now it’s all – everything is digital and WeChat, and much more advanced and it’s the west. So that’s, for me, very constraint. So, what have you witnessed which could have been a constraint for you three years ago, but is happening now and it’s becoming successful mainstream?

Kate Padget-Koh: I think there are so many things, of course you know, payment systems as you were mentioning. Also, with the way that Alibaba and a lot of those, Taobao and so on and a lot of those platforms, how huge they’ve become and how much more advanced they are in AI and data than anyone in the West. And I think, it’s – and also the infrastructure development in China. I mean earlier this year I took the bridge from Hong Kong to Zhuhai, and, you know, the ease of going through immigration and all of these things, which 10 years ago and when you arrived, do you remember? Just how much the infrastructure has changed and also cleaned up. I mean Shanghai now is a very beautiful and relatively clean city.

Matthieu David: Yeah, yeah. Kanch, what were you saying? What has been surprising to you?

Kanch Porta Panjabi: It’s on the hi-speed train.

Kate Padget-Koh: Yeah, yeah.

Matthieu David: Yeah yeah. And the opposite – what have you seen as a failure over the last three years? You would not have expected to be a failure?

Kate Padget-Koh: You know where we live? To that, that – what we are dealing with currently.

Matthieu David: Okay.

Kate Padget-Koh: We never expected this.

Matthieu David: Okay.

Kate Padget-Koh: To the extent as this.

Matthieu David: I see, I see.

Kanch Porta Panjabi: Yeah definitely. Well, I think on a grander level like for me being Indian – education, because if you, like you know, coming from India and focusing a lot around there, you see masses, most of the population is still uneducated like not being able to read or write. And I think for me, that’s like, considering that we have internet and everything is everywhere, it’s just like the contrast. I feel like that is just – at some point like that doesn’t work, you know.

Matthieu David: Yeah. In 2019, yeah.

Kanch Porta Panjabi: So, I think that’s kind of a shame.

Matthieu David: Thanks for your time. I hope you enjoyed it. And it will be published I believe in 10 days.

Kate Padget-Koh: Okay.

Kanch Porta Panjabi: Perfect. Thank you.

Kate Padget-Koh: Thank you.

Matthieu David: Thanks for listening.

Kanch Porta Panjabi: Take care.

Matthieu David: Bye everyone.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

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This article Podcast transcript #85: A Hong Kong-based consultancy bringing sustainability in the fashion industry is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below:

Mathieu David: Hello everyone I am Matthieu David, the founder of Daxue Consulting, a strategic marketing research company in China and its podcast China Paradigm and today I am finally with Dominic Johnson here – I am saying finally because we had to reschedule two times and I was very excited actually, two times to have you in the show and finally it’s the third time it’s working.

Why I was excited is because you are a veteran entrepreneur in China you have been in China since 1995, and you started Plastered which is a design apparel company in China, but it’s more than this and I think what we need to discover it’s more than this that’s why I found out through your website and by doing more research – since 2006 so before the crisis, before when we found out that China was becoming a big country, a big economy you were in already China. You are selling not only in Beijing because it didn’t mention but you are very Beijing located you are in Nan Luo Gu Xiang, the place to be in Beijing, the place you visit when you go to Beijing, and now you are selling in more than ten locations worldwide. You have also been a TV presenter, you have written a book for entrepreneurs “China Dream,” and you have been spoken in many, many MBA – eMBA’s sixty Chinese Universities as I read online. Thanks, Dominic, for being with us. 

Dominic Johnson: Hey, thanks, that’s a hell of an intro. First of all, I didn’t like the word veteran at all, which makes me sound very old but maybe a war veteran. I have been in China for 25 years now, but thanks for that. Yeah, I mean you know what – as anyone who has lived in China knows, it’s the land of opportunity, the economy has been booming since I got here in – well 1993 I essentially arrived and so much about entrepreneurship is being in the right place at the right time. I see so many great ideas fall flat just because of timing and for me, I arrived at the right time and there are opportunities everywhere, so I ended up ceasing a lot of opportunities and just being very fortunate to start my design apparel company in China in the right place at the right time. 

Matthieu David: That’s something actually I’d like to talk about , later on, to be at the right place at the right time. I see a lot of entrepreneurs say – who are in China say now that they could not do the same right now, but that’s something I’d like to talk about later on. First, about what you do now, what’s your business of design apparel company in China, could you describe it in more details. so, you are selling clothes in specific location which is in Nan Luo Gu Xiang in Beijing for those who are in Beijing, I guess they all know Nan Luo Gu Xiang that’s the core business. It’s designed apparel and I think for the ones who are watching the video they can see some of the designs behind you, but could you tell us more?

Dominic Johnson: Right, so it started off very simply. Nan Luo Gu Xiang is very famous in  Beijing but I moved to live there in 2003 with my family into an old shared courtyard house with my family and 5 other Chinese families and then one day I had a random idea which was to create some Beijing T-Shirts and just with a very small amount of money I designed and printed a small collection of some quirky T-Shirts, and I opened the very first shop on the street. There used to be a residential street but then I opened a shop there the rent was cheap and it was close to home, I didn’t have much money, and you know ten years later it became the busiest retail street in Beijing and  public holidays it gets a hundred thousand people a day, so it’s one of those kinds of crazy Chinese stories.

 And so, it started off very much as quirky T-Shirts, taking iconic objects and things that were Chinese elements in art design, like old subway tickets, old mugs, old thermoses – I made them into images and created a kind of an iconic Beijing T-Shirt brand. At the beginning, as the brand is about foreigner’s view of Chinese aesthetics, it was mostly foreigners who were buying my stuff but then as I started to attract media attention I slowly moved into the Chinese consumer market and then as the brand grew instead of just taking iconic objects I started to work with more artists and then I became a conceptual artist and I provided ideas and concepts to artists you know in China and now around the world to create much more detailed and technical illustration artwork as we grow the brand, and then the business also grew to become an agency so now we do interior design and art installations and sculptures for other brands. Yeah, so my design apparel company in China kind of started very small and very simple, I invested a tiny amount of my own money which is all I had at the time to open this little shop and then it’s kind of grew organically and so all this opportunity came my way and – yeah right place right time. 

Matthieu David: Could you tell us more about how you design your brand? Is it yourself who designed the T-shirts initially or you partner with artists? Could you tell us more about you foreigner’s view of Chinese aesthetics? 

Dominic Johnson: Right, so the creation is I am the conceptual guy so I can’t draw, I can’t paint. I can’t even use design software – but I have a lot of ideas and those ideas come from really, I’ve lived in China for so long, I am a very visual person. I didn’t do very well at school, and I left England when I was about  eighteen and traveled around the world and eventually arrived in China as a backpacker.

And so, I never thought I was creative or even had a design skill, I just decided to try designing by working with other people. So the design process now is very much – I have ideas and concepts, I write them down then I look for talent online and at events, and as soon as I find the artist who I think has right aesthetic or has a certain skill set that I think will work with the concept, and then I put the concept and the artist together and I work with them very closely to create Chinese elements in art design. The design behind me is a Japanese artist and the concept is very simple it’s a Chinese revolutionary ballet girl, it was an art form the 1960s – 70s when they banned western art influence in China and instead of having ballet they had girls doing ballet but in Mao suits and guns, and so I turned that into a sort of a pop – you know a piece of artwork. So that’s basically what we do, we create pop artwork, comic book artwork, this type of illustration artwork and I work with artists all around the world from North Korea, Japan, Venezuela, Spain all over Europe, Britain to create Beijing centric artwork. 

Matthieu David: Sorry to use this word which is not artistic at all, but what’s the business model behind your design apparel company in China? Do you partner with your artists sharing the profit, do you hire them and then it’s your own creation, your own your brand? If an artist is listening to us, what kind of deal we’d have with you?

Dominic Johnson: Yeah. I am pretty much a bricks and mortar retail business, that’s where we make most of our money is in stores, and so my fixed cost is very high you know with the retail, your net profit is usually pretty low, because of all your fixed cost rents in Beijing is very high. So, I don’t do profit sharing with artists. I make that very clear with them at the beginning that this collaboration is that I came up with the concept, I guide you with sketches to help you create the artwork in the Chinese apparel market. When the artwork is done, I then own it, and I am very clear with artists before we start, with that model.

When I started out, I wasn’t – and I threw myself into a lot of collaborations with creative people and then at the end they kind of like everyone gets pissed off with each other because no one was clear at the beginning. So I learned my lesson early on, so now before I work with an artist I make it very clear that you get a payment to execute this artwork this concept for me and then I own it, because we also license our artwork to other territories, and if the artist isn’t happy with that then generally I just won’t collaborate, so I had to make that very clear at the beginning otherwise the business doesn’t make sense.

Matthieu David: Alright, I see, I understand better now. You mentioned that you see your business as an agency because you are doing as well what I would call interior design. You have painted a wall with your design opposite OWLS you have worked with Lu-Lu Lemon, which could be a competitor in some way I mean they are in the clothing industry and it’s a very established brand. You have worked with Hilton; you have worked with a lot of very iconic bars and places in Beijing. So could you tell us more about how you step by step switch and what I am even more interested is I feel that people went to you to ask you to design for them because you have a very strong identity, which is to be able to put Chinese elements in art design, that very few people do. But I am happy to listen to you if I am correct.

Dominic Johnson: Yeah, I think you know Matthieu it’s very important in life to understand one’s own sandpit, as we call it in business which is the area that you play in better than anybody else. To define your niche so that you can have – you can be competitive and have a market. Now, for me this is even not been in China for a long time it’s in a waiting game I am competing with these Chinese entrepreneurs, who are if not the best entrepreneurs in the world, and it’s a waiting game. I really need to understand my niche, my niche is – I create Beijing-centric pop- art and I am very good at that, because what I do is presenting foreigner’s view of Chinese aesthetics;is that I look at Beijing from a foreigner’s perspective with a  fresh set of eyes, and that’s very interesting and so my niche is really that kind of pop Beijing and I don’t leave that, and so it’s very much my aesthetic and I don’t really have anyone that competes with me on that.

So, as the artwork grew, and I became better and I had more money and I spent a lot of money working with the better and more skilled and famous artist. The design apparel company in China went from a daily t-shirt brand to an art brand, and that was very much my goal. I wanted people to take it seriously I was fed up with them saying you are the guy with the T-Shirt shop, I wanted it to be more than that. So, as we became more well known, I just one day had an opportunity. A friend of mine was starting a cafe chain called Moka Bros, they were opening their first outlet and the founder said to me – I have got this huge wall and I don’t know what to do with it, and I just saw an opportunity to develop print design business in China and I said give me that wall and I am going put a big piece of artwork on it and I am going give you that for free, and then you are going to put my logo on that wall so people know it’s my artwork and then elements from that artwork are going go in your staff’s t-shirt so I thought I could make money on the T-Shirt, I get this amazing advertising in this public space and it really worked, and it worked mostly because Moka Bros is an awesome brand and they created  a lot of buzzes, they have an amazing product and a team service, so the people felt it was a really good combination of this artwork, this experience and so Moka Bros took off and now grew to seven or eight locations around China.

My artwork became more and more visible and from there. That’s how I got Lulu Lemon, you know that then led on to another collaboration that led on The Opposite House, The Hilton and all of these other places around China. Now we are doing an apartment block in Luxemburg and it’s crazy but we have this niche and no one else really does it as well as we do. I know I am the best at print design business in China, and that’s what I stick to, I just do Beijing, and so it was Moka Bros that started it and then people took – as soon as it was onto a wall, people were like okay – this is a whole new medium, it’s not just a T-Shirt anymore. People were like t-shirt’s are T-Shirts – it was on a wall and then I started doing – covering all of their walls with huge installations and people were getting inspired by that and then my phone started to ring and I was getting WeChat’s and emails with people who wanted to collaborate. Private collectors, people who just wanted the prints, and so that changed everything and it became a win-win because then people started paying us to put our artwork up in their locations and it was branded.

We put Plastered 8 into the artwork subtly somehow, so I was being paid to advertise and then I was owning the artwork so you go to the Opposite House, there’s this huge roll of water ski ladies and the people were like wow! that’s incredible, and you see in the corner, ah! by plastered and then that artwork is owned by me. So, you can go to my store, and you can buy that artwork on merchandise and products. So, I am getting paid to advertise the only artwork that I can then put on products. So, it happens organically, but it turned out to be a really big win for us.

Matthieu David: I see, very interesting. Then comes the question of the trademark. You are in the country; we are in the country where a trademark is not very well respected and I think it was even worse before than now. So, your business is using Chinese elements in art design, it’s based on the trademark is based on the fact that people should not copy you. So how did you deal with that? I mean was it an issue maybe it wasn’t. 

Dominic Johnson: Well, one thing I will say Matthieu is when in Rome – which is when I started my brand, I started it all based on stolen IP which was you know I took the old sub tickets from subway commission, and they didn’t trademark them. They had this whole collection of beautiful tickets, and I am a collector of vintage so I collected tickets and I got these beautiful subway tickets and then I put them on T-Shirts and so I went down to trademark office and trademarked them. So, I actually stole them from the subway commission and all of these all thermoses and all-metal bowls that people got as wedding gifts with these beautiful patterns inside. I took out those patterns, I went down to trademark office and trademarked them. So really, I started my brand from stolen IP and then as my brand became popular – now if you take some of my more popular images, you go to Taobao, the Chinese eBay and you can do an image search. You’ll see my products they’re on all kinds of clothing and products. You’ll see them on coffee mugs, you’ll see them on kids’ clothing, you’ll see them on women’s fashion. The more popular I become the more I get stolen and it’s very hard to deal with.  Generally, I don’t put a lot of time and effort into following up on that stuff, I have a lawyer who works on commission so I don’t pay him. He’s a real dragon. He goes after people. If he sees a company that’s got a lot of money and they’re using my artwork, he’ll go after them and sue them, he’ll get some money and share some of the profit with me. I leave that to him.

Me, I concentrate on innovation which is – our brand doesn’t do seasons, we just come up with new artwork in the Chinese apparel market all the time, and we are constantly changing and innovating and trying to stay up with a very fast-changing market. Our core customer is 27 years old, three years ago they were 33 years old. Now we are redefining it, our customers are getting younger, our artwork needs to change with them, and so I just concentrate on innovation. IP – my shit gets stolen all the time, I don’t think about it too much I leave that to the lawyer, I get on with the innovation.

Matthieu David- But does the lawyer gets result in China and is he able to get a result, to get information?

Dominic Johnson: Yeah, you know it’s a funny game, very rarely do I get results from that. But what I do find with the lawyer is that when a big company, like a big hot brand, opened up in Chongqing, somewhere down in china and they opened up their new store, this big investment and they’ve got my artwork all over the front of the store and someone sent it to me on WeChat, I forwarded it to the lawyer – he is rubbing his hands and he’s thinking “I am going after them” so, I leave that to him. I’ve not received any considerable amount of money from this, but you know what it’s a waiting game here. It’s a different country, it’s a different culture, things move very fast here. IP isn’t respected yet; it will be in the future – right now I can’t spend time thinking that it’s just it’s a waste of time for me. I have the people that can deal with that, I get on with what’s important. 

Matthieu David: So the first question, you are in a country where the trademark is not very well respected, and that’s the key of your design apparel company in China and the second question is that you are in a country where censorship is strong, and you are dealing with Chinese elements in art design, including icons of Beijing, sometimes leaders of China. Could you tell us a bit of your – some stories of censorship? You are in the place as well Nan Luo Gu Xiang where it’s a strange place where you can see officials with a civilian, not far from where you are and at the opposite – hipsters and very trendy café at the same time. It’s not a neutral location, it’s a very, very visible location.

Dominic Johnson: Yeah, yeah that’s an interesting question, Matthieu. I think that every culture has its unique eccentricities and I remember being in Myanmar a few years ago to film a TV show, I am also a TV presenter and when I was there a guy from museum got locked up because he created a flyer for a party and it was a Buddha with headphones on and he got  put in prison, and you think how many flyers you see in the world for like Buddha power and Buddha party and it was very simple Buddhist face with headphones on, and I think he is still imprisoned three quarters later, although I haven’t checked on news you know China has its own eccentricities too on that front and it’s a very – you have to play very carefully. I do play with icons and sometimes they might be political icons or people who are involved – I made a stain glass window of Deng Xiaoping, which is very much celebrated there. And yeah, the political climate also changes very quickly here so you just have to be very careful, but at the end of the day I am not trying to be political. I don’t know – I am just celebrating my eye on Beijing, but one has to tread carefully.

It’s not of my culture and I have to keep up to date with things as they change here. Maybe something that wasn’t sensitive five years ago is now, but it’s not my goal to upset it’s my goal to celebrate and so creativity is at its best when its unfettered, when it’s not you know sensitive of course, but here in China it’s a different game, so I think we have to respect the local culture and play around those rules and get creative in other ways and that’s part of the game and I very much enjoy it. 

Matthieu David: How do you know the parameters then of censorship, of what you can, what you cannot, what’s the lead – what cannot be seen as friendly. How do you know, how do you select?

Dominic Johnson: I think you need to have one ear to the ground or you need to be carefully watching what’s going on, and I live here and all my team is Chinese and my life is very much surrounded by Chinese people, so I hear their daily conversations and you might know what hot topics or sensitive topics and things to stay away from. For me, I’m just trying to celebrate Chinese elements in art design that I think are fun. I mean I just came out with a piece of artwork in the Chinese apparel market, which was about – it was like a comic book here, punching and destroying a guy who is doing a live broadcast. I try and take topical things. The live broadcast is very popular in Chinese, people in cafes are doing it. Live broadcast. Here I am having my coffee and these KOL’s – and I just think it’s totally ridiculous though I do a funny bit of artwork where a superhero is killing a live broadcaster, that’s just a bit of fun. But then maybe that will get posted on Chinese twitter and some will say this is disrespectful and then you got to take it down.

You have to be careful; I don’t want to upset people but at the same time I like to be naughty and silly and ridiculous and that’s really the characteristics of my design apparel company in China. It’s an extension of my personality. So, the goal is never to upset, but certainly my goal is to have fun, and sometimes you might tread on the wrong toes, so you have to be careful.

Matthieu David: You mentioned you are also working in Luxemburg on some design and I witnessed when I went to Europe, that China is more and more trending, there is more and more an attraction to China pop culture, a bit like we saw in the past with South Korea. Not to the same degree, but do you find some elements like Bubble Tea, like the culture of China. Do you feel that and do you think that you could play in this area as well actually as a foreigner within- between- The China and the west?

Dominic Johnson: I think you know there is huge potential for what we do because we are doing an east-west, which is much about foreigner’s view of Chinese aesthetics. A lot of what I do is taking western elements like comic book artwork and then adding in Chinese elements, and so it does the bridge. I was very fortunate to attend the Crack illustration festival in Rome last year with my team, and we set up a pop-up shop. That illustration festival is predominantly European artists and so we were the first Chinese brand to go in there and we set up a pop-up shop. It was a four-day event and within two days we sold everything. It was all gone and the reason was it was so exciting for the Italians to see the Chinese pop artwork and so surprising and they had never seen anything like that and when you stand there and tell them the story of the artwork and even the collaborations I did with North Koreans artists – they were just completely blown away and that was very exciting for me to realize the potential of the brand and aesthetical Chinese elements in art design – so yeah of course I think you know a lot of people have real intrigue towards China.

It’s the country that is shaping the world right now and is literally shaping the world and so people are slowly coming to understand China and have intrigued and taking interest in it. And so, I think our artwork is very much part of that. The building they are working on in Luxembourg is a six-storey apartment block for Yapese and the developer went to The Opposite House in Beijing, saw our artwork on the wall and said wow ! this is stunning and he contacted me and said listen I need six floors of artwork and I think your aesthetic would be brilliant, and that’s how it happened. So, these kinds of projects are really exciting and it makes me very proud as well to be able to take our artwork and put them in Europe. So yes, I think by the sheer amount of emails and demand I have from people who want to work with us, you can see that obviously, the whole Chinese elements in art design is becoming very popular. But having said that, I am not out to build the biggest design apparel company in China, Matthieu, I keep my business small for a reason. I see too many businesses die because they are growing. And I have always kept my business smaller, growing it organically and I own it 100%.

And so, I am out to build the best not the biggest and with the agency, I only take on probably 8-10 projects a year and so I can choose which ones I think will work well with the brand. Generally, I would say the 3Fs which are the Fun, Financial and Fame. And it’s going to be two of those F’s you know if it’s just financial. You know if it’s fun and fame that’s great, sometimes people give you an incredible mural or wall to create. The money is not that good, but they give you absolute creative freedom but you want to do it for the Fun and the fame because a lot of people are going to see that wall but sometimes it’s in the corporate office no one is going to see it but they give you a lot of money. So, then it’s the financial and maybe the fun but it’s got to be two of the three Fs and then sometimes the fourth F I always say is just Fuck off! 

Matthieu David:  So, we talked about censorship and I feel that actually, you can play the role of improving the image of China through giving another image of China. Just a slight comment on what we said before. You mentioned emails, you receive emails but when we looked into your business online on Taobao and so on we don’t feel that, maybe we are wrong we didn’t do our analysis correctly, but we didn’t feel that online was a key driver for you. We didn’t feel that sales online were a key point for you, are we correct?

Dominic Johnson: Yes, my online business is very small compared to my retail. I love creating an experience, so our stores in Beijing it’s all about the experience. You know all of our stores are run by retired old Beijing ladies and we do incredible Murals and artwork and everyone gets a free gift. And the stores are all street-level stores and it’s all about the experience. Online is a tough market, especially in China. Taobao is so much noise. There are millions of T-shirts, not to mention many of the T-shirt’s are copying mine and they are extremely cheap and so it’s very hard for me to compete on Taobao which is a big Chinese e-commerce site. I have plastered.com and it’s a niche design apparel company in China so I had never spent money on trying to get the world to see my brand yet. so, I concentrate on my retail stores and the agency side of my business, that’s what brings me the most profit. I do understand online has huge potential but the way I have – a basic day by day strategy is how I work and it’s working for me right now. I haven’t put a lot of money online. I have had people come and I want to buy huge wholesale. The margins are very small, you can’t control the experience. So, I really control the brand and keep it small, keep it profitable, have a great lifestyle that comes with it and I get to create and enjoy things.

Matthieu David: Did your experience in Italy with a pop store change your mind on getting more visibility online?

Dominic Johnson: No, it didn’t. Yes, I just concentrate right now on what we are doing well. I think you know if I am going to put money into a better online store, it would probably be towards the end of next year. This year we have another possible two store openings in China and that’s – I have a small team a small core team of six people and we are concentrating very much on getting that done and executing that well. I know pretty much if I get a store and a good location with good foot traffic, I know I can convert, I know I can guarantee I can convert on that. With online, there is no guarantee and it’s a long tale for me online. So, I don’t have the patience or the time to invest in that right now.

Matthieu David: You mentioned you are opening two new stores and actually I was certainly mistaken in it. But I read that somewhere you opened in Shanghai and you closed in Shanghai and decided to focus on in Beijing, but I feel I am wrong on it; you are still opening locations in China, right?

Dominic Johnson: Yes, we are only in Beijing. Yes, right now we are purely in Beijing, I am looking at possibly setting up a store in a second-tier city, in another spot in China later this year. But Beijing’s 23 million people, we are a Beijing-centric brand, we are concentrating on Beijing. We do have people who carry our products in other places we have sold in. In Germany, in France, in Singapore and other territories, but that is a very small part of our business, that wholesale side. For me, if the cash flow is good and I have got a good location, and I can have a solid legal standing on that location.

Otherwise, I can have a proper business license, so I have to do a lot of due diligence. If the location is good, then I will go for it. but only if I put the money to do that. As I said, I grow organically. I don’t have investors. And I like to grow slowly and keep the business lean. And that can be very difficult in China because there is so much opportunity. People come to you all the time. I had a guy come to the store yesterday. I was just going to the store to inspect a new installation that I was putting in, the guy standing there, he’s just like I do IP for Chelsea and he was speaking big, he was like I want to meet with you now because I want to do like a boutique hotel that’s all related to your print design business in China and of course you’re like – oh that’s very exciting, and then you go meet with him and he talks very big and then you know what, I don’t want to commit to that right now. so, you need to know when to say no, especially in China you need to know when to say no and it can be very, very tough. And so, it’s a constant effort for me. If I see an opportunity, I want to pounce on it but then I think that might stretch our resources we won’t be able to deliver our core product. Well, so it’s a struggle. 

Matthieu David: How big is your team now?

Dominic Johnson: So, I have around 20 employees.

Matthieu David: Okay. Basically, within your shop, right?

Dominic Johnson: So, the shop staff makes up around 14, and the other 6 are my core team of designers, accountant, inventory production, that kind of stuff

Matthieu David: I see, What’s the challenge of managing your shop? What can you share in terms of challenges, the rent is the challenge I think it’s increasing a lot for the last 13 or 14 years, what are the challenges you face?

Dominic Johnson: Yes, there are so many challenges in running any business and retail business is tough. Cash is king in businesses and we produce a lot of ideas. A lot. I am a very impulsive guy, I have an idea I create it, that’s very much a life goal for me. And sometimes the ideas get out of control and suddenly I have no cash because everything is caught up in the store. You know there is 2 million RMB in store and then I have got half a million RMB in the cash flow. You know that’s the real challenge, controlling and curtailing the ideas. Rent is obviously a huge challenge which is a big factor in paying into the net profit. Frontline staff is one thing we have done very well is that you know we only hire ladies above the age of 50 to work in our stores and so our retention is extremely good. Generally, the retention in retail is about 6 months in China, my retention is – I have one old lady, she has worked in my store for 13 years.

I have got another one, she has worked for 11, I have got Li I who has been with my brand for 8 years. They’re local matriarchs, they’re very much part of our experience, they live in the areas where the stores are, so that’s been a big win for us, So, the challenges are huge and I was saying about due diligence. I don’t open the shop anymore so; I work in the street-level stores. A lot of streets level stores have been bricked up and closed down in Beijing because Beijing is trying to move people out of their center of the city because it’s overcrowded they close down businesses. You can lose your design apparel company in China overnight. I mean my flagship store provides a huge amount of our revenue and three years ago they decided to close down the whole street to renovate it. And they closed down a lot of the smaller business that didn’t have business licenses but I was basically closed for three months and I lost a huge amount of money. So, policy, those things can change very quickly here, so the challenges are huge but the opportunities are also huge here in China, just because of the sheer amount of people and just how excited they are by creativity.

Matthieu David: From the management perspective, when you have an idea. How many items do you produce of the T-shirt, I thought you are very creative but on the other hand, you need to produce those T-shirts and predict a bit in how many items you are going to sell. how do you manage that? 

Dominic Johnson: Okay, so fortunately with T-shirts are quite easily controlled you can produce blank T-shirts in bulk. We have data on our stores so we have a very POS system, so when we have a new design, I can print 30 if I want or I can print 1000. They are all screen printed by hand just outside Beijing and so we do an initial test print of let’s say 60 and then we monitor that very closely.

All the ladies who work in our store, the old ladies they use WeChat and they take pictures of our customers and so there is a close relationship you put on a T-shirt and she says can I take a picture of you – sure! She takes a picture and she shares it in our WeChat group with all my core team and then we can see our customers are changing and underneath that picture she has to leave a story because our brand is all about story. You know we are selling a story, so this customer came from Xiaoping and he came in such a car, he is about to get married this year. It’s his third time in Beijing and he works at Volkswagen or whatever that story is incredibly powerful for us because we can understand our customer and so with these small prints we see who is buying it, we see who is not buying it, we realise what the market is for this, what the market is for that and then we have internal meetings and decide you know what kind of route we should go down artistically, which type of Chinese elements in art designs we should maybe make more or less of and at the same time we need to take big risks.

We need to create big outlook that is surprising for a customer because of we are only designing for your customer and I’ve worked with brands like that, they say Dominic can you create this for my shop, you’ve signed a contract, they’re like- can you just do us one first, we’ll send it to our customers and see if they like it – that’s a big mistake. Plastered was built on surprises and people like it when we come out with stuff they never expected, but if you are only designing for your customers, you become like every other brand. you become very boring very quickly. It’s like Matthieu your girlfriend or your wife telling you something to do and you always listen to her you know you always, always say- Yes to everything she can get bored very quickly and with us with the customer, we want to deliver surprises and at least 30-40% of our artwork in the Chinese apparel market has to be new, exciting and surprises. They can fall flat on their face or they can explode but you know our design apparel company in China needs to be innovative; we need to be creative. And that’s how we stay ahead of the other people who are trying to come in the market and copy us.

Matthieu David: So far what has been your best seller?

Dominic Johnson: Crickey, well we have a full print design at the moment which – Chinese are very bold when it comes to fashion, they’ll wear anything. We just came out with a pair of pajamas that are bright pink and have pixel designs all over them, but the people in China wear their pajamas out on the street. Very bold, our current best-sellers are a full print T-shirt. It’s just absolutely madness it’s red, it’s yellow, it’s blue it’s a whole collage of illustration of little ideas, old television sets, old bottles of washing-up liquids, cigarettes, alcohol. It’s like a whole collage of dreams put into a full print T-shirt.

When I saw that T-shirt first designed, I was like I am not sure that’s going to sell. We put it in the store and it all went crazy and we may be able to take that full print design and put it onto pencil cases, onto hoodies, onto tote bags it’s become our best-selling designs of all time. And its complete madness when you look at it. When the Chinese customers come in, they get drawn straight to it. It’s like a shining star in the store, foreign customers not so appealing, but foreign customers are only making the brand 10% or 5% of our business, but the young Chinese crowd comes in and they see that and are like WOW!

Matthieu David: Foreign customers. How many percentages did you say?

Dominic Johnson: About 10%

Matthieu David: 10%. Okay, so it’s mainly Chinese actually clients. Did you, I feel that to appreciate what you do we need to have a distance towards Chinese culture, Chinese history even literature, politics or whatever, especially a distant foreigner’s view of Chinese aesthetics. So, do you think Chinese have this distance or do you think it’s more about designing itself? Are they happy to find back some pictures of the past to play with it or it’s more about the design?

Dominic Johnson: I think No 1]- It’s about whether that design aesthetically can grab them. In terms of the colors and the layout. Aesthetics is number one. Number 2 is when they come in and discover the story and they look in and say Oh look there is that, from when I was young, I remember that from that book. And then your design needs to have meaning. The story is so powerful. You know we spend so much time and money training our frontline staff to be able to tell the story of the brand and tell the story of each design. So absolutely design needs to have meaning and we are selling a story of Plastered, and so aesthetically it grabs them, that’s very important. Then there needs to be the story in that and he needs to be able to have that experience in the store that your frontline staff can tell that story. And then you will find that your conversion rates are extremely high.

But also, we do mad window displays. Right now, we have a giant sculpture in our flagship store, which is an old Chinese toy. Everyone had it in the 1970s, very iconic toy and its face changes every three or four seconds it turns and it’s holding a knife behind its back. And so, people walk past and they see that and they get totally grabbed by it. When you are talking about the street, it’s 50000 people a day. The minute we put that sculpture in the window, our traffic increased by 15% coming into the store. So, to give you an idea February last year we probably had 15000 people that came into that store, February the next year with that sculpture we had almost 20,000 people come in. And so, then you convert on a percentage of that traffic. As you can work out mathematically, the value of that sculpture right away. I am not a big one on numbers, to be honest. I am not really good at numbers.

Matthieu David: I think you know them. You know your numbers.

Dominic Johnson: But I didn’t give you my numbers.

Matthieu David: You said 30,000 people on the street right and you have got 15000 people in your shop. That’s what you just said…                           

Dominic Johnson: 30,000 people a day on that street and I get 15000 people a month in the store. 

Matthieu David:  Oh. Sorry. Got it

Dominic Johnson: On the good month I get 32-33 thousand people in the store.

Matthieu David – Okay. I see – what about Beijing now and Beijing like 15 years ago, 20 years ago what do you feel about the city? How do you analyze the changes in the city? There is a lot of nostalgia I feel with expatriates who have been there for 20 years. What’s your opinion, what’s your feeling about the city and its evolution?

Dominic Johnson: That’s such a question that comes up a lot. People say, what’s the biggest thing that has changed and I never know how to answer that question. Beijing has 8 million people, it’s now 23 million people. When I arrived, it was a flat city. There was no high rises, there was not even a third ring road, now there are 7 ring roads I think about to be. Everything’s changing, people’s body shape is completely changed in the time that I have been here, their diets have changed. When I came here in 1993 if I’d met someone who even left China was surprising. If you met someone – oh I’ve been to America, you’re like -Wow you went to America! I think to myself as to why you came back, why didn’t you stay there? Now you look at your WeChat moments, the social element of it, on any public holiday, my Chinese friends who are in Turkey, in Alaska, in America, in Britain they are all over the world, so everything has changed. But I think the mistake that a lot of people think is Chinese is westernizing is It’s not westernizing it’s globalizing. It’s very much taking on its own character its own eccentric idea of how the world should be, or how they want to celebrate it. And you can see even just in design apparel companies in China, they put all kinds of things together you would never expect.

So, it’s a country with a very long history. It’s just opening up I mean it’s only been open for 40 years that’s it. The economy has been open for 40 years, that’s nothing I mean. there is so far to go and the economy is not really slowing down. People are like Oh China’s economy is – it’s not really. I mean it used to be 10% of this and now it’s 6% of this. You know it’s adding to the world economy the size of the South Korean economy every year now it’s crazy growth when you go out to the second- and third-tier cities. So, opportunities -and it’s still exciting, at the end of the day, I am a very hyperactive person. I love things to be changing all the time, I like to get out and do things. China is a playground for an entrepreneur like me. I am a creative guy, I like to bring ideas to life, I can find any factory In China that can bring my foreigner’s view of Chinese aesthetics to life. I have got a whole wealth of customers in my stores who get excited about my ideas. If there are challenges here – for sure but generally this is an incredible country to be an entrepreneur. If you apply yourself and understand that people here are good people. They are brilliant entrepreneurs; they want to win the game too. But you can build relationships and you cannot lose your moral compass and you can be a good entrepreneur in this country if you ever apply yourself. I had an incredible journey. I have to be lucky for that, definitely, timing has been a huge part of it but another part of it has been understood by people and building relationships and friendships and I have incredible support over the years.

Matthieu David: One question I forgot to ask actually was about the creation of your products? How do you find inspiration? Do you have a pattern of working on the inspiration? do you have time slots where you read, you go through shops, you go through other parts of the city, or is it coming just like it’s coming within the day or in the night or whatever? 

Dominic Johnson:  Yes. You know what, I hate it when people say to me let’s have a creative meeting. It’s almost like a conundrum. They don’t go together. The more you try to make creativity efficient, the worst it works. You can’t make it efficient so you need to give it time. There is a great slogan which I love is- Your brand equals the sum of your life experiences. Which is life is an experience, so for me, I travel a lot and it’s a big part of my inspiration. The brand that I am is made of this young guy that left England traveled around Africa, South America, India, China and saw these incredible things and fell in love and ate incredible food and ended up in dangerous situations and ran out of money. You know it was a little bit silly. I am just celebrating who I am. I understand that life is an experience. And if I am going to have ideas, I need to have a rich filled life. If I need to be happy, I need to be enjoying artwork in the Chinese apparel market. And so, I try just to celebrate who I am, enjoy life and then the ideas seem to come very quickly.

But the importance in terms of execution ideas is Number 1- write them down, number 2- be brave, because of course sometimes you have an idea at the moment and after a couple of beers you feel high and excited, and then you start executing it and you lose all confidence in it. And you start second-guessing yourself and when you second guess it becomes totally water down and shits. So, for me creative is about keeping the purest side of it, getting excited about something, writing down the ideas, delivering it to my team and then trying to execute the correct, the purest form of it and then that’s creativity. And I am not trying to second guess myself too much. The more I think about the costumer the worst the design comes. Sometimes we realize we have to deliver commercial things like print design business in China and I sit down with my creative director, but the customer and then eventually something comes out and its absolute shit and we deliver it and the customer doesn’t even like it.

You know what I mean, so it’s important to be brave and at the same time, of course, there need to be systems in place. And you need to have discipline and continually create because it is very easy to get caught up and think I’ve got writers’ block or I didn’t have any ideas. you just have to work through those moments. And sometimes you produce shit and that happens.

Matthieu David: I feel a bit of – I feel process in what you described, you have an idea, you’re writing it down, you talk to your team. Do you work only on why the other time? Do you work on several ideas at a time? Do you stick to one idea until you know it’s finished and or you give up or you continue? Do you have a framework like this or it’s…?

Dominic Johnson: No, lots of ideas are floating around. So, you know I have an idea – and so quite often what happens is you have an idea to put this on the back burner. you are not quite sure if you want to execute it or if you can execute it but you keep it there. Then another idea comes together and then you stick the two together and realize suddenly it taking two things unrelated and sticking it together anyway. But in the design process a lot of things are floating around a lot and suddenly. This one popped out of them put with this one together and then it created and then I get this artist and it creates an absolute diamond. And in the chaos of my life Matthieu is where I find the diamonds for my design apparel company in China. And it’s important for my life to be chaotic. I believe that. I understand the structure of designing artwork in the Chinese apparel market can set you free. It can, of course, the more structured is my life the more time I have, but the same time with the two structures I have no ideas.

So, I need on one side to be chaotic. I also need to be systemized and balanced. And you got to find that balance and you know Nan Luo Gu Xiang was created on creativity in creative stores. But I am like the only one that’s left all the creative stores have closed down because they couldn’t keep up the rents and that’s because those entrepreneurs couldn’t keep up with the structure and finance side of things. I have been fortunate to surround myself with entrepreneurs in Beijing and members of the entrepreneur’s organization and so I’ve learned from them. I surround myself with smart people who understand systems that understand processes.

Matthieu David: You are a part of EOs?

Dominic Johnson: Yes, I am in a part of the entrepreneur’s organization in Beijing. Have been for 10 years.

Matthieu David: I see. I think I will have interviewed all of them by the end of the year

Dominic Johnson: Yes

Matthieu David: It’s very interesting.

Dominic Johnson: Yes

Matthieu David: I’d like to talk during the coming 5 – 7 minutes because I know you have to leave in coming 7-8 minutes. About the, your other roles, your other experience you have. And You said that China is full of opportunities. And we saw that you had been a TV presenter… you have written a book, and you are speaking to MBAs and EMBAs often because you have been in 60 Chinese universities.

Could you tell us about this last experience I am talking about? What do you tell them? What do you talk about to those MBAs, Emba where they would come up with consumers’ eccentric thinking viz business model which is exactly the opposite of what you said.

Dominic Johnson: Yes, you know what, the story is powerful Matthieu. The story is so powerful and so when I talk to universities, I have been doing this now for 10 years talking to universities ever since I won the British Entrepreneur of the year award in China. I was asked to talk I was terrified about doing it. But then I exercised myself and I got better and every time I did a talk, I realized what made people laugh or kept people’s attention. Every time I finished a talk then I would tweak it and make it better. So, my talk is an ongoing process and I quite often base my success on my talks. I might add in new contents in my talk and then I’ll understand, am I actually getting shit done or am I doing interesting things?

So, my talk is constantly changing. But It’s a story – it starts with me leaving school and then I had a whole list of reasons why I was unsuccessful at school. I was impulsive, I was immature, I was a daydreamer, I was always getting up to dangerous things. These were the things that defined me at school and got me in trouble and why I was unsuccessful in school? Now I take those elements and I tell stories, immature stories. I was immature when I did this, but it led to success. I was impulsive, I didn’t have a business plan for design apparel company in China at that time, so I tell stories based on the reasons why I was unsuccessful at school and then it all comes to the beginning and then a middle and then a very dramatic end, and its all connected.

So, I built this store over the last ten years as I craft myself and craft my own story. And it’s very appealing to the people and it’s very tangible. I tell them how I got into television, how I became a television presenter and how I wore a T-shirt on a Chinese tv show saying I’ll buy your second-hand drugs with my telephone number on it. It is really immature silly stunts that I pulled off and product ideas. They get people excited about creativity. I just share that journey with people and it always goes down well. There are no numbers in it, there is nothing particularly exciting I am not going to tell people about how I’ve made millions of dollars. It’s purely about ideas, creativity, my journey taking what people see as your perceived weaknesses turning them into your strengths and celebrating yourself. 

Matthieu David: What is the most often asked question asked to you?

Dominic Johnson: The university students? In China, a lot of them ask me how I can be creative, which are a very awkward question and I have never thought how to answer it without sounding too cocky or placing yourself on a too-high pedestal. The one-bit advice I always give is back to my saying of your brand equals to somebody’s life experiences. I said for me creativity comes from life and it comes from experiences I said I am sure you can afford a bicycle and so why not, you know we’re in chunk due you right now, I said why not get a new bicycle and ride to a city that’s 3 days away. Don’t make a plan, just get on the bike and go. See who you meet along the way, see the challenges that happen, see the inspiration that comes from there and I can almost guarantee that journey will inspire you. And for me that’s where creativity comes from. And so yes, I get a lot of that.

Matthieu David:  Doing the last three minutes. Could you tell us more about the book you wrote “A foreign entrepreneur’s China dream” You wanted to call before – but the editor didn’t agree?

Dominic Johnson: Yes, publishing in China obviously – you know the publishing account is government-owned. And so, that was a ghostwriter. So, at that time, that book came out I was pretty famous. I was a judge of the Chinese equivalent of the apprentice for five years I had that role. So, I was on television twice a week of an audience of 10 plus million, and a bunch of guys came to me and asked me if I would do that book because I was famous. And so, it was very much the watered-down version of my life but because they had to cut this out and cut that out and that’s a little bit naughty or that’s this. I wanted to call it – which is Beijing dialect saying – piss off, in a kind of polite way.

But then they said no no let’s call it you know “A foreign entrepreneur’s China’s dream”. So that was the book, it was bizarre even having a book because I don’t read and it was nice that people enjoyed it, I get messages every now and then from people who get enjoyed by that book or get inspired by that book. Yes, it was a funny process understanding how publishing works in China.

Matthieu David: Yes. Where can we buy? Where can we buy the book? Only in China or…

Dominic Johnson: No, I don’t think you can. It’s only in Chinese and I think it’s already – I mean it was published four years ago. I mean it’s sold out and I am not sure if they republished it now. So yes, the book is gone.

Matthieu David: Okay. Last question. Do you wear your clothes? Do you wear your brand?

Dominic Johnson: Yes.

Matthieu David:  Right now?

Dominic Johnson: Not always. No, not right now. No, I think I just wear whatever is on the top of my T-shirt pile. Sometimes I wear my own brand sometimes I don’t. It depends on the mood.

Matthieu David: Okay good. Thank you very much, Dominic, for your time. It was very inspiring, very refreshing, very positive as well. It’s good to listen to positive speech in this current world where we talk about negative views about trade war and so on. So, thank you very much for being with us, hope you enjoyed and hope everyone enjoyed the talk to. Thanks, Dominic.

Dominic Johnson: It was great talking with you. 

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article Podcast transcript #59: Unique Beijing-centric design apparel company in China is the first one to appear on Daxue Consulting - Market Research China.

• 3:15 About Plastered 8
• 5:40 Plastered 8 creation process for designs
• 7:48 Business model
• 10:10 Stand point of Plastered 8
• 14:25 Dealing with trademark in China
• 18:14 Censorship stories
• 20:18 Knowing the parameters of censorship
• 22:28 Utilizing the attraction to Chinese pop-culture
• 26:24 Online sales
• 31:53 Challenges of running a business
• 34:23 Managing numbers of items produced
• 36:59 Best selling design
• 38:55 Distance towards Chinese culture vs. design
• 41:48 Evolution of Beijing
• 45:02 How Dominic finds inspiration for products
• 47:46 Dominic’s method of working
• 50:17 Speaking to MBA and EMBA
• 53:45 Dominic’s book A Foreign Entrepreneur’s China Dream.

How to create a unique Beijing T-shirt brand and define your niche in China

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China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

This article China Paradigm 59: Becoming an iconic design brand in China is the first one to appear on Daxue Consulting - Market Research China.

On the 1^st April 2019, a CONVERSE store in Jining, Shandong province, released an announcement and has triggered lots of criticisms among Chinese consumers. In the announcement, the retailer published the put-on-sale date as well as the requirements for purchasing the CONVERSE Chuck 70 High Top: consumers need to wait in line and who get to buy the shoes will be decided by a lottery-drawing. In addition, shoppers were required to bring a personal ID and wear a  complete CONVERSE outfit including shoes and clothes. “Don’t wear anything from other sports brands. Please respect the brand, thank you!” said the announcement.

It is not unusual for brands to use the lottery-drawing method to decide who can purchase a certain product; It is also common for stores to ask consumers bringing their IDs and wearing outfits from its own brand. The reasoning is to prevent the speculating and ensure that the products get to actual enthusiasts, instead of scalpers. So why is CONVERSE in China receiving such a discontent from consumers? The most mentioned reason is that the CONVERSE CHUCK 70 High Top is neither a limited nor collaboration edition; It is not even a unique color or design but solely a standard pair of black sneakers. Many are accusing CONVERSE of being “cocky” and treating Chinese consumers like fools.

WARNING OF RELEASE! ! !

5^th April CONVERSE Chuck 70 High Top Black Release Announcement!!!

IMPORTANT! ! !

1. Make sure the registration information is in agreement with your ID.
2. Comply with the release time, no entering the store early.
3. Please wear a complete CONVERSE outfit (both shoes AND clothes), do NOT wear anything from other sports brands (Please respect the brand, thank you~).
4. Comply with all rules for the release, if there is any inappropriate behavior during the release, the event will be canceled.
5. For further information, please consult the store staff. All rights reserved.

Unfortunately, this store announcement is not an exceptional case. According to our observations, all colors of this collection are currently sold out both on CONVERSE official Chinese online store and on Tmall. On the contrary, the same pair of sneakers are available on US and European CONVERSE official online stores. As a result, Chinese consumers are criticizing the brand of encouraging making ordinary products inaccessible for regular consumers. Some netizens even believe that it is a sales strategy of CONVERSE in China to make its product more exclusive and desirable.

Shortly after, CONVERSE released a public letter on Weibo, which denied taking part in any kind of sensationalizing and the company has not encouraged any behavior as such. The brand also explained that the shortage of supply was not planned by CONVERSE; the produced and supplied amount is regulated by the related department based on the sales data from the year before. In the public letter, CONVERSE also claimed that they had already communicated with the authorized retailer and the retailer concerned then canceled all kinds of queuing or drawing-lots behaviors for not special editions. CONVERSE in China had also reported the shortage to headquarters so that the company could increase the producing amount to meet China’s market demand gradually.

The sneaker market news in China: consumers are turning to local Chinese sneaker brands like Huili and Feiyue

In the comment section of a WeChat post regarding the recent CONVERSE controversy, Chinese local sneaker brand Feiyue(飞跃, means flying forward in Chinese) has been mentioned frequently. They claimed that Feiyue shoes are much more comfortable and have a much better price.

What is Feiyue and why is it so popular?

Feiyue –  originated from Shanghai in the 1920s – is well known for its flexibility and comfort. Back then, it was once loved by the whole country, from the working class to politicians, from football players to Shaolin monks. Its light canvas and soft cushioning make Feiyue perfect as martial art shoes. At the 2008 Beijing Olympics, all martial arts performers in the opening ceremony wore Feiyue.

However, with the Chinese economy opening up after the 80s, overseas shoe brands in the Chinese market have been taking the dominant position. The Feiyue sneakers once disappeared in the sight of Chinese mass consumers. Interestingly, Chinese millennials are turning back to this local Chinese brand in recent years for its humble prices and good quality. At the same time, the domestic brand also maintains an authentic retro flair, which has caught many fashionable young people’s attention.

Ironically, it was a French who got Feiyue back in vogue, who fell in love with the rich history and Chinese martial characteristic behind the shoes. So, he decided to bring these shoes to French. In 2006, Patrice Bastian registered the trademark of the brand in Europe and established the Feiyue Shoes Holding. He kept the original Chinese vintage charm and modified the material and design to better suits the urban lifestyle. The brand’s popularity reached a peak when Hollywood star Orlando Bloom was spotted wearing a pair of classic Feiyue shoes in 2008. In 2010 alone, Mr. Bastian’s company sold a million Feiyue sneakers pairs overseas, before selling the brand in 2014 to BBC International LLC, a major footwear design and production company that works with marquee brands such as Polo Ralph Lauren, Teva, Cole Haan and Disney.

However, the Chinese Feiyue is not happy about that. They have been accusing Bastian of rubbering the brand. “No one in China knew about commodity intellectual property rights at the time, and it wasn’t until 2007-08 that we found out the French had registered the trademark,” Said Liu, manager of Shanghai Da Fu Rubber Co., which is considered to be the original Feiyue manufacturer. Till now, Chinese Feiyue and French Feiyue co-exist. While Chinese Feiyue still stays quite humble: a pair of sneakers costs around 10US$ to 20US$, the price of Feiyue overseas is similar to CONVERSE sneakers. 

Chinese sneaker brand Huili was also revived

After Feiyue, another Chinese shoe brand Huili (回力, known as “Warrior” in English) has been revived. The brand was established in Shanghai in the 1930s and was once the shoe of the working class. Just like Feiyue, Huili also has its fanbase overseas, although the price there for these sneakers are much higher than in China. After being discovered by foreign trendsetters, these local Chinese brands have, once again, gained huge popularity among Chinese young fashion chasers. Insiders suggest “that it’s because foreigners are excellent at branding and product packaging, and as a very small minority gets into a certain brand that has gradually become rare and hard-to-find, it becomes popular among young people.”

Challenges for international brands on the sneaker market in China

• With the Chinese consumers’ shopping concept getting more mature, they continuously put more value on how brands treat them. They now have access to global trends and are very aware of other markets. Chinese consumers often compare the prices of a certain product on different markets and are very sensitive about whether they are being treated “fairly” and “respectfully.”
• Nowadays, international brands on the Chinese market not only have to compete with other foreign brands but also emerging domestic brands, which often have a more attractive price and a better understanding of Chinese consumers.
• More and more Chinese millennials are adoring traditional Chinese brands with a long history. By purchasing from these brands, they acquire both the retro charm and the good consciousness of supporting Chinese domestic companies.

Author: Chencen Zhu

Daxue Consulting helps you get the best of the Chinese market

Do not hesitate to reach out to our project managers at dx@daxueconsulting.com to get all answers to your questions.

This article CONVERSE’s recent controversy in China and Chinese sneaker brand‘s comeback | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.

On 18th March 2019, China’s biggest e-commerce platform Taobao released a video report on Weibo:  China Fashion Trend Report 2019. The headline of this 40-second short video report claims: Chinese women will be manlier than men in 10 years. The hashtag on Weibo – #Chinese women more masculine than men in 10 years (#10年后女比男man#) – has received more than 583,000 mentions and was read over 600 million times in just one week. China Fashion Trend Report 2019 has caused heated discussion on China’s social media. Some are criticizing Chinese men being too feminine; others consider this message being sexist by calling people masculine or feminine solely based on their fashion choices.

Taobao observation #1: “Big-brother oversized blazer” is the hottest trendy item 2019 in China

Nevertheless, China Fashion Trend Report 2019revealed some interesting fashion phenomena in China, for instance, the so-called “big-brother oversized blazer” (大哥廓西, a name invented by Chinese consumers for this specific trendy piece of clothing) has become a super stylish item. The search frequency of this kind of clothing in the first quarter of 2019 soared by 317 percent compared to the same period of last year, and its sales rose 139 percent on Taobao.

In order to narrow down their searches on Taobao, Chinese consumers are used to typing in the item with the name of the celebrities who inspired the look. Chinese actress Yao Chen is on the top of the list when it comes to searching for female blazers. That may be because of her iron-lady character in the recent popular Chinese drama All is Well, in which she often wears suits/blazers. Famous actress Ni ni and Tang Yan are on the second and third place.

Taobao observation #2: Chinese women are getting bolder while men getting more delicate

From the Taobao’s search index between March 2018 and March 2019, we can see the number of female consumers searching for blazers / suits has surpassed the number of their male counterparts starting with January 27^th this year. While Chinese women becoming more and more interested in blazers / suits, the figures of male consumers are also showing some interesting clothing trends in China. Search frequency of such in the first quarter of 2019 has risen significantly compared to the same period in 2018: “Mens’ Lace” for 119%; “Mens’ see-through clothing” for 107%; “Men’s earring” for 69% and “Mens’ floral shirts” for 49%.

Taobao observation #3: Women are dressing comfier while men are dressing more trendy

According to the report, “Loose” has been the most searched keyword among female fashion shoppers in 2019 so far, with “Loose hoodies” and “Loose pants” (baggy pants) among the top-10 list. Meanwhile, Chinese male shoppers care more about “trendiness,” with “trendy male sweatshirts” and “trendy male coats” among the top-10 fashion searches. What’s also interesting is that “partner look” is on the 4^th place of male consumers’ search list, which might indicate that Chinese men like to shop couple dresses as a Valentine’s Day gift.

Clothing trends in China: Traditional Chinese dress – Hanfu – is, once again, gaining popularity

Interestingly, “Hanfu” (ancient Chinese dress) is on both male and female top 10 searching list. Among female consumers, it was even on the third place. This trend might be due to the recent phenomenon of Chinese court drama (宫廷剧 gong ting ju) such as the viral TV drama Story of Yanxi Palace.

Impact of Taobao in the fashion industry: its significant role in Chinese millennial fashion

Taobao offers a stage for young, innovative local fashion designers and entrepreneurs

As a matter of fact, Taobao released this fashion trend forecast as a part of its campaign for the platform’s ifashion week (淘宝新势力周). Despite the intention to boost sales, this shopping festival also attempts to gain recognition from young, stylish shoppers, and at the same time, increase the impact of Taobao in the fashion industry. Although Taobao might not sound like an authoritative source for fashion trends, it plays an unneglectable role of Chinese millennials’ shopping experience for clothing and accessories. Taobao reached 617 million monthly active users as of 31st March 2018, 70 percent of the platform’s MAUs are in their 20s and 30s by 2016 according to the company.

In addition, Taobao also has been offering a stage as well as a more accessible entrance for young, innovative local fashion designers and entrepreneurs. For international fashion brands, Taobao is not only a great e-commerce platform, but it is also advantageous to obtain insight from it of what Chinese millennials are searching for.

Author: Chencen Zhu

Daxue Consulting helps you get the best of the Chinese market

Do not hesitate to reach out to our project managers at dx@daxueconsulting.com to get all answers to your questions.

This article China Fashion Trends 2019 | Daxue Consulting is the first one to appear on Daxue Consulting - Market Research China.