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data e-commerce product Retail

VF teams up with Tmall to bolster product offering in Chinese market

VF Corporation has partnered with Tmall’s Innovation Center (TMIC) to up its offering in the Chinese market through the use of consumer insights and analytics.

The collaboration is aiming to give the retail group behind brands including The North Face, Vans and Timberland, access to Alibaba-owned Tmall’s 654 million-strong customer database.

The goal is to identify customer trends faster, build customer data profiles, track products to judge how well they’re selling and design new lines tailored specifically to Chinese consumers.

Other brands within VF, including Kipling and Dickies, have already made use of the insights. Kipling launched a new backpack following consumer testing, which resulted in it becoming a top-seller among all items debuted by the brand this year.

Dickies meanwhile is making use of chatrooms within the Tmall app to conduct focus group discussions and have users share photos of how they style their items. The results are helping the brand design a new clothing line appealing to Chinese street style.

Any product that launches out of TMIC will be sold exclusively on Alibaba for a period of time.

Alibaba is using Tmall’s Innovation Center to lure western brands interested in the Chinese market. With no private-label products (like Amazon’s), brands don’t need to worry about Alibaba’s customer database being used to undercut their sales on the platform in the same way.

VF is the first fashion company to collaborate with TMIC, but other brands like L’Oréal, Unilever, and Mattel have also worked with the company on product development. Last fall, Alibaba partnered with 10 global market research powerhouses such as Nielsen, Euromonitor International, Ipsos, AdMaster and GFK, to broaden TMIC’s reach.

How are you thinking about product innovation? We’re all about finding you the perfect partners to do so. The Current Global is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

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e-commerce Editor's pick Retail

Alibaba expands Singles Day for 2018 with new retail strategy beyond China

Daniel Zhang, CEO of Alibaba
Daniel Zhang, CEO of Alibaba

Alibaba’s annual mega-sales day, known as Singles Day, is set to be bigger than ever this year as it introduces its “New Retail” strategy, which further connects online and offline shopping.

The event, which takes place on November 11 every year, is celebrating its 10th anniversary in 2018, with the ambition to top last year’s record-breaking $25.3bn revenue in 24-hours. The focus will be on expanding scale and reach, according to the e-commerce giant, which includes moving beyond its home in China.

“Over the last two years, we have pioneered the concept of New Retail to accelerate the digital transformation of the offline,” said Alibaba’s CEO, Daniel Zhang.“We are excited by the impressive results achieved to date and will continue to be the driving force innovating for merchants and customers in the coming decades.”

As for geographical reach, platforms in the Alibaba ecosystem (TMall World, AliExpress and Lazada) are focused on bringing the event to overseas shoppers. Lazara, for example, will host its own festival for customers in Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam.

Moreover, Alibaba’s TMall plaform is already offering 500,000 items for pre-order as of October 20, following a see-now-buy-now fashion show on the same day, which enabled the company to respond to any insights on demand.

This year also includes a new focus on independent retailers. The retailer is working with 200,000 mom-and-pop shops which have been upgraded with Alibaba’s technology tools, such as AR-enabled discounts in-store and online promotions. 

Other brands including L’Oréal and Starbucks have also announced plans in place. L’Oréal China will launch a series of pop-up stores allowing customers to interact with virtual mirrors using AR and AI as well as vending machines, according to Hagen Wuelferth, the beauty group’s chief digital officer.

The shopping day’s extraordinary growth over the past 10 years aligns with China’s appetite for digitally-enabled experiences, which have not reached the same level in the West.

How are you thinking about retail innovation? We’re all about finding you the perfect partners to do so. TheCurrent is a consultancy transforming how fashion, beauty and consumer retail brands intersect with technology. We deliver innovative integrations and experiences, powered by a network of top technologies and startups. Get in touch to learn more.

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product sustainability

Will sustainable fashion crack China’s luxury market in 2018?

sustainable fashion china - tortoise & lady grey
Photo courtesy: tortoise & lady grey

Sustainable fashion became something of a mantra in the luxury fashion world this year. With Gucci announcing its fur-free plan for 2018, fashion brands in Mainland China and Hong Kong are also setting up their own sustainable fashion initiatives, but do Chinese consumers care?


Reclothing Bank (?????)

Zhang Na (??), an advocate for sustainable fashion in China, is the founder of Reclothing Bank. She began her fashion career after moving to Shanghai in 2004 and founded her first fashion brand, Fake Natoo, in 2008. Two years later, she created another new brand called “Reclothing Bank,” embarking on a journey into the sustainable fashion world.

Similar to the Los Angeles-based fashion brand Reformation, Reclothing Bank is a lifestyle brand that considers sustainability across the supply chain. What makes it different, however, is that Reclothing outfits are made from second-hand clothes.

“Our sales figures were poor at first because Chinese people generally don’t want used clothes,” Zhang said in an interview with Business of Fashion (Chinese version). Therefore, she had to reconsider the marketing strategy, redesign the used clothes, and describe them instead as “sustainable fashion (????????),” she said.

During Shanghai Fashion Week in October, Reclothing Bank debuted its 2017 collection, General Rejoicing (??). Reclothing Bank’s mission goes beyond “just recycling second-hand clothes”, Zhang said. “I would like to take this opportunity to remind people to stand in awe to nature.”


BYT

Another trailblazer in the sustainable fashion industry is the Hong Kong-based BYT, which uses leftover fabrics from luxury brands to create beautiful, trendy outfits. BYT made its debut at the EcoChic Design Award competition in Hong Kong in September.

BYT is co-founded by Christina Dean and Michelle Bang, who are both advocates for waste reduction in the fashion world, having worked at the NGO Redress.

According to the Redress website: “BYT has ambitious plans for its sustainability pillars – including up-cycling fashion’s excess, working with those disenfranchised in the industry and with Asia’s top sustainable manufacturing facilities, so that collectively, BYT’s collections are using the most innovative and sustainable processes available with their trusted partners.”

While there is plenty of supply side enthusiasm for more sustainable fashion, there’s still some resistance to it becoming a big trend in China in 2018.


The second-hand stigma

The clothing industry is the second-largest polluter in the world after oil. On one hand, traditional textile production requires massive quantities of water, which are contaminated with wastes harmful to the soil when they are discharged. Given the imminent threat of climate change, it’s imperative that brands do better.

On the other hand, sustainable fashion costs more. A Reclothing Bank’s woman outfit price usually ranges between ¥1360 ($205) and ¥5960 ($900), while the average BYT outfit costs around 2,000 HKD ($255), neither of which is cheap.

Although brands such as Reclothing Bank and BYT are promoting sustainable fashion in China already, the full value of well-made, sustainable clothes is still a little abstract for most consumers. Why pay the same amount of money for a leftover, second-hand item when they could buy something brand-new for less?

There is a stigma against second-hand and upcycled items that is itself handed down from the previous generation, which endured decades of poverty.

Nonetheless, wearing sustainable fashion represents a new way of thinking — pursuing something simpler and more beneficial to everyone, not just the wearer, in the long run. As governments and global consumers demand more sustainable practices from industry, brands will need to convince Chinese consumers that it’s worth paying a little more for sustainable fashion. Luxury brands, with their greater attention to making quality, lasting clothes, are in a strong position to lead the charge.

By Huixin Deng

This article was originally published on Jing Daily, a Fashion & Mash content partner.

Categories
e-commerce mobile

Rebecca Minkoff partners with Alipay for NYFW

Alipay on display in the Rebecca Minkoff store
Alipay on display in the Rebecca Minkoff store

Rebecca Minkoff is paying attention to her Chinese fan base this New York Fashion Week, introducing in-store mobile payments via Alipay.

The initiative enables China shoppers to use their Alipay Mobile Wallet to make purchases at any Rebecca Minkoff store in the US, as well as at home when visiting the brand’s e-commerce site. Alipay is China’s leading online payment provider, with more than 520 million active users, and the primary means of online and mobile payment for Chinese consumers.

The partnership was announced ahead of Minkoff’s show, which took place in New York on Saturday, September 9.

“Chinese travelers represent an important and growing audience for Rebecca Minkoff,” said Uri Minkoff, CEO and co-founder of the brand. “By offering Alipay, we are ensuring that Chinese shoppers visiting any of our US stores or our website are met with an exceptional experience which includes the easiest and most familiar payment method for them. We are excited to be able to offer Alipay.”

Souheil Badran, president of Alipay North America, added: “By accepting Alipay, Rebecca Minkoff is able to target the right shopper through our Discover platform to ensure that the Chinese consumers can enjoy the best experience in-store or online without any language or payments barriers.”

The number of Chinese consumers visiting North America is predicted to grow to four million this year. Alipay first expanded its mobile payment service into the US in late 2016.

Categories
business e-commerce mobile social media

4 findings on the digital habits of Chinese consumers that luxury brands need to know

Domestic luxury e-commerce website 5lux.com - chinese consumers
Domestic luxury e-commerce website 5lux.com

Chinese consumers are ready to buy everything online. That and a few other key findings came to light in a recent report entitled “Digital Lifestyles in China” by the Consumer Technology Association (CTA). The report offers insights and data about the online behaviors of consumers culled from a survey of over 3,000 smartphone users from mainland China.

First released during the association’s annual CES Asia Conference, in Shanghai, China from June 7-9, the report can help luxury brands better understand content consumption as well as the personal networking and buying behaviours of their targeted consumers.

Here are four takeaways for luxury brands operating in China:

1. Social media in China remains more personal than professional

Chinese consumers use social media more to explore and maintain their personal relationships than to further professional development. The data suggests that over 60 percent of those surveyed contact and engage with their friends and families, while only 28 percent of them use it for professional purposes.

“It’s possible that creating reliable firewalls between their personal and professional social networking could help the majority of Chinese express their individuality while still maintaining a professional persona,” Steve Koenig, the senior director of market research at CTA, said in a statement.

2. Chinese consumers are ready to purchase everything online

It is a cliché to elaborate on the importance of online shopping in China, but it is still a surprise to learn that Chinese consumers think “there are very few products they cannot, or will not purchase online”. The data from the report shows that nearly half of the surveyed users have purchased everything they need and want online, meaning that shopping online has become a necessary part of the modern world for them.

In the past, China’s e-commerce sites such as Tmall recruited a number of luxury automakers including Mercedes-Benz, BMW and Audi to launch digital stores with them. Therefore, luxury brands in China should not be afraid of making the full use of their imagination to creatively think about how they can cater to Chinese consumers digitally.

3. Chinese consumers favour shopping on smartphones

Following up on the previous finding, CTA reveals that smartphones are the main digital device that Chinese consumers use when shopping online due to its convenience and accessibility. Therefore, it is not surprising to find that the surveyed consumers have made almost 90 percent of their past purchases on their smartphones. Compare that to just 33 percent of purchases made on a tablet. Also, half of respondents said that they used a store’s own app to place the order.

The finding confirms the importance for luxury brands to invest in digital channels to maximise its potential for sales. Launching on a major online shopping platform is an absolute must for luxury brands, but they also should improve the functionality of their own apps to make them more localised, user-friendly and accessible to Chinese people.

4. WeChat is where meaningful interaction happens

Even though there is a strong resurgence in the number of active users on Sina Weibo thanks to the recent introduction of video-related content, the platform still lacks the scale and capacity to generate meaningful interaction between luxury brands and their followers when compared to WeChat.

On WeChat, CTA found that almost 90 percent of users they asked check the app multiple times per day, which was twice that of Weibo users, which was 44 percent.

By Yiling Pan @SiennaPan

This article was originally published on Jing Daily, a Fashion & Mash content partner.

Categories
business e-commerce

Chinese luxury: Apps, social media, fashion focus and exchange rates are key

Burberry_Tmall

The Chinese luxury consumer is changing with a number of factors coming together to drive this, according to Bain & Company’s 2015 China Luxury Market Study.

Last year, Chinese consumers from the mainland continued to buy luxury products, but they bought them abroad as currency issues in places like Japan and Europe made travel very attractive.

They also went online big-time, showing a lot more comfort with, and trust in, overseas websites.

This resulted in a slowdown in China’s overall luxury market, which dipped 2% to CNY113bn (£12bn/€16bn/$24bn) last year, driven by a decline in watches, menswear and leathergoods.

Bain said that if luxury brands want to overcome the economic slump and reinvigorate consumer spending domestically, they need a more tailored, localised marketing strategy, with high fashion content and to adjust their pricing to reduce the massive price advantage that some markets have.

Happy travellers

Bain’s research, which included a survey of nearly 1,500 Chinese consumers, found a sizeable shift in shoppers’ geographic preferences for luxury shopping in 2015. Overall, overseas luxury purchases grew 10%, with consumers flocking to Japan, where their spending increased more than 200%. South Korea, Europe and Australia were also popular shopping destinations, due to favourable exchange rates and competitive pricing on luxury goods in these markets. At the same time, luxury spending of mainland Chinese in Hong Kong and Macau dropped by one-quarter.

Surging confidence

Chinese consumers are feeling much better about their place in the world and more confident as they travel around it. Bain’s report said that, as overseas travel among Chinese shoppers increased around 32% from 2014, consumer reliance on Daigou, or overseas personal shoppers who buy and send luxury goods to customers in China fell. Daigou was the growing channel choice in 2014, but fell to around a CNY43bn market last year.

Bain cites price adjustments by key brands that reduced Daigou margins, government efforts to tighten control over imports, a weakened Chinese currency, and an increased reliance on other purchase channels (ie cross-border websites and overseas websites), which accounted for CNY48bn of the CNY293bn (£31bn/€40bn/$45bn) luxury spend overseas. The report highlights the increasing popularity of cross-border and overseas websites as luxury shopping channels with nearly half of those surveyed saying they purchased luxury goods via these sites last year.

The digital challenge

The survey reveals that nearly 80% of respondents said they normally get information on luxury brands from the internet or apps, and a full 60% identified social media channels Weibo and WeChat as their online source for information on luxury goods. As a result, brands spend, on average, 35% of their marketing budget on digital, and it’s growing.

But that spending needs to be carefully focused and some luxury players are still lagging their peers online as three key reports, from KPMG, Contact Lab and L2, have shown in recent months.

Adapting to change

So, as sales drop within China, what are luxury retailers doing? Bain said it’s seeing a reduction of the store footprint of most brands, with a greater focus on fewer, larger and better located stores. Many brands realise that they need to regain their exclusive image, which has been somewhat blurred by over-expansion.

As in 2014, the research also shows the greater importance of fashion and exclusive designs to win domestically. Brands with a strong fashion heritage and stronger emphasis on original design did well in 2015.

And the future?

Looking ahead, Bain expects these and other 2015 trends to continue this year, prompting further challenges, opportunities and requirements for brands:

  • The macro environment is expected to remain similar while the rising middle class becomes more sophisticated and knowledgeable about luxury.
  • Overseas channels will stabilise (Daigou will decline).
  • Global pricing by leading brands and government efforts to localise consumption will spur domestic growth.
  • Global pricing will likely spread further to other brands.
  • Luxury brands should strengthen both digital platform-building (Weibo WeChat, apps) and digital content creation, with an emphasis on localisation to reflect local market preferences.
  • Luxury brands must place greater emphasis on making their brand “younger” and more fashionable to capture the next generation of on-trend customers. There will also be an increased focus on “exclusivity,” both in product design and store footprint.

This post first appeared on Trendwalk.net, a style-meets-business blog by journalist, trends specialist and business analyst, Sandra Halliday