Pricey parkas make inroads in chilly China
Younger, trendy consumers buy leading Canadian and other brands
Wearing a $900 parka with real coyote fur and Canadian Hutterite goose down, originally designed for expeditions to the South Pole, on her three-minute walk to work, sounds perfectly fine to Amber Zhang who makes less than $800 a month.
“It’s all worth the price considering Canada Goose coats are the warmest I can find in the market,” said Beijingbased Zhang.
Sales of winter jackets rose sharply as the unusually cold wind forced people to buy protective garments that could shield them from harsh winter. Compared with function and design, the price tag seems less important for Chinese middle-income consumers.
“Female consumers now focus more on how the clothes make them look when making decisions, compared with the past when they looked at sales prices,” said Neil Wang, president of the Chinese operations of consulting firm Frost & Sullivan Inc.
“Chinese consumers in general want jackets that are light in weight, good in quality and trendy in design,” Wang added.
In demand more than ever before, the latest high-end jacket brands coming to the market meet most consumers’ needs.
According to a report from consulting firm Bain & Co Inc, the market in China for highend brands in general is now fueled mostly by younger generations, especially millennials. The Bain report also noted that China represented 32 percent of the global luxury market in 2017 and emerged with the biggest market share.
Italian luxury outerwear brand Moncler SpA, whose prices range from $1,000 to $2,000, for instance, has continued its global sales growth, powered in part by China. In the full year to March 31, total revenue climbed 16 percent to $292.7 million compared with $261 million in 2016.
Asia accounted for around 40 percent of its global revenue, while the combined total for the Chinese and South Korean markets posted a 23 percent rise.
Another example of the fast-growing appetite for luxury down jackets in China is the Canadian extreme weather outerwear brand Canada Goose.
Compared with recent years, when consumers would balk at $500 to over $1,000 price tags, customers now fall over themselves to buy them.
According to a quarterly report released by Canada Goose, the company’s total revenue to end-Sept was $211 million, up 27.2 percent yearon-year. Its gross margins were 63.6 percent, up from 57.5 percent for the same period the previous year.
Its shares on the Toronto Stock Exchange and New York Stock Exchange, surged from its Initial Public Offering price of $12.78 on March 16 last year to a peak of $38.25 a share.
According to a sales representative who is unwilling to reveal her name, Chinese consumers have contributed greatly to its growth.
Although the brand shows little official presence in China as yet, its products are becoming noticeably more visible on the streets of major cities there as many consumers utilize cross-border e-commerce platforms, go to fashion buyer stores in China or employ personal overseas shopping agents or daigou.
Daigou agents offer overseas products that are usually missing in Chinese markets — with prices 30 to 40 percent lower than in Chinese stores — by avoiding customs duties.
Some of those agents are students who study abroad, and some are professionals with marketing and distribution lines in China.
“We are working on a China strategy,” CEO Dani Reiss told the Canadian business newspaper the Financial Post. “China is a huge potential market for us.”
Originally designed for extreme weather expeditions, Canada Goose got a higher public profile after being used by crews in such productions as Game of Thrones and The Danish Girl.
“Its success is also closely connected with its marketing and promotional strategies,” Neil Wang said.
The brand has benefited from celebrity endorsement in its promotion in China. Jack Ma, the founder of Alibaba Group and one of the country’s richest men, was spotted wearing a Canada Goose woman’s parka at a number of international forums and during a meeting with US President Donald Trump.
Social media tags with “Jack Ma” and “Canada Goose” leaped to the top of key search words the next day, and Canada Goose, or similar looking products, became one of the top choices for purchases using online e-commerce retailer Taobao, the Alibaba unit.
As high-end brands like Moncler and Canada Goose enjoy a growing customer base, down coat brands with good quality but affordable prices enjoy a major customer base.
According to China top e-commerce platform Tmall, sister company to Taobao and subsidiary of Alibaba, the top five brands for menswear and womens wear with the largest sales volumes during Singles Day were priced between $150 and $200 for their down jackets.
During the Singles Day (an annual online shopping day for sale which falls on Nov 11) sales, clothes brand HLA, known as the “Chinese Zara,” was number one in menswear on Tmall, bringing in over 400 million yuan ($64 million) in sales. HLA’s down jackets outsold all other categories. More than 220,000 were sold, for over 100 million yuan.
Uniqlo Co Ltd, a Japanese brand specializing in casual wear, ranked second in menswear sales and came in top for women’s sales.
During the Singles Day sales, the brand sold more than 100 million items within 1 minute.
According to Uniqlo China, down jackets are among the best sellers this winter, with “light” and “trendy” the key search words used the most.
“Customers now want a down jacket not just as cold weather gear, but also something that is light, chic, and cool,” Uniqlo China said.
According to Uniqlo China, 75 percent of consumers ranked “quality” as their primary concern when making purchase decisions, while 70 percent ranked “light” when choosing down jackets.
“Of course I also buy down jackets from Uniqlo, and other brands as long as the jackets can keep me warm and make me look pretty,” Amber Zhang said.
“After all, quality and fashion matter the most for down jackets, and then comes the price.”
Female consumers now focus more on how the clothes make them look when making decisions, compared with the past when they looked at sales prices.”
Neil Wang, president of the Chinese operations of consulting firm Frost & Sullivan Inc
Tourists wear thick down jackets walking on Chang’an Street in Beijing.