Pricey parkas make in­roads in chilly China

Younger, trendy con­sumers buy lead­ing Cana­dian and other brands

China Daily - - HOLIDAY | BIZ LIFE - By LIU YUKUN li­uyukun@chi­nadaily.com.cn

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

DU JIA / FOR CHINA DAILY

Tourists wear thick down jack­ets walk­ing on Chang’an Street in Bei­jing.

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