{"id":1478,"date":"2021-02-04T02:47:34","date_gmt":"2021-02-04T01:47:34","guid":{"rendered":"https:\/\/trilogi.com\/en\/blog\/italian-fashion-win-the-chinese-market-win-the-world\/"},"modified":"2023-07-13T10:51:23","modified_gmt":"2023-07-13T08:51:23","slug":"italian-fashion-win-the-chinese-market-win-the-world","status":"publish","type":"post","link":"https:\/\/trilogi.com\/en\/blog\/italian-fashion-win-the-chinese-market-win-the-world\/","title":{"rendered":"Italian Fashion | Win the Chinese Market, Win the World"},"content":{"rendered":"\n

Italian fashion brands are making huge profits in China, as they’re regarded as a \u201cluxury\u201d by Chinese consumers. In fact, consumers keep spending money into this market despite the slowdown of the economy. Brands like Gucci and Moncler have recently regenerated and shown explosive growth thanks to their tailored market strategies in China. They are salutary examples for those brands feeling adrift.<\/p>\n\n\n\n

The Made-in-Italy speaks for itself <\/strong><\/h2>\n\n\n\n

Made-in-Italy = Luxury<\/em><\/strong><\/h3>\n\n\n\n

Commodities labeled “made in Italy” are highly priced in China, especially fashion products. The value of Italian fashion products doubles once entering China<\/strong>, by the likes of their delicate design and fine quality together with prestigious brand history. <\/p>\n\n\n\n

For decades, China has been regarded as the world’s factory, known for mass production of cheap fast fashion and counterfeit goods. Although Chinese domestic fashion brands are increasingly emerging, most of them are still lacking innovation and attractive brand image. In this context, the Chinese high-end fashion market has been invaded by foreign brands, with Italian fashion brands playing a major role. <\/strong><\/p>\n\n\n\n

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Sales Boom<\/em><\/strong><\/h2>\n\n\n\n

Italy was the third largest<\/strong> EU exporter to China in 2018 – mainly for mechanical products, transportation equipment, fashion and textiles, and furniture. The trade cooperation between China and Italy is getting firmer, and this positive trend seems to continue in the near future. The overall export volume increased 22.2 percent in 2018, in which fashion and textiles take up nearly 13 percent of the whole.<\/strong> At the same time, Chinese demand for leather goods and accessories grows at a 20 percent rate, followed by clothing and footwear (respectively +8% and +11%).<\/p>\n\n\n\n

Chinese increased purchasing power stimulated the development of Italian fashion brands<\/strong> despite an overall slump in the worldwide brick and mortar business. Italian fashion brands in 2016, for example, still saw a staggering 6.7 percent growth in Chinese physical stores, whereas in the EU and US markets they mainly suffered a deficit.<\/p>\n\n\n\n

In short, Italy’s fashion – especially luxury brands – heavily relies on Chinese consumers<\/strong>. According to Mediobanca, an Italian investment bank, 33 percent of Italian luxury’s consumers come from China, way more than consumers from any other country.<\/p>\n\n\n\n

 <\/p>\n\n\n\n

Rich Chinese Consumers Crave for More Luxury<\/strong><\/h2>\n\n\n\n

The growth trend of global – not only Italian – luxury is to a large extent contributed by Chinese consumers. According to Bain&Company, their expenditure in luxury products continues to rise, accounting for 33 percent of the total in 2018. More importantly, the mainland China domestic market is drawing more and more attention<\/strong>, as it grew 20 percent year-over-year in 2018, reaching \u20ac23 billion. Chinese domestic demand for luxury will see an even more rapid increase, due to the crackdown of the Daigou business by the government (starting January 2019). Actually, between 2015 and 2018 domestic luxury sales already grew at a double rate compared to abroad ones.<\/p>\n\n\n\n

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The Chinese economic slowdown doesn’t seem to affect the luxury sector. <\/strong>The “Chinese Luxury Report 2019” by RuderFinn revealed that in 2018 Chinese mainland high-end consumers (who earn on average 1.4 million RMB) spent around 240,000 RMB per capita on luxury goods, almost 90,000 RMB more than their Hong Kong counterparts. In addition, 46 percent of Mainland consumers are willing to spend more on luxury in the upcoming years.<\/p>\n\n\n\n

In terms of consumer groups, in recent years millennials have dominated the global luxury industry<\/strong>. They are the real locomotive of this industry, spending the most in absolute value among all age groups. Generation Z is the second group in overall luxury spending, but buying on average more expensive products. RuderFinn predicted that millennials and generation Z together will represent 46 percent of the overall luxury consumption by 2025.<\/p>\n\n\n\n

 <\/p>\n\n\n\n

Italian Government & Brands: The Growing Awareness of the Chinese Market<\/strong><\/h2>\n\n\n\n

Aware of the big potential of this market, the Italian government last August formed a dedicated team called \u201cTask Force China\u201d, with the goal of further strengthening the trade relations between the two countries<\/strong>. Michele Geraci, Italian Deputy Minister of Economic Development, called on Italian entrepreneurs to seize the opportunity of getting a slice of China\u2019s enormous market profits and its increasing demand for high-quality goods.<\/p>\n\n\n\n

Actually, many fashion brands have already made moves towards the Chinese market spontaneously,<\/strong> considering the Chinese market one of their top five key markets. Among the top 50 brands (in terms of revenues) who have autonomously entered China, 38 of them have already opened Chinese official websites.<\/p>\n\n\n\n

 <\/p>\n\n\n\n

Successful Italian Brands in China: Which One Will be the Next?<\/strong><\/h2>\n\n\n\n
GUCCI<\/strong><\/pre>\n\n\n\n
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Gucci revitalized itself from a sluggish phase after 2015, growing on average at a nearly 50 percent rate year-over-year. In particular, e-commerce was one of the key sales channels, with online sales up 70 percent<\/strong>. How?<\/p>\n\n\n\n
Gucci\u2019s success on social media soared orders from Chinese consumers. Being the top-mentioned brand by KOLs on WeChat and Xiao Hong Shu (RED), it also seized the opportunity to launch DTC (Direct to Consumer) and WeChat eCommerce to engage consumers in the sales dimension.<\/p>\n\n\n\n
Moncler<\/strong><\/pre>\n\n\n\n
Moncler is now among the most popular outdoor wear brands in China. This market is now leading Asia to be the core sales driver of Moncler, with a 32 percent growth rate in 2018, accounting for 39 percent of the worldwide market<\/strong>.<\/p>\n\n\n\n
Moncler\u2019s vitality comes from its willingness to change, with the idea of cutting out old unprofitable lines and collaborating with hot fashion designers around the world, along with opening pop-up shops. <\/p>\n\n\n\n
Love Moschino<\/strong><\/pre>\n\n\n\n
Love Moschino\u2019s brilliant strategic choices on marketing led its parent company AEFFE Group to achieve extraordinary results, especially in Greater China where sales are booming thanks to Moschino (+67.8% in 2017) and account for 22.5% of total revenue.<\/strong><\/p>\n\n\n\n
To shape brand image, Love Moschino chose famous KPOP idols (and KOLs) like Chinese singer Miss A Jia, Korean band 2NE1\u2019s (formed by the singers CL and Dara) and Korean singer SHINee\u2019s Key to promote 2014 Love Moschino\u2019s genius McDonald\u2019s-inspired collection (where the heart resembles McDonald\u2019s M), which had an unprecedented success.<\/p>\n\n\n\n
\u2026\u2026<\/p>\n\n\n\n
Will your brand be the next one?<\/strong><\/p>\n\n\n\n
 <\/p>\n\n\n\n
Key Takeaways<\/strong><\/h2>\n\n\n\n
  • Chinese consumers are keen followers of Italian fashion brands<\/li>
  • Chinese luxury consumption keeps growing despite the economic slowdown<\/li>
  • Both the Italian government and fashion brands have realized the huge potential of the Chinese market and are trying to catch this opportunity<\/li>
  • Successful brands based their success on customized marketing and sales strategies, in conjunction with willingness to change and adapt to the market<\/li><\/ul>\n\n\n\n
    <\/span>
    \n
    Italian Fashion | Win the Chinese Market, Win the World<\/p>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"
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