Western first world fashion brands are under pressure from local preferences in China. The rising strength of the U.S. dollar has not helped the bad taste left by counterfeited goods. ‘Made by China’ is becoming as powerful a draw card as ‘Made in China’ ever was. Fashion brands like Burberry, Chanel, Dunhill, Hermes, Prada, and Ralph Lauren are hoping to counter this by selling locals their brand of soul food too.
Feeding China’s Dining Passion with Fashion Brands
China’s emerging middle class has a passion for dining out. According to Unilever, 85% of them do so once a week. Serving lunches in department stores like Burberry’s in London and Ralph Lauren in New York is a long-standing tradition. Last month, Gucci opened a bistro in Shanghai serving sophisticated European cuisine in a setting of unashamed luxury.
How Some Fashion Brands Benefit From the Halo Effect
Brands build out based on intrinsic excellence, and association with already popular phenomena. Nike has done well with sports advertising, although it is an open question whether its products are realty better that its competitors. George Armani has been expanding into China, while Wolf & Badger ascribe 20% of customer growth to the health drink store in their basement.
But Will the Glitter Stick in China?
Based on recent experiences, the glamour may not attach to fashion brands as some in China have hoped. Prada’s restaurants have shrunk from 49 to 33 since 2014, while Chanel’s total is down to 11, less than half its peak. When their erstwhile customers agree to meet for lunch but find a deserted shell, this may result in an association the company never wanted.
Chinese consumers are switching to local clones of famous fashion brands, motor cars and smartphones in increasing numbers, as economic conditions bite and loyalty to brand China tightens. Western fashion brands may need to do more than simply enter the restaurant market in China. They may also need to manufacture more than boutique food locally, in order to compete.