Archive for ‘fashion’


Chennai, home of Indian coffee, scoffs as Starbucks enters the market

When Starbucks opened its first coffeehouse in Chennai last month, its 50th in India, many people wondered why the chain had waited so long to come to the city. Was it because it was summoning up courage to enter the land of filter coffee?

The US chain, which has entered India in partnership with the Tata group, opened its first outlet in Mumbai in October 2012. But it took two years for Starbucks to come to Chennai, where it opened its first outlet in the Velachary area on July 10. It plans to open a second outlet soon, in the Alwarpet locality.

Chennai is famous for its ubiquitous filter coffee, a potent brew made in a cylindrical metal device with two compartments separated by a fine filter that allows water to percolate through a bed of coffee powder. The decoction that drips through into the bottom compartment is then mixed with milk and sugar to produce the famous Chennai filter coffee.

For now, youngsters are thronging the new Starbucks outlet, but filter coffee, brewed in most Chennai homes and available in low-cost eateries around the city, might yet prove to be formidable competition.

Starbucks’ representatives did not reply to specific queries about the chain’s prospects in Chennai. But because Starbucks is not a pioneer, it will not have to create a market for its style of coffeehouse: another chain has already done that.

Indeed, the first battle for coffee in Chennai took place a good 15 years ago, when the city got its first Western-style coffee house with Café Coffee Day‘s first outlet in Nungambakkam in 1999. Since then, the chain has grown to 74 cafés, becoming the largest in the city.

Starbucks, therefore, not only has another competitor in Café Coffee Day but also a fellow-traveller, albeit one that got an early start.

via – News. Politics. Culture..


Foreign Brands Shift Focus to China’s Second-Tier Cities – Businessweek

On March 15, luxury retailer Lane Crawford held a soft launch for its new store in Chengdu, a fast-growing metropolis in southwestern China. A few years ago, major fashion brands were concentrating on China’s leading first-tier cities: Beijing, Shanghai, Guangzhou, and Shenzhen. But today many are focusing on China’s second-tier and third-tier cities—which McKinsey Global Institute predicts will be home to 45 percent of China’s middle-class and high-income earners by 2022.

Chunxi Road shopping street in Chengdu

Hong Kong-based Lane Crawford is in good company in Chengdu. In 2010 the spacious Yanlord Landmark mall opened there; its current tenants include Burberry (BRBY:LN), Dior (CDI:FP), and Louis Vuitton (MC:FP). Of its 47 stores in mainland China, Louis Vuitton has already opened 36 in second-tier and third-tier cities. Tommy Hilfiger even has outlets in the western territories of Xinjiang and Tibet. Estée Lauder (EL) has more than 100 counters in more than 40 Chinese cities.

Domestic luxury brands looking to establish themselves as national chains are also focusing on second-tier cities. Guangzhou-based fashion label Nisiss, which sells breezy trousers and $900 cocktail dresses, opened two stores last year in Chengdu. This year it plans to open stores in Qingdao, Dalian, and Suzhou, among other cities.

via Foreign Brands Shift Focus to China’s Second-Tier Cities – Businessweek.

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Made-in-USA Luxury Brands Win Fans in China – Businessweek

Corina Su would love to own a handbag or shoes from luxury brands such as Louis Vuitton (MC:FP) or Gucci (KER:FP). For now, Kate Spade (KATE), Michael Kors (KORS), or Coach (COH) will do. “We call these the ‘American trendy brands,’ ” says Su, a 25-year-old who works in advertising in Shanghai. She prefers Kate Spade’s bright colors and bold designs to the more muted styles offered by big European luxury houses that tout their heritage to justify charging more. “I might eventually buy an LV or Gucci bag,” Su says. “But it won’t be until I’m much older, I suspect.”

A Kate Spade handbag

As Chinese shoppers such as Su get better acquainted with American luxury brands, they’re discovering a designer wardrobe doesn’t have to cost months of pay. That’s helping U.S. labels that offer fashions with a foreign pedigree but price tags in the hundreds of dollars even as European luxury-goods makers raise prices for some bags to more than $4,000 to combat slowing growth. “The Chinese market is developing into a middle-class market, looking a bit less elitist and a bit more American,” says Luca Solca, an analyst at Exane BNP Paribas.

via Made-in-USA Luxury Brands Win Fans in China – Businessweek.

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Scooter boom: Young women find gusto on India’s roads | Reuters

\’Plush pink\’ and \’burgundy bliss\’ scooters are the new buzz on India\’s roads, even as the rest of the autos market is sputtering amid an economic slowdown.

Honda Jazz scooter

Honda Jazz scooter (Photo credit: Wikipedia)

The scooters go by names such as \”Pleasure\”, but marketing aside, this new fleet of women-friendly bikes reflects a deeper change in attitude and society in India, and has captured the attention of foreign manufacturers such as Japan\’s Honda Motor Co Ltd and Yamaha Motor.

Young, well-heeled and independent-minded women, who are also conscious of the perils of using public transport, are helping to propel a boom in sales of scooters.

The rising popularity of the scooter comes at a time of nationwide protests against the prevalence of rape and sexual assault in India. In one case, a young female student died after she was gang-raped on a bus in Delhi.

Weighing convenience as well as safety, some young women, and their parents, see the scooter as the best solution for commuting to work, going to college or simply going out to meet friends.

Scooter sales were up nearly 20 percent in the nine months through December, according to Society of Indian Automobile Manufacturers data, easily outpacing the 2.5 percent sales growth of full-size motorcycles. Sales of cars, trucks and buses all fell.

Still, scooters accounted for only 20 percent of India\’s 14 million-unit two-wheeler market in the last financial year. Two wheelers are the most common mode of transport for millions of middle-class Indians.

Both Honda and Yamaha have identified the growth potential in scooters, and are building models designed for women and adding new plants to keep up with demand.

\”College-going girls and working women are really creating this demand-wave in the scooter segment,\” said Abdul Majeed, a partner at PricewaterhouseCoopers India.

\”Housewives are also using scooters to drop (off) kids and buy vegetables,\” Majeed said, adding that he expects strong sales growth to continue and for companies to launch more scooters geared towards women.

Yamaha launched its first Indian scooter designed for women, the Ray, in 2012. The bike sells for around about 47,000 rupees ($750) and comes in colors such as \’starry white\’, \’plush pink\’ and \’burgundy bliss\’. About 70 percent of the women who buy it for themselves are under 30, the company says.

\”They don\’t want to trouble their parents or brothers. They want personal mobility,\” said Roy Kurian, vice president of marketing and sales at Yamaha in India. \”If a guy had to ride then he would have gone for a motorcycle,\” he said.

via Scooter boom: Young women find gusto on India’s roads | Reuters.

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Apple’s Deals With Top Carriers in Japan, China May Spur iPhone Sales – Businessweek

As Apple (AAPL) and Samsung (005930:KS) rumble for leadership in the global smartphone market, the Korean electronics giant has enjoyed a big advantage. In China and Japan, Asia’s two biggest economies, Samsung had deals with the No. 1 mobile operators to sell its handsets—and Apple didn’t. Despite years of trying, the maker of the iPhone couldn’t win over China Mobile (941:HK) or Japan’s NTT Docomo (9437:JP). The two carriers have 821 million customers combined.

An Apple Store in Beijing

Apple’s Asia handicap may soon be a thing of the past. In Japan, Docomo began offering the iPhone in September. Meanwhile, Apple Chief Executive Officer Tim Cook’s shuttle diplomacy may be about to bear fruit in China. Although iPhones don’t work on China Mobile’s homegrown 3G standard, they do on the LTE technology the operator plans to use for its 4G service, which it will likely roll out by early 2014.

The timing of Apple’s breakthroughs in Japan and China is no coincidence. Because of their longtime dominance in their home markets, neither China Mobile nor Docomo felt the need to make concessions to offer the iPhone. Yet smaller rivals, such as China Unicom and SoftBank (9984:JP), that have inked deals with Apple are capitalizing on the iPhone’s popularity to woo customers.

via Apple’s Deals With Top Carriers in Japan, China May Spur iPhone Sales – Businessweek.


* China’s Airport Building Boom

BusinessWeek: “The first rule of airline travel in China is: Don’t cut connections close. Assume your first flight will be late, and leave plenty of time than to scramble to your next gate. Fortunately, if you’re flying between major Chinese cities, you can bide your time in a gleaming new airport with plenty of shops selling tea, lattes, snacks, souvenirs, and even prestige apparel. (Only in Chinese airports have I seen stores selling “BMW Lifestyle” clothing).

Beijing Capital Airport

In China, travel is booming, giving rise to new airports and hotels to accommodate the inbound masses. The International Air Transport Association forecasts that by 2016, China will have 415 million fliers annually, second only to the U.S. in volume of domestic passengers. Volume at the Beijing Capital Airport has tripled in the last 10 years; the city’s second major airport will open by 2018. In all, the current Five Year Plan calls for 55 new civil airports by 2015, bringing China’s total to 230.

The build-out is good news for the obvious suspects, including travelers, hotels, and retailers that profit from travel. In a recent report, the Virginia-based Global Business Travel Association estimated that spending related to business travel in China will increase 14.7 percent in 2013, to $224 billion. (GBTA estimates comparable spending in the U.S. in 2013 will be $268.5 billion.)

For many of the Chinese cities caught up in the airport-construction boom, it’s been a mixed blessing. In 2011, China’s Civil Aviation Administration recorded that 75 percent of its civil airports were operating at a loss, according to the China Daily. High levels of debt assumed by local governments to finance airports and other large infrastructure projects are a growing worry for China. Last month Fitch downgraded China’s credit rating, expressing concerns especially about local debt. In its assessment, the credit rating agency noted: “Fitch believes total credit in the economy including various forms of ‘shadow banking‘ activity may have reached 198 percent of GDP at end-2012, up from 125 percent at end-2008.”

One component of the mismatch is that Chinese airline carriers have focused on connecting major hubs, with far fewer flights to secondary destinations. As a result, while small regional airports are often eerily quiet, industry analysts believe Beijing’s Capital Airport is on track to overtake Atlanta’s Hartsfield-Jackson International Airport as the world’s busiest.”

via China’s Airport Building Boom – Businessweek.


* Yiwu’s purveyors of Christmas tat give China a dose of ho-ho-ho

This article illustrates extremely well our view that the Chinese mindset is practical, materialistic and down-to-earth. And I am talking about the entrepreneurs at Yiwu City and the shopkeepers embracing the Christmas spirit (or at least the Christmas decorations anyway); as well as the average urbanite who wants to celebrate international festivals whatever the origin and raison d’etre.

The Times: “On Thursday the Ling Guo massage parlour, in the central business district of Beijing, suddenly turned festive.

A vendor hangs Christmas decorations in between Santa Claus dolls at her stall ahead of Christmas at a wholesale market in Wuhan, Hubei province, ChinaAn outsized image of Father Christmas beamed from the window, flanked by a manic array of snowmen, reindeer and present-stuffed stockings. The masseuses greeted customers in Santa hats.

It is not a triumph of Western culture, but of raw Chinese salesmanship, entrepreneurial flair and desperation.

Elsewhere, the festive decorations are up, adorning everything from roadside noodle shops to suburban shopping malls. Where China’s Christmas lights used to be restricted to the big hotels and stores in Beijing and Shanghai, the briskest sales are now to small shops in provincial cities.

“We are absolutely focused more on the Chinese market and we are shifting 2,000 plastic Christmas trees a day domestically,” said Liu Qing, from Yanghang Art and Crafts, who has been part of the all-out push by manufacturers to persuade the Chinese to celebrate someone else’s season of goodwill.

“Our biggest buyers are now from Shandong and Chongqing, which is so different from a couple of years ago,” Mr Liu said. “Chinese people’s living standards have improved so much, so people start going after something more spiritual. Christmas is a lively holiday. The younger generations like it.”

For a growing number of Chinese businesses making Christmas-related goods, domestic sales now represent their single biggest — and often fastest-growing — market. It is an unexpected development in a country that does not celebrate Christmas. Without it, though, hundreds of factories would be driven to bankruptcy because, despite strong sales, Santa’s Chinese elves are working on tiny margins.

The key to the tinsel-strewn, gold-baubled Christmas-ification of China is to be found on the country’s east coast in Yiwu, the acknowledged world hub of yuletide tat — or “ornamental handicrafts” as they are described by the city’s factory owners.

It is from these workshops that Yiwu annually exports about £200 million of plastic trees, self-illuminating angel choirs and every other Christmas decoration conceivable. Other manufacturing centres in China also feed into the great £1.3 billion flow of Christmas exports, but none do it with such determination and concentration as Yiwu.

The problem, however, is that Yiwu became too good at its trade at just the wrong moment. In 2010 the city had 400 companies making Christmas products; now there are more than 750, with about 120,000 workers engaged in making Christmas goods.

The huge jump in capacity and competition coincided with a drop of about 25 per cent in what had traditionally been Yiwu’s strongest markets for its tawdry wares, Europe and the United States. The effect on profits has been harsh. This year labour costs in Yiwu have risen by 15 per cent and material prices have risen by about 10 per cent.

Chen Jinlin, from the Yiwu Christmas Products Industry Association, said that some of his members have suffered 20 per cent to 25 per cent declines in orders. “There are nearly twice as many companies as there were two years ago fighting for pieces of a smaller cake,” he said. “We are encouraging manufacturers to develop new products, especially lower-cost ones, to adjust to the new economic reality.”

But the longer-term answer, said Mr Hu, the sales manager of the Youlide Art & Crafts Company, has to be to look for new markets, China being the most convenient and potentially vast. Many of Yiwu’s Christmas goodsmakers have seen the domestic share of their sales rocket to 20 per cent of the total over one or two years.

They have also changed the way that they look at opportunities abroad: a shift of marketing focus has made Brazil the largest export destination for Yiwu’s Christmas goods, accounting for 12 per cent of the total. A similar drive has proved successful in Russia, where sales of Yiwu’s seasonal goods have tripled in the past year.

“About 80 per cent of our products go to South America, so we’ve had to change things to reflect that,” Mr Hu said. “Brazilians like their artificial Christmas trees in a paler shade of green than the Europeans.””

via Yiwu’s purveyors of Christmas tat give China a dose of ho-ho-ho | The Times.

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* All that glitters is sold

China Daily: “With the rapid development of China’s economy, Chinese consumers’ appetite for jewellery has continued to grow, resulting in consistent sales growth in the domestic market.

All that glitters is sold

In 2011, spending in China’s retail jewellery market reached 40 billion yuan ($6.3 billion), making it the world’s largest consumer market for platinum and jade, and the second-largest diamond jewellery consumer after the US. But in addition to being one of the world’s largest jewellery consumers, China has gradually emerged as a competitive jewellery maker in the international market.

In fewer than 20 years, China’s jewellery industry has grown rapidly, and Shenzhen, a booming city in South China’s Guangdong province, has played a crucial role in leading this industry.

Thanks to the influence of Hong Kong’s industry, the past two decades have seen Shenzhen evolve into China’s jewellery capital. Since the 1990s, the city has been acknowledged as China’s biggest jewellery manufacturing base and trade distribution center.

According to the Gems and Jewellery Trade Association of Shenzhen, more than 2,000 jewellery companies now call the city home, and their annual output value of more than 50 billion yuan accounts for more than 70 percent of China’s overall jewellery production. In fact, the sales revenue of Shenzhen’s jewellery enterprises is not just ranked first in terms of domestic market share, it makes up about one-third of China’s total.

But jewellers in Shenzhen are no longer content to remain the largest outsourcing base for brands from Hong Kong or other parts of the world. They are trying to reshape old business models by investing heavily in branding their own independently designed products, aspiring to upgrade Shenzhen from an international hub of original equipment manufacturers to the birthplace of famous jewellery brands.

Some jewellers in Shenzhen have taken the lead in brand-building campaign. One of the most successful is Chow Tai Seng Jewelry Co Ltd, a large jewellery producer based in the city.

Established in 1966, Chow Tai Seng Jewelry is now one of the largest diamond-jewellery retailers and wholesalers in China. It currently has the largest jewellery chain in the country, with more than 2,000 shops in more than 300 Chinese cities.

The company posted sales revenue of 13 billion yuan (US$2 billion) in 2011, accounting for 7.1 percent of the market. Zhou Zongwen, board chairman of Chow Tai Seng Jewelry, said sales this year are expected to increase by about 30 percent over the previous year, and the company will maintain this robust growth momentum in the next few years.”

via All that glitters is sold |Economy |

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* Chinese fashion group has global designs

FT: “When research agency Millward Brown Optimor released rankings of the fastest growing global brands this week, at number 10 was a company that most Financial Times readers have probably never heard of: Chinese youth fashion brand Metersbonwe.

Some mainland brands are becoming household names in the west – such as Lenovo, Haier or Huawei – but they were not on the list. Instead, unknown Metersbonwe appeared, just a few slots below Apple.

Present in even the smallest Chinese cities, Metersbonwe will soon be coming to a high street near you if Zhou Chengjian, founder and chairman of the board, has his way. Within three to five years, he plans to push into the fashion markets of London, Paris, New York and Milan with his youthful and inexpensive designs.With revenue last year of Rmb10bn ($1.6bn) and net profit of Rmb1.2bn – up 32 and 59 per cent respectively year on year – Metersbonwe has done what so few other Chinese brands have been able to: outpace foreign rivals in the hyper-competitive mainland fashion market.

Millward Brown Optimor ranked Metersbonwe tenth in the world for “brand momentum” – advertising-speak for growth potential and consumer popularity. The result was based entirely on the company’s performance in China, where Euromonitor says Shenzhen-listed Metersbonwe is the third-largest apparel brand by sales behind Nike and Anta, a local sportswear brand. Even China’s economic slowdown seems not to be dimming the company’s lustre: Metersbonwe is predicting a 20 per cent rise in revenues and net profit this year, with sales so far appearing recession-proof.

The Metersbonwe story embodies the phrase “rags to riches”. Mr Chengjian, 46, who created the company 17 years ago, started out as a penniless tailor. Now he is the second richest person in Shanghai – a city of the stunningly wealthy – with a fortune of nearly $5bn, according to the latest Hurun rich list. A peasant from a tiny village in coastal Zhejiang province, he says he was no good at school, did not enjoy working in the sun and rain on construction sites, but did like the soft feel of fabric under his fingers so became a tailor. “My dream is to be the world’s tailor,” he told the FT in an interview this week, in an office decorated with posters of Chinese leaders Mao Zedong and Deng Xiaoping. His staff say he reveres Mao because he “made China free” and Deng because he “made China open”.

Mr Zhou says there is no particular secret to his success, apart from keeping his head amid all the fabulous opportunities for making money. “I work very hard and China is developing very fast,” he said. “Other Chinese companies dabble in too many things. But we set out 10 years ago to focus only on fashion.” He created a downmarket version of H&M and Zara, targeting college students and recent graduates, with a brand that many think is European.

Although Mr Zhou claims Metersbonwe was first a Mandarin name, many of its shops carry most prominently only the English transliteration, an obvious attempt to appeal to Chinese consumers who equate foreign brands with better style and quality.

“They did the right thing at the right time,” says Wu Xiaobo, dean of the school of management of Zhejiang University, who points out that Metersbonwe was the first garment company in China to adopt the international practice of outsourcing all manufacturing. …

With international retailers beating a path to China to make money, why is Mr Zhou so intent on launching overseas? In his typically earthy way, Mr Zhou says he is like a frog in boiling water, where the water is the increasingly competitive Chinese fashion scene. If he hangs around too long, he will die; there is no alternative but to jump out while there is still time – to become a household name around the world.”

via Chinese fashion group has global designs –

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