Aquascutum with Chinese characteristics
Though many parts of China are spared England's drizzle and its cool weather, London-based trench coat pioneer Aquascutum is making inroads among deep-pocketed consumers on the mainland.
YGM Trading, which owns the 160-year-old brand in most of Asia, including Hong Kong and the mainland, rejuvenated the label's image and modified its design in accordance with local demand and weather, managing director William Fu Sing-yam said in an interview.
A trench coat costing as much as 40,000 yuan (HK$48,800), which might sell well in northeast China, might not be equally popular in Guangdong, he said.
'There are differences in culture and weather in northern and southern China, which means one design can't go everywhere,' Fu said.
Knowing the regional discrepancies in weather, shoppers' tastes, culture and sense of value is key to prying open the robust but competitive domestic consumer market on the mainland, he said.
YGM Trading, which is part of the garment manufacturer and retailer YGM Group, founded in 1949, is among tens of thousands of exporters in the Pearl River Delta pushed by a state policy to upgrade, relocate or tap the domestic market.
The fast-emerging middle class in China has a thirst for luxury. Mainland travellers generated up to half the sales at Galeries Lafayette department stores in France last summer.
YGM wants to more than double the number of its shops on the mainland to 255 by 2015, Fu said. Aquascutum is the bread and butter of the group's portfolio, which also includes the labels Michel Rene, Ashworth, J. Lindeberg and Guy Laroche.
Fu said Aquascutum would launch clothing for children aged two to eight and accessories, such as leather goods, to carve out a larger slice of the market.
'Shoppers, particularly in the northern parts of the mainland, dress themselves up well and even buyapparel as gifts,' Fu said. 'However, for people in southern China, their priorities are housing, cars and food - ahead of clothes.'
Fu said the design team at YGM's Hong Kong headquarters modify the designs from London.
For example, consumers in northeastern China, which has cool weather and indoor heating, prefer their trench coats shorter, with thicker, knitted fabric, fur seams and single-breasted. A London-designed trench coat commonly has a longer body and is double-breasted but without fur, he said.
Fu said Aquascutum apparel is made in England, Italy, Japan, Hong Kong and on the mainland. He said mainland shoppers are aware of their origin, as price tags vary from 7,500 yuan to 40,000 yuan for a trench coat, and 7,000 yuan to 10,000 yuan for a woman's suit.
He said Aquascutum products were expected to account for 60 per cent of the group's revenue by the end of March next year, up from 56.2 per cent or HK$649 million last fiscal year.
YGM chose to focus on higher-end products, which have a higher profit margin and offer more room to offset cost inflation, Fu said.
He said the group's gross profit was about 60 per cent, which could cushion steep inflation in wages, rents and raw materials.