To sell more online or hope brick and mortar sales recover? For Chinese fashion the only certainty is uncertainty
- For some labels hit by a collapse in sales, the risks of switching to online stores are too great. For others, such as Chictopia, it’s a strategy that works
- No one knows if customers will buy more, or less. Leading designer Masha Ma hopes life will go back to normal, but Alicia Lee may scale back her collections
Humour is hard to come by at the moment, but a T-shirt design depicting a baijiu bottle logo on a disinfectant spray container by Beijing-based brand Plastered has had people cracking a wry grin. (Baijiu is a fiery Chinese spirit.)
Not that the brand’s owner, or many other independent Chinese designers, have much to smile about when they look at fashion sales during the current coronavirus pandemic.
Many companies rely on selling their clothing in physical stores and malls, which have mostly been empty or closed for the past two months.
Although there has been some experimentation with online sales, there is a general feeling that the carefully cultivated image and prestige of a brand – not to mention its pricing – run the risk of being diluted if sales are conducted by a third party via live-streaming. It is understandable, but it has meant losing out on the recent surge in live-stream sales.
It is a business that Johnson-Hill has painstakingly built over the past 14 years, carving out a niche with whimsical and witty pop-art designs and generating annual revenues of up to 7 million yuan (US$988,000). Business had been booming, but now it has stuttered to a virtual halt, with minimal income and outgoings of 150,000 yuan a month – making lay-offs all but inevitable.
“This year will be very low on income and depressingly short on new ideas, especially the risky ones,” Johnson-Hill says. “I am a bricks-and-mortar retailer, which is not ideal in the current circumstances, and I am also geared towards people who travel to the capital and want to buy something quintessentially Beijing. Online is only about 15 per cent of our business.
“Either I risk what I have and build a new online model, or curl up, hedgehog style, and hope things get back to normal. It is absolutely devastating – this year is a write-off.”
Tourism-dependent businesses aside, recent weeks have seen a resurgence of spending in China, where the streets and malls of Beijing and Shanghai are busy once more. However, this may well be a short-term flourish. It is anyone’s guess as to just what demand will be like in China, Europe or the United States in six months’ time.
“We have to decide by the end of April on placing factory orders for the next season. It is complicated, because not every single factory is open, and that restricts your production ability and delivery time. We are looking at a 30 or 40 per cent drop, I think.”
Wang, who is holding virtual showrooms and video calls for customers, says sales are picking up in China. She is mulling over ideas for her next collection, and how to properly reflect the likely mood of international buyers when lockdowns end.
That, in itself, is a conundrum: will people be subdued, reflective and frugal or in a celebratory, free-spending frame of mind?
There has been ample time for Zhang to think ahead – his spring/summer collection was shipped out from Qingdao to high-end stores in Europe and the US before the lunar new year in late January.
“It means we were one of the lucky ones,” Zhang says. “Since the pandemic, there are lots of department stores cancelling orders, but we delivered fully before it started.
“We have a rather large international business, so when the world has a problem we have a problem. Now, nobody is in the mood to buy clothes, but it doesn’t mean that fashion will stop. I think, once back to normal, they might double or triple [what they] buy because they haven’t had a chance to buy anything, so they will be in more of a mood to celebrate and treat themselves nicely.
“You have to be optimistic – we have invested so much in this, you can’t just give it up when you have a crisis. It forces you to rethink how your business will work.”
Lau has been gradually moving her Chictopia brand towards online sales – a decision that has proved prescient. Although there are plans to scale back the next collection, staff are back at work in the label’s Beijing-based headquarters and online sales are holding up.
“I will develop the online store, and work with showrooms around the world to develop international business rather than opening physical stores,” says Hong Kong-raised Lau. “I have been trying to shift it online for more than a year now – I want to spend more time with my daughter, and we are moving back to Canada at a future date.”
“When you try to think of long-term plans, there are so many uncertainties,” she says, neatly summarising the dilemma of all in the fashion industry, whether it is own-label Chinese designers, European conglomerates or this summer’s fashion school graduates.