China's First Lady Sparks Interest in Chinese Luxury Brands

Last week, China's First Lady Peng Liyuan made headlines in the fashion world when she accompanied President Xi Jinping on his first official trip abroad to Russia wearing an understated, elegant coat, light blue scarf and black leather handbag. Comparisons to Michelle Obama, Jackie O and Carla Bruni abounded and the Chinese and International press alike were singing her praises. Liyuan's most headline-making move has been to do something we, in America, have come to expect (demand?) from our First Lady: She's embracing domestic, homegrown designers.
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Hayley Phelan
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Last week, China's First Lady Peng Liyuan made headlines in the fashion world when she accompanied President Xi Jinping on his first official trip abroad to Russia wearing an understated, elegant coat, light blue scarf and black leather handbag. Comparisons to Michelle Obama, Jackie O and Carla Bruni abounded and the Chinese and International press alike were singing her praises. Liyuan's most headline-making move has been to do something we, in America, have come to expect (demand?) from our First Lady: She's embracing domestic, homegrown designers.
Photo: Getty

Photo: Getty

Last week, China's First Lady Peng Liyuan made headlines in the fashion world when she accompanied President Xi Jinping on his first official trip abroad to Russia wearing an understated, elegant coat, light blue scarf and black leather handbag. Comparisons to Michelle Obama, Jackie O and Carla Bruni abounded and the Chinese and International press alike were singing her praises. According to WWD Vogue China is looking to score an interview with her--which is not as easy a feat in China as it is for Anna Wintour in the US.

There are several reasons why she's caused such a stir: Like Bruni, Liyuan was a very famous singer, arguably the most famous singer in China, before becoming First Lady, and her warm, friendly public image is helping to usher in a kind of openness and approachability that past leaders (and their wives) have lacked.

But when it comes to fashion, Liyuan's most headline-making move has been to do something we, in America, have come to expect (demand?) from our First Lady: She's embracing domestic, homegrown designers.

"There has been a perception that Western brands have better quality and better design," Jianhua Zhao, author of The Chinese Fashion Industry: An Ethnographic Approach, told us. "With the rise of the new generation of fashion designers, many of whom are trained or have working experience overseas, the designs and quality of high-end domestic brands are improving."

"However," he added, "Because domestic brands are still fairly new they do not command the same level of prestige as many older Western brands. [While] in the middle and lower range, Chinese consumers’ attitudes towards domestic brands have improved significantly in the past eight or 10 years, most upscale domestic brands still can’t compete with their Western counterparts."

But with the help of well-placed product on the backs of celebrities like Peng Liyuan that could be changing.

When Liyuan's coat and handbag were revealed to have been designed not by a European luxury company but by Guangzhou-based brand Exception de Mixmind, fashion frenzy ensued. The brand enjoyed a surge in sales, with a handbag, similar to the one Liyuan wore, completely selling out, according to The Global Times. It wasn't just Exception de MixMind that benefited: The bump in recognition lifted the whole high-end domestic fashion industry, with several brands seeing a jump in share price. Huang Hung's must-read China File column in today's WWD explains a bit more about how Exception de Mixmind scored such a prominent placement: the brand's founder is a member and founder of the China National Garment Association, the official Chinese agency, which means Exception is already vetted and approved. That might mean that other brands, who don't have an association with the government, won't score a First Lady endorsement so easily. Another snag on Liyuan's path to fashion icon status is that, according to Hung, Chinese officials want to downplay her fame, lest she eclipse her husband. Exception didn't immediately announce that they had dressed Liyuan--and this might be in part because of the government's reluctance to make her such a public figure. That being said, the Liyuan effect, as it were, has the potential to really invigorate the domestic luxury market.

"Should this trend—-Chinese celebrities endorsing domestic brands at high profile events—-continue, the image of domestic brands will slowly but surely improve as well," Zhao said.

It's a phenomenon some luxury conglomerates are betting on. Over three years ago Hermes developed and launched independent luxury company Shang Xia in Shanghai, with a Chinese creative director, and most recently, Kering (formerly PPR) bought luxury jewelry company Qeelin at the end of 2012. David Wu, a luxury goods analyst at Telsey Group, says we can expect more Western luxury companies to follow suit.

"More luxury brands are acquiring or developing home-grown Chinese brands, whether its Hermes with Shang Xia or the new skincare line Osiao at Estee Lauder, which uses Chinese ingredients, such as ginseng, in order to become more locally relevant," Wu said. By acquiring homegrown Chinese labels, luxury conglomerates are not only adjusting to consumers changing attitudes towards domestic labels, but gaining an edge in consumer insight. Chinese shopping habits vary from Western shopping habits in key ways--Zhao says Chinese tend to be more label conscious and prefer to shop in groups, among other things--something that domestic Chinese labels will intrinsically understand more than a foreign company.

So, as attitudes continue to change towards domestic labels, and luxury companies continue to foster them, chances are we're going to be hearing a lot more about homegrown Chinese labels. So, which are the ones to look out for? Wu filled us in.

Click through to find out.