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ChinaFile: Chic Talk

The greatest differential between Mercedes-Benz China International Fashion Week, known as CHIC, and other fashion weeks is that there are no buyers.

BEIJING — The Mercedes-Benz China International Fashion Week, known as CHIC, just came to a close. I only managed to get to one event out of the whole week. But I learned a lot anyway.

CHIC happens twice a year, like fashion weeks elsewhere. The opening is always a little weird; last year CHIC opened with a German designer named Schumacher. This year it opened with a well-known local lingerie brand. There is a conference, which was highlighted this year by the presence of Yohji Yamamoto as a keynote speaker. There is also a fabric trade show, and, of course, fashion shows by mostly domestic brands.

RELATED STORY: Click Here for Last Week's 'ChinaFile' Column >>

The greatest differential between CHIC and other fashion weeks is that there are no buyers at CHIC. In China, department stores operate as landlords who lease out counter space, hence, no Chinese buyers for department stores. Recently a few boutiques started to buy from Chinese designers, including the one founded by yours truly in Beijing. This time, we tallied up all the boutiques similar to our own operation and came up with seven. Yes, in all of China, only seven retail brands actually buy, and the average floor space of these shops is less than 100 square meters per shop. Most of us take goods on a consignment basis, so almost none of the designers featured in our shop can actually afford to have a fashion show at CHIC.

So CHIC fashion shows feature mostly big domestic brands that started as export manufacturers. These operations started their own retail brands in smaller cities where international brands have little interest in establishing a presence. The best retail locations in China’s third- and fourth-tier cities are lined with these local brands; for example, Li-Ning instead of Nike or Adidas for active sportswear. At CHIC this year, everyone was talking about a local brand called Ochirly and its success in major cities in China as well as third- and fourth-tier cities. Ochirly was founded in 1999 as a women’s brand and has achieved considerable success, with turnover rumored to be in billions of RMB. It is now a group operating five brands across China. The Ochirly success story has encouraged other brands to make a move into major cities in China and challenge Western brands such as Only, Zara and H&M.

E-commerce was another hot topic at CHIC this year. I caught up with an advertising executive who services many domestic fashion brands. His predictions on the mad rush to fashion e-commerce are not very sunny. “They cannot survive on those margins,” Fang Tao said. “All the e-commerce sites (buy360.com, dangdang.com) are selling fashion and probably losing money. They are in a race to increase turnover, but I bet they are losing money with each order.” Fang is way more positive about e-commerce sites backed by major Western retailers such as Neiman Marcus. “These will be the premium sites; they will know how to maintain the status and differentiate themselves from the rest.”

I was happy to catch up with Mr. Zhou Shaoxiong, founder of the largest Chinese men’s wear brand, Sept Wolf. He also was impressed by Ochirly, and looking to invest in a brand for women. “I think you need to adapt to the market if you want to survive in Chinese fashion.” A year ago, Mr. Zhou dismissively characterized my store — selling local designers — as a hobby and a noble effort. Now, he wants to hire a young Chinese designer to start his women’s line, so he went to my store to cherry-pick and didn’t buy a thing. I guess what I do is a noble effort after all.

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