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ChinaFile: Mao's Way or the Paris Runway?

There are two ways to brand in China for the country's fashion labels.

There are two ways to brand in China for Chinese fashion labels.

One is to go abroad — as the Chinese say, the flower smells better beyond the walls; sort of our way of saying the grass is greener on the other side. Designers believe that international acceptance will bring them recognition in the domestic market. Following this strategy is Masha Ma, who is now permanently part of the Paris Fashion Week calendar. Following in Masha’s foot steps, designer Vega Wang will be showing in Milan in September.

Whether their international presence will bring them accolades at home and, more importantly, convert to increased business, still needs to be proven. I doubt the international sales it generates will be enough to cover the cost of such an exercise. It is an indirect way toward branding in China and its effectiveness is still uncertain.

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

The other approach is what I call Mao’s Strategy. In his famous military essay titled “Guerilla War,” Mao outlined his plan for the Communist Revolution. It would begin away from the urban centers, says the doctrine, establishing itself in the countryside first and taking over the cities after that. Guess what, it worked.

Most Chinese brands figure what worked for Mao will also work for them. Brands like Ochirly quickly became the corner store on China’s Main Street. With Western-sounding names, they are often mistaken as international brands. All this is part of the branding strategy. These brands grow quickly in China, often achieving the $100 million sales target in less than five years. Due to a lack of financing, quite a few local brands have expanded by licensing agreements with local partners. In the past year, these brands have indeed grown so quickly that they are now ready to tackle the large urban centers with flagships.

Mao’s way has certainly driven rapid growth. However, it does have its problems. Licensees in China often do not follow the masterbrand’s guidelines in store design and pricing policies. In addition, as the Chinese economy slows down, licensees are abandoning individual brands when sales do not meet their expectations. Even if the stores are opened directly by the brands, it is not as easy to hit sales targets as several years ago.

So that takes us to the Paris runway method. Although growth has slowed in China, perseverance has won some brands loyal followings among young fashionistas. And the word of mouth is getting around to a wider consumer circle. In addition, there are now more buyers in China. Aside from small boutiques, Lane Crawford has started to buy from Chinese designers, and there is word on the street that the soon-to-be-launched Neiman Marcus online store will also be buying some Chinese designs. This is when doing the Paris and Milan runways really pays off; international buyers are much more comfortable with designers they’ve seen on the European collections scene.

So, it’s either Mao’s way or the Paris runway. I wonder, why not both?

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