Luxury brands are betting on the power of the rabbit — and the return of Chinese buyers

Wrote Oscar Holland, CNN

A version of this story appeared in CNN’s Meanwhile in China newsletter, a three-times-weekly update that explores what you need to know about the country’s rise and how it’s affecting the world. Apply here.
In the “Great Race” of the Jade Emperor, a folk tale that dictates the order of animals in the Chinese zodiac, it was the rabbit who experienced an unlikely stroke of luck. Clinging to a log in the swift river, the helpless creature was helped by a dragon, which pushed it across the finish line with a powerful breath.

With this Sunday marking the start of the Lunar New Year, major Western fashion houses are hoping that they – like the bunnies they’ve splashed across handbags, shoes and clothes to mark the occasion – will also benefit from an unexpected boost over the holiday season. season.

The proverbial dragon in this story is Chinese consumers, who in 2021 spent 821 billion yuan (US$121 billion) on dining and shopping during the holiday season. And as the country emerges from three years of austere Covid-free measures, including mass testing, a sudden lockdown and travel restrictions – most of which were lifted without notice in December – record labels are hoping spending will pick up after a sluggish Year of the Tiger.
The country’s luxury sector quickly recovered from the initial Covid-19 outbreak. Consulting firm Bain & Company reported that domestic sales of personal luxury goods nearly doubled in the two years from 2020. But last year proved challenging. Full or partial lockdowns in cities such as Shanghai and Shenzhen have weighed on sales, with year-on-year discretionary (or non-essential) spending falling 3.1% between January and November, according to the latest data from business consultancy Oliver Wyman.

“In 2021, all the luxury brands were winning, but 2022 was a much tougher year — a real rollercoaster for brands with all the blockages… and consumer sentiment at an all-time low,” said Imke Wouters, Hong Kong-partner at Oliver Wyman. in a video call, adding: “There are still brands that are doing very well, but many are not doing so well, especially towards the end of (last) year.”

Mulberry's Lunar New Year collection features the Dutch cartoon rabbit Miffy.

Mulberry’s Lunar New Year collection features the Dutch cartoon rabbit Miffy. Credit: Mercis bv

The year of the arrival of the Rabbit can herald a change in fate. Long-standing holiday traditions include buying brand new clothes, often red, to ensure a fresh, auspicious start to the year. During the past decade, sports items with the theme of zodiac animals have also emerged as a trend. Brands were happy to oblige, sometimes at significant prices, from Burberry’s $1,290 bunny-eared beanie to Gucci’s $2,850 bunny-themed jacquard sweater. Other high-end labels also get involved in the annual ritual, whether it’s watches and jewelry or Davidoff’s rabbit-themed limited-edition cigars, which sold out before the holidays even started.
Interest in travel has also grown in China – albeit from a low start – with holiday travel bookings up 540% from last year, according to data from China’s In turn, regional shopping destinations such as Singapore, Macau and Hong Kong have seen shop windows filled with rabbit-themed decorations in anticipation of shoppers arriving from mainland China. Share prices of luxury groups including LVMH and Kering jumped after news that Covid-related border restrictions were being lifted.
Mannequins with bunny headbands in the window of the Loewe store on New Bond Street in London, UK.

Mannequins with bunny headbands in the window of the Loewe store on New Bond Street in London, UK. Credit: Jose Sarmento Matos/Bloomberg/Getty Images

But the latest report from Oliver Wyman suggests that, despite the increase, only 19% of Chinese still intend to travel over the festive period. Of these, about 88% will do so domestically, with roughly half traveling to visit family rather than for leisure.

The gradual return of travel could also reduce the disposable income available for fashion. According to Wouters, among the 1.5 million people who spent money on luxury goods in China in 2021, half did so for the first time. One of the reasons, she said, “is that they it is not travel,” meaning that they may now “have to make the same trade-off” between traveling and going shopping.

Stay or go?

However, the long-term question is not necessary whether Chinese consumers will start buying again – that is where they will do it.

Before the pandemic, about 70% of luxury consumption in the country took place abroad. Aside from the prestige associated with picking up goods in cities like Paris and Milan, the trip was a way to avoid the high domestic prices that resulted from China’s high import taxes.

But tariff cuts in 2018 and 2019 have dampened the incentive to buy overseas, according to Reuters, which reported that handbags are now about 10% to 20% more expensive in China than abroad (compared with margins of 50% or more). . in the previous decade). A recent push to lure mainland buyers to southern China’s tax-free island of Hainan, meanwhile, has offered a more practical local alternative.
Prada's sister brand Miu Miu eschewed traditional red this year, a color that previously dominated luxury brands' Lunar New Year campaigns.

Prada’s sister brand Miu Miu eschewed traditional red this year, a color that previously dominated luxury brands’ Lunar New Year campaigns. Credit: Miu Miu

There have been fundamental changes in the way Chinese customers and brands do business. As most of China’s luxury spending shifted to mainland stores during the pandemic, Western brands have spent the past three years investing in their mainland boutiques.

“The offering in mainland China has improved significantly in terms of the shopping experience, but also the level of service,” Wouters said, adding that the proportion of luxury spending happening overseas, rather than domestically, “will never return to what it was before. “

Brands are also finding new ways to interact with customers and organizing fashion shows in the country. In August 2020, when Louis Vuitton would normally present its spring-summer collection at Men’s Fashion Week in Paris, the French brand instead held a star-studded show on the banks of the Huangpu River in Shanghai. The likes of Dior and Prada have also hosted major shows in the country since the start of the pandemic.

Cultural understanding

The increasing nuance with which labels cater to Chinese audiences is reflected in this year’s collections, according to Bohan Qiu, whose Shanghai-based creative agency Boh Project works with fashion brands to appeal to mainland consumers.

“For many years all the brands have been coming out with these big prints of the zodiac animals and everything is in red,” he said by phone from France, where he is attending Paris Fashion Week. “It’s not ‘wrong’, but I feel like it’s not very contemporary anymore. I don’t know anyone, myself included, that I’ve seen buy an animal zodiac (luxury item) for a year.

Promotional shot from Prada's modest Lunar New Year campaign, "Memories of beauty."

Promotional shot from Prada’s modest Lunar New Year campaign, “Memories of Beauty”. Credit: Prada

“Other than designs that are a little more humorous or funny, if you just put a really obvious animal print on things, that seems like lazy marketing these days,” he added.

Several brands have turned to cartoon bunnies, with Moschino and Hugo Boss opting for Bugs Bunny, Tommy Hilfiger and Mulberry pushing products featuring Miffy and Versace imagining their own character, Biggie Bunny, complete with whoith sunglasses, a huge blister and fat sneakers. But many have taken a less literal approach, looking at traditional crafts or collaborating with Chinese creatives.
Take Bottega Veneta’s festive campaign, for example, in which Chinese director Jess Jing Zou produced a short film showing models returning home by train, boat or car through some of the country’s diverse landscapes. On the other hand, Prada’s “Memories of Beauty” campaign is completely rabbit-free, while sister brand Miu Miu’s capsule collection completely avoids the traditional color red.
The Bottega Veneta campaign is focused on the theme of returning home.  A train painted green with the Italian label's signature will travel through China carrying a message "on the roads that lead home, Happy New Year."

The Bottega Veneta campaign is focused on the theme of returning home. The train, painted in the green markings of the Italian label, will travel through China with the message “on the roads that lead home, happy New Year”. Credit: Bottega Veneta

Relatively timeless designs not only have a better chance of surviving the annual fashion cycle, Qiu said, they also demonstrate a better understanding of what today’s luxury buyers are looking for.

“People want more and more authenticity, and people want brands to really understand the cultural nuances and do something that doesn’t feel too harsh,” he said, pointing to Spanish label Loewe’s recent “Chinese Monochrome” collection — which reinvented the traditional the country of porcelain as leather goods — as an example of effectively attracting consumers from the mainland.

“Tradition is still important, but how do we look at it in a modern way?”

Image above: Campaign image for Gucci’s Year of the Rabbit capsule collection.

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