Swarovski Forum Details China’s Growth Cities, Multibrand Potential

SHANGHAI–Though there wasn’t much of a vista from the 93rd floor of the Park Hyatt on a rainy Thursday in Shanghai, inside there were sparkling jewels and ideas in abundance as Swarovski hosted its first innovation forum in China’s financial capital.

Alongside presentations from a variety of speakers on topics as varied as digital marketing, global branding, design thinking, intellectual property and sustainable fashion were rooms devoted to exhibiting collaborations from Atelier Swarovski jewelry (from brands such as Lanvin and Rosie Assoulin), homewares and fashion.

The audience was largely made up of Chinese designers, design students, retailers and media interested in innovations as they apply both to the fashion industry and more broadly to design overall.

Chinese designer Simon Gao spoke about the importance of independent brands thinking globally in order to capitalize on a rapidly shrinking world marketplace. Gao’s own background includes stints in places as farflung as Singapore, Switzerland and New Zealand, experiences he says helped him understand “new generation consumers” from around the world.

Looking at the China market, Gao pointed to advantages for independent brands operating here, in particular the many different sales models sprouting as part of China’s modern retail and e-tail infrastructure, including a recent proliferation of multibrand stores as well as the ability for brands to utilize platforms such as Alibaba’s Tmall to access consumers in a variety of ways. “The environment here in China is getting better and better for designer brands,” Gao said. On the topic of multibrand stores, which have boomed in China since 2011, Bedi Ye, chief operating officer of DFO International showrooms, detailed the results of research he has undertaken in conjunction with Shanghai’s Donghua University.

According to Ye, the Chinese cities in which multibrand stores have flourished don’t necessarily correlate with the economic power or consumer spending power of a city. Rather, the location of a city as a regional center for shopping is the biggest indicator of the successful development of a multibrand store culture.

As most would expect, major first-tier cities on the eastern seaboard – such as Shanghai and Beijing – have developed fastest to this point, with particular recent growth and future potential noted in China’s southwest, in major metro areas such add Chongqing and Chengdu. Also cited by Ye as cities of the future for growth in multibrand stores were the capital cities of three of China’s southern provinces – Guiyang, Nanning and Kunming.

According to Bedi, multibrand remains a challenging proposition below the first-tier consumer markets, where brick and mortar retailing is still dominated by department stores and newly opened multibrand players have a hard time attracting customers.

In terms of the offer of Chinese multibrand stores, as of 2015 less than 10 percent of stores were dedicated to local brands, with 45 percent dedicated to foreign ones and a further 25 percent featuring at least 75 percent foreign brands in their product range.

On the topic of the future of digital marketing, particularly for luxury brands, Pablo Mauron, China managing director and partner at Digital Luxury Group, emphasized the importance of Millennial consumers in the future of digital marketing content strategies, worldwide but particularly in China.

One important aspect of this pivot to Millennial is the embrace of ephemeral content, especially livestreaming. As Mauron explained, China’s online infrastructure already features more than 100 livestreaming apps and forward thinking brands, including Maybelline and Montblanc, have embraced livestreaming events in China in conjunction with celebrities and other key opinion leaders.

As for the role of virtual reality as a part of digital campaign strategies in China and beyond, Mauron pointed to the strong interest in the technology in China (300,000 VR headsets are reportedly sold on Alibaba’s Taobao platform every month) though he was also quick to say that it’s too early to talk about the best practices for brands to work with this technology, as it’s very much a work in progress.

“The technology is evolving and that brings opportunities for brands, but in terms of meaningful experiences, for the moment, we haven’t seen much,” Mauron said. “For the moment the VR-related activities are more around the innovation-slash-novelty aspects of the technology.” In the future, Swarovski will look to take the innovation forum on the road, with Dubai or elsewhere in the Middle East a likely next step, and Japan and Korea also in mind for similar events in coming years.

Originally published in Women’s Wear Daily.