Fashion After The Outbreak: A Special Report From Shanghai

April 27,2020

With the gradual stabilization of the COVID-19 epidemic in China, several fashion trade shows such as Not showroomShowroom Shanghai (时堂)Ontimeshow, and Tube Showroom (trade shows under the Shanghai Fashion Week), all gradually resumed operation in April.

Recently, Luxe.CO visited these four fashion trade shows in Shanghai and caught up with independent designers and buyers from different cities to understand the impact that the epidemic has had on their business status and future plans.

Exhibition Visitors Dropped Sharply, But Most Brands Gained New Customers

In order to control the flow of people, the exhibition periods of the four trade shows were extended. Not showroomOntimeshow, and Tube Showroom all adopted reservation systems. Although Showroom Shanghai continued to use a registration system, the exhibition was divided into two exhibition halls to effectively disperse the crowds and strengthen the safety and control work.

Due to quarantine policies, many brands could not make it to Shanghai to participate in the trade shows -- compared with the same period last year, all four trade shows were smaller in size, with between 25 to 30 brands showcased at each. However, the smaller scale also created a more focused business environment, with all four shows reporting more new customers. According to official data released by Showroom Shanghai, 1,049 buyers showed up during the five-day event, accounting for 53 percent of the total number of visitors, and the largest percentage of buyers ever. The buyers were mainly from East China, with buyers from the North and Middle Western regions absent. The many new buyers coming from Xinjiang, Anhui, Xi 'an, Yunnan, and Henan filled the regional gap for many brands.

Zhang Ying, Head of Not showroom, also said, “25 percent more buyers showed up than were booked, on top of 25 percent more reservations on those days. After the warm-up, everyone began to spread the news. We saw that the buyer side was also warming up, with a lot of ad-hoc decisions.” She observed that there were more buyers from Jiangsu, Zhejiang, Sichuan, Shenzhen, and Guangzhou than from the North, with the number of buyers from second- and third-tier cities also growing.

Although the outbreak has stabilized in China, most buyers are still cautious and the number of first-time orders for the same product has decreased. At the same time, because of the lockdown in Europe, many buyers who planned to go to Europe gave their overseas purchasing budget to domestic designer brands.

Designer brands such as MiCarsyAT-ONE-MENTSusan FangJarel ZhangSwaying/KnitYvmin (尤目), and CHENPENG partnered with more multi-brand boutiques during the trade shows.

For example, the number of multi-brand boutiques that cooperated with brand Swaying/Knit through these trade shows increased 30 percent. The brand founder said: "The number of orders actually grew because of the outbreak when compared with the previous quarter. It was quite unexpected, and we found that the buyers’ attitude was very positive. This time, 40 to 50 percent of the buyers ordered more summer collections." The brand manager of Susan Fang also said that although the buyers were cautious, they were also very bold. "There are about 10 multi-brand boutiques in the new partnership, all of which were bolder in choosing goods."

Multi-brand Boutiques: Maintain Existing Customers Closely, While Experimenting With Various Online Channels

Due to the outbreak, many shops closed in February and March, which affected the sales of many offline multi-brand boutiques. Many buyers are also worried about a repeat of the outbreak in the second half of the year, with some stores seeing their budgets drop by 30 to 50 percent.

AT-ONE-MENT's pavilion

Although many multi-brand boutiques actively expanded online channels during the epidemic period, promoting their products through WeChat, TikTok, and Xiaohongshu, the results were not satisfactory due to a lack of channel foundations and high product prices.

One buyer said: "Although we did live stream, the middle and high-end brands still have a small audience in small cities like Ganzhou -- most of our customers are still our existing customers. The purpose of this visit is to see if we can adjust the brand categories to add more brands and attract new consumers. Some items may also be priced around 10 to 30 percent lower."

A buyer from Xinxiang, Henan Province, said: "Since stores were closed during the outbreak, we switched to live streaming in order to maintain existing customers. We've tried short videos, in-store appointments, and so on, and the results were mediocre. A lot of people voiced concerns about whether the epidemic will repeat itself, indicating that consumer confidence is not very strong. In the future, we still hope to bring customers to our physical store to enhance the experience. Although we are not against being online, we still want to focus more on the offline consumer experience.

Through the epidemic, buyers are more aware of the importance of customer maintenance. At the same time, they also said that consumer shopping habits have changed. "Before, people liked to buy outerwear, but during the epidemic, many people chose to instead buy indoor clothing," said buyers from Nanjing.

Angel Chen's pavilion

While the outbreak has brought a great number of challenges, many new opportunities have emerged that are easier to capture for stores that already have a strong presence online.

The Hangzhou based multi-brand boutique T.B.C. opened an online live stream account before the outbreak began. Since the outbreak, they have been promoting goods on the TikTok live stream platform every day. Thanks to online streaming, sales in February increased compared with last year, while sales in March were relatively static. "We have tens of thousands of fans who have spent money online,” a buyer from T.B.C. said, “... before, we may not have been able to communicate with these consumers in close proximity… but during the live stream, we were able to answer their questions and get to know them better.”

Although the sales were good, T.B.C still made some adjustments to their selection due to the outbreak. “Normally the budget goes up every year, but this Autumn and Winter we maintained the same budget as last year. Previously, we placed many orders for a single brand, but now we place fewer orders across multiple brands to accommodate different online needs and styles of consumption. The breadth of our SKUs is now larger. This year, I saw a lot of designer brands coming out with slightly cheaper (1000-2000 yuan) pieces that meet the needs of a shrinking consumer budget, and I think they're trying to fit in with the market. Because of the epidemic, our budget is still conservative, so the quantity of the first order will not be too high. We hope the designers will use fewer imported fabrics, improve the delivery speed, and give us more support in the future.”

Designer Brands: Learned Many Lessons From The Epidemic

Due to the outbreak, a large number of domestic and foreign factories have shut down and stopped production, and many designer brands have encountered problems in fabric supply and clothing production. This experience has given the brands a deep understanding that they need to be prepared for everything in the future. “We were thinking to prepare the new collections before the outbreak,” said Li Min, Co-founder of Yvmin(尤目), “And this became even more important after we went through the outbreak.”

Due to a factory shut down in Italy, certain required fabrics could not be produced in time, and time spent in transportation and customs clearance was also prolonged. In the end, it meant that the brand AT-ONE-MENT had no choice but to cancel all the clothes with a specific fabric. For the same reason, brand Jarel Zhang has to manufacture 2 or 3 categories of clothes with alternative fabrics as samples for this trade show.

To avoid this kind of emergency happening again, Wanbing Huang, the founder and designer of AT-ONE-MENT said, "In the future, I will more or less prepare some inventory before each season starts, and I will also prepare a few more accessories. This time, I learned that there should always be a Plan B."

Susan Fang's booth

To better communicate with consumers during the outbreak, many brands have focused more on online channels, starting live streaming events or opening Taobao stores. For example, on March 30, the brand Angel Chen Taobao shop officially opened. Brand CHENPENG set up its Taobao store in just two weeks, and some of its most popular styles from the past season have hit the shelves. “When something unexpected happens, we should not stop, but actively expand new channels for future development. Before, we may have considered opening more shops in Tmall and Taobao. However, due to the epidemic, the TikTok, Xiaohongshu, and Kuaishou platforms have gradually transformed into platforms to promote consumption through entertainment. I also started my own TikTok account during this period, and usually post some entertaining short videos.”

Although the outbreak of the epidemic has brought great challenges to designer brands, it has also given them time to slow down, and seriously think about the healthy development of their brands, and pay more attention to the core pillars of brand management.

| Editor: Maier


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