Chic Shanghai: China’s doors have opened but localisation is top priority

From early January of this year, the Chinese government began dismantling its restrictions on foreign visitors, first authorising business-related entries and later widening its scope to include tourists. It marked a significant step for the country, opening up its borders for unrestricted entry for the first time again since the beginning of the pandemic – though a PCR test is still required. It also brought a sense of relief to fashion businesses both inside and outside of the region, as international supply chains could start rebuilding their operations with fewer obstacles to overcome.

Events are also now able to take place, with one of the first for the fashion industry this year being China International Fashion Fair (CHIC) Shanghai. Now in its 30th edition, its edition at the end of March was the first to take place in its full capacity since 2019, after its 2021 edition took on a compact format while others were cancelled due to tightened measures. In order to extend its availability, the fair postponed its dates to March 28 to 30 so international visitors could have more time to apply for entry.

And it appears its return did not go unnoticed. On entering the venue, lengthy queues of people snaked around the entrance of its home in the National Exhibition and Convention Centre, while hordes continued to descend on the venue from the surrounding area. It must be noted that the fair shared its location and dates with another fair, InterTextiles, yet its area still spanned an expansive 117,200 square metre space, spread over five separate halls. A large quantity of visitors were seemingly there specifically for CHIC, as the rows of over 1,200 exhibitors remained brimming with people over its three days. In fact, according to reported figures, the number of attendees even surpassed that of pre-pandemic levels, with over 148,983 people descending on the event over its duration – nearly 48 percent more than CHIC’s March 2019 show. Those attending were also a very mixed bag, ranging from buyers, retailers and department stores, to those simply curious about the fair and fashion in general.

Domestic brands stay close to home, internationals attempt a return

For many domestic brands, the option of going international is not yet on the cards due to continuously increasing export costs and legislative issues. Like countries across the globe, the impact of the pandemic has forced China to focus its attention inwards, with localisation being an important factor as the industry looks towards recovery. This element has also led to brands taking on a close-to-home mindset as they scramble to cut costs and support their local economy. This rang true for knitwear brand WGMX, which – pre-pandemic – had its sights set on international expansion, however has now shifted to be predominantly China-focused. “Before the pandemic, we were invited to show in Paris,” said Ivan, one of the brand’s designers, in a conversation with FashionUnited. “Now, it is not that we would turn an international offer down, but because of cost and time we just want to focus on the domestic market. Going elsewhere is just not convenient right now.”

This mindset was something the organisers of CHIC were acutely aware of going into the preparation for the event. When asked about this emphasis on domestic trade, Chen Dapeng, the president of China National Garment Association (CNGA) and of CHIC, said: “Fashion should be diversified, but local brands are strongly present in this edition due to the large demand for localisation. The Chinese government is paying a lot of attention to the development of its manufacturing industry, and local governments want to promote their local garment industry. Consumption also requires local brands.”

Another brand closer to home, looking to secure a bigger foothold in China is East Pole. The Hong Kong-based, unisex outerwear brand was founded by Leo Lo in 1984 and currently operates in around 35 countries. For Lo, one of the purposes of coming to this fair was not only to make deals with potential retailers and department stores, but also to find a potential business partner in the region to help in the company’s expansion and ensure its future success. His products are centred around functionality and longevity, two qualities that he also carries into his business practice. However, despite his enthusiasm, Lo still expressed his struggles over the past years, largely due to missing out on other international trade shows, such as Première Vision, for which East Pole was a regular attendee.

“Business has been terrible,” he noted. “Even in Europe, we struggled with cancellations and supply chain issues. Our orders went down and we slowed our production. But I will say that I didn’t let anyone go. We still have over 300 employees. We just had to keep positive.” While admitting his struggles, Lo did add that his experience at this edition of CHIC had been quite constructive, with his unique, well-decorated stand attracting many visitors, including a local news platform. Next to finding a partner, Lo was also hoping to set up business relationships with department stores, which he said had been showing up at his stand throughout the event. “Ultimately, my mission in China is to become a well-recognised outerwear brand, on the same level as Stone Island,” Lo concluded. “I just need the right person, with the same values as me, to achieve this with.”

Meanwhile, despite the event’s limited turnout of exhibitors from abroad – notably only seven ended up showing individually, largely down to the short time frame between the borders opening and the event itself – those who were attending were very enthusiastic about returning to China or entering for the first time. For Californian accessories label Bravo, the only US brand in attendance, CHIC was mainly about regaining momentum. Ran by husband and wife duo Terry Smith and Leah Quio Zhang, the brand produces a range of printed handbags, purses and sunglasses that utilise enamel coating created by a US manufacturer. It isn’t the first time Smith is trying to make his mark on the Chinese market. Prior to the pandemic, the businessman was working with over 100 retail stores and a series of online marketplaces in the region. However, once restrictions fell into place, all these partnerships ultimately fell through, turning China from Bravo’s biggest market into a nonexistent one. “We used to have a team in China and held our stock in a factory in Shenzhen, but we had to move everything back to the US, which was extremely costly and time consuming,” Smith added.

Through CHIC, he was hoping to appeal to boutiques, retailers and more, in order to reestablish his foothold in the market, putting his faith in his “high quality, affordable bags” that he suspected would appeal to Chinese buyers looking for low-cost yet resistant pieces. At the stands, Smith said that he found visitors were not specifically seeking international clients. In his opinion, the most effective place for deals was the fair’s Matchmaking meetings, which allowed visitors to speak with exhibitors one-and-one – a set up Smith said was more efficient for business. Once CHIC wrapped, however, Smith said that his sights were now set elsewhere, with plans to also exhibit at the Shenzhen Gift Show in April, a trade event that he believes contrasts CHIC in terms of attendance. “Smaller and medium retailers are more likely to go to the Shenzhen Gift Show because it is local. They tend not to come to CHIC,” Smith noted. “Here, it is mostly larger retailers who want bigger quantities, but in Shenzhen, visitors are more likely to buy. Smaller retailers are our goal at the end of the day.”

Smith’s eye is also firmly planted on the travel retail market, of which he has already established a number of partnerships with certain companies and is preparing to set up more. However, while doors may be reopening in this sector, it is still one that can be tricky to enter. “In this market, these big companies want named brands only. I have tried to establish Bravo here for four years and have had to fail a lot,” Smith said, later adding that he had indeed struck a deal with a large Asian travel firm, which will see his products sold on 12 airlines.

Chinese consumers call for Parisian chic

Another international brand that was present at the event was Christina Paris, which was also in attendance in 2019. The label had specifically set out to attract store owners and buyers looking for French-style womenswear to add to their offerings. Its return to the fair falls in line with the rebound in demand for global brands among the Chinese market. “Due to the pandemic, we had to shift our focus towards Europe but now we have experienced that Chinese consumers are looking for these kinds of brands more and more,” said Angel Wong, commercial director of Christina.

In fact, a significant part of CHIC’s mission, next to supporting domestic labels, is to aid international brands in their entry into China. This was evident in a new concept the organisation presented for this season, Chic Showroom, which came as an extension of the boutique opened by the China World Exhibition in Beijing last November. The idea behind the initiative is to make it easier for international fashion brands to enter the often challenging Chinese market, with its first phase offering 10 premium brands from Italy and France, including Stella Forest and Ines de la Fressange. Its launch towards the end of China’s restrictions meant that the concept was not significantly impacted by the pandemic, and has therefore not had to deal with the aftershock of cancellations or supply chain issues. This has instead allowed the organisation to assess the demand for international brands linked to post-pandemic consumer behaviour. “Consumers are favouring brands from outside of China at the moment,” Georgia Yang, the operational director of CHIC Showroom, said. “They are looking for high quality and new styles.”

The multi-brand layout of CHIC Showroom has also drawn in contrasting customer groups, according to Yang, giving it an edge when it comes to generational and demographic differences. She added: “The great thing about operating multi-brand stores is that we can appeal to multiple consumer groups, while one brand may speak to working men, others target more experimental, younger consumers looking for new brands to wear. They want products that they can wear and love for a long time, that can also be combined with cultural elements of their clothing too.”

In the coming months, CHIC is hoping to extend this concept into an e-commerce and showroom setting, albeit not in a traditional format. The location will look to attract potential commercial partners interested in bringing these brands to their own retail destinations or multi-brand stores. Ultimately, its presence looks to serve the growing demand for overseas brands, as highlighted by CNGA’s Dapeng: “Before the pandemic, a French Pavilion was always at CHIC, however due to the pandemic, French brands were unable to participate onsite, so we chose the form of a showroom to serve these brands further. It serves both the business and also the customer. During CHIC, we have seen many buyers and consumers that are interested in international brands. There are agents and consumers from 3 Tier and 4 Tier cities showing a deep interest in the showroom and the brands it represents.”

Dapeng also noted that the organisation itself does encourage international brands to get involved in CHIC, but that they must gain an understanding of the market before they attempt to enter. He noted: “I suggest a brand attends and takes part in CHIC first, to know if it will be liked by our visitors. Online video meetings with buyers can also help to figure this out. Different countries have their own fashion attitude and culture. The core is to satisfy the market’s needs.”

Local production and digitalisation pushed to the forefront

Other new additions to CHIC Shanghai looked to further support China’s internal supply chains, reflected in areas entirely dedicated to domestic manufacturers, homegrown distributors and even entire provinces of China that were pushing their own brands and manufacturing facilities. PH Value was one area that held significant prominence this year, taking up almost half of one of the expansive halls. The area, centred around knitted clothing, initially operated as its own entity, the China International Knitting Fair, but has been incorporated into CHIC Shanghai to allow exhibitors to access a wider market.

Another newly expanded section was that of CHIC Tech, where a number of technology-based production, manufacturing and distribution firms were based. CLO was one of the more prominent tech exhibitors at CHIC, displaying a large-scale space that presented its growing variety of products, from its artificial intelligence (AI) powered fittings to its 3D clothing design software. It was the South Korean company’s second time at the fair, approaching two decades since it last exhibited in 2005 when it first entered the Chinese market. Since then, the firm has grown on an international scale, working with luxury brands, fast fashion retailers and educational institutions alike on digitising their production processes.

Like others, CLO is now hoping to cement its place in China. “During the pandemic it wasn’t the best time to scale, so this year we are trying again,” a director from CLO said. “We are hoping to build up our presence here, as consumers are also becoming more immersed in this technology too, so there is more demand for it now.” One of the company’s most notable offerings was its virtual fittings, where customers are able to complete an AI scan of their body in order to try on products online. Similar concepts could be seen at other stands, including Style3D and Haier Internet, where it was possible to play around with smart mirrors. The prominence of these features pointed at the rising consumer interest in such technologies.

Meanwhile, for other companies, digitalisation is something that has become imperative to their ongoing development. For Zhejiang Yongda Garments, a firm within an area dedicated to the Zhejiang Shaoxing manufacturing province, AI was also leading the way. A representative for the company spoke of the technology’s ability to create a more efficient production process, as it continues to experiment with how it can further utilise the tech to cut costs and meet demands. The type of products it produces, which are predominantly tie dye pieces, are specific to their factory, relating to another trend seen in China’s supply chain leaning towards specialised production methods, in place of mass production.

A similar mentality was present at Yao De, an agency centred around winter clothing production, whose presence at CHIC was focused on promoting the local manufacturing facilities and brands it houses under its operations. While some companies struggled in the pandemic, one of the heads of the firm said that it had faced little impact from the pandemic due to its premium positioning, noting: “Our operations had only reduced a little but because of our position with premium brands, the impact was small.” Now, the company has placed importance on conducting research into the seasonal clothing market, as it looks to grow its business among Chinese branding companies. “With all the shifting that has happened in the market, we want to know where is best to place our items now and what brands our clients are currently needing,” the director added.

These shifts are something that have been evident throughout the industry and have therefore been reflected within the event, as noted by CHIC Shanghai director, Chen Dapeng, who said: “In recent years, the garment industry has changed rapidly. First, a wide use of digital technology in production and marketing, among other things, have changed the industry’s form. And Chinese consumers are becoming more culturally confident. They are searching for cultural satisfaction in garment design. The sense of sustainable development and social responsibility is also more important for enterprises. Last but not least, online sales have also become 50 percent of the consumption for the fashion industry in China. In this CHIC edition, we made sure to establish our Tech area, Chinese style area and more to cater to these new trends.”

All of these aspects can be expected in the two upcoming editions of CHIC, which are set to take place between August 28 to 30 in Shanghai, and between November 6 to 9 in Shenzhen. Dapeng concluded: “We will still follow the concepts I mentioned. The fair should be the epitome of the industry, and our CNGA is there to support garment companies. Each season will feature different product styles, with 40 percent of spring exhibitors to join this autumn.”