By Lee Folland
Timed this year to coincide with the China International Import Exhibition (CIIE), Shanghai’s central commercial district Jing’an held the 11th Forbes China Jing’an Nanjing Road Forum on November the 7th, entitled ‘The Development of Business District Under a New and Open Structure’.
Chloe Reuter, CEO of Reuter Communications and co-Founder of The Luxury Conversation, spoke at the event alongside government officials, businesses and representatives from leading business districts around the world.
Revitalisation from back to front
West Nanjing Road has the highest density of high-end brands in all of Shanghai, a metropolis of around 24 million people. The strip is home to retail destinations with over 1,800 foreign brands and reported 25% growth from January to September this year, according to Lu Xiaodong, Chief of the CPC Jing’An District Committee and Governor of the People’s Government of Jing’an District.
The forum explored how to continue to develop the road as a global business district, with top people from Paris’ Champs-Elysees, Milan’s Monte Napoleono, London’s Regent Street and St. James’ Street, and Singapore’s Orchard Road at the event to give their expertise and ideas.
Roland Berger CEO Jiang Hao shared some trends seen at business districts globally, with a stand-out point being backstreets; other major business districts around the world have been focusing on using the streets that sit just behind the main strip as ripe for development, in terms of each having its own theme and cultural highlight. While the main commercial streets carry the heavy-weight big names and commercial features, backstreets should ideally represent a more authentic native culture, from food and entertainment to locally-distinct shopping itself.
Tips for Chinese brands looking to internationalise
Carlo Capasa, the Chairman of Camera Nazionale Della Moda Italiana, brought his observations of the Italian fashion industry’s success to reflect on what it takes for Chinese fashion brands to become truly international.
Traceability and social sustainability: Consumers globally are increasingly demanding transparency when it comes to their purchases, from understanding the labour conditions at the garment factory where their shirt was assembled to the corporate social responsibility programs of their favourite jewelry designer.
Design and lifestyle: According to Carlo, creativity is based on four pillars of culture, history, innovation and authenticity. Without all four, true design is hard to foster.
Quality, innovation and sustainability: The success of the ‘Made in Italy’ brand can partly be attributed to the strict control of the entire production chain of Italian fashion goods. This control helps ensure that products meet the high-quality standards expected by consumers, seek innovation (be it new materials or techniques), and have sustainable business models.
International communication: International brands must be able to communicate beyond their own borders using the channels and language appropriate for each international market.
International distribution: As Carlo put it, there is little point showing at the Milan Fashion Week if you do not have your distribution in Italy figured out.
Leveraging technology to attract the customer
Jill Sinclair, the representative from Regent Street and St. James’s Street in London, talked about how her district aims to take visitors “on a voyage of discovery.” She sees technology as not only enabling connectivity, but also loyalty between visitors and the district. However, without engaging content, even the most advanced technology can fall short of increasing ‘dwelling time’ and interest from visitors.
Singapore’s Orchard Road has engaged a communications agency in China to handle its Chinese social media presence to ensure messaging and content about Singapore, and particularly Orchard Road, is approached from a perspective that truly resonates with the Chinese consumer.
Edouard Lefebvre, the Managing Director of Comite Champs-Elysees, shared how the Parisian district leverages various data sources from free WI-FI hotspots to traffic monitoring to storing visitor frequency parameters, allowing strategic enhancement of the attractiveness and competitiveness of Champs-Elysees.
Indeed, he said, the district has evolved over time to have “less space for cars and more space for people. Champs-Elysees is becoming more experiential with shows and events, while 20 years ago it was raw shopping.”
It all starts with complete understanding of your customer
The forum made it clear that from the revitalisation of West Nanjing Road to developing winning individual luxury brands, strategy must be centered around deep customer insight.
Tommaso Cancellara of MICAM Milano, the industry body representing 600 top Italian footwear manufacturers, talked about the Chinese luxury consumer being among the most sophisticated globally. Brands looking to claim their share of the market must do their homework – understand local design aesthetics, but also variations in physiology with footwear a great case in point as the typical shapes and sizes of feet differ between Italy and China.
Reuter Communications’ Founder Chloe Reuter echoed the importance of understanding the Chinese consumer if brands want to succeed in China. “Niche is where the luxury market in China is heading. So many consumers are open to exploring new brands. It’s niche beauty, niche hospitality and niche fashion; that’s what we are seeing increasingly on the ground here in China.’”
In terms of retail destinations, the typical visitor consideration factors include safety, ease of getting there and ample choice (activities, stores and brands), according to CITIC Capital’s Stanley Ching – and as Chloe Reuter added, beyond these basic factors to attract the Chinese visitor, destinations need to heavily leverage digital capabilities and offer seamless online to offline to online (O2O2O) experiences: “As most Chinese consumers know what they want to buy before stepping into the store, the battle for the share of their wallet begins online.”
Chloe followed on to offer various examples of how luxury brands are successfully leveraging digital, from the chocolatier Pierre Marcolini’s WeChat games with vouchers valid at offline stores to Chanel’s “COCO Game Center” pop-ups. “WeChat really is the one application Chinese people can’t live without, so your brand needs to use it to its full and astonishing capability.”