China Pulse by Fabernovel - September 2023

CLIENT STORIES

BIEM.L.FDLKK: A Chinese fashion group going global

Biem.L.Fdlkk has been a trailblazer in the Chinese golf clothing market since its establishment in 2003. This year marked a milestone with the acquisition of French fashion label Cerruti 1881 and British menswear brand Kent & Curwen from Trinity Group. Biem operates 1,100 stores in China and is on his way to premiumize his offering and to transform itself as an established international fashion player.

In that context, Fabernovel was selected as Biem's lead branding agency to redesign the company’s brand book. Fabernovel is also supporting the Chinese brand through brand crossover opportunities with foreign luxury brands to strategically reposition its value proposition to discerning and affluent consumers.

>>>Contact our marketing specialists for building your brand with us

PORSCHE, CARTIER & FABERNOVEL: Decoding China luxury trends

In recent years, luxury consumers' mindset and behavior have dramatically evolved with more sophisticated choices and preferences. Consumers are increasingly seeking value-adding services including personalization, product customization or immersive experiences but also brands with cultural relevance and prioritizing environmental responsibility. 

In this context, Fabernovel and Cartier were invited by Porsche to participate in an industry sharing session, to delve into the dynamic landscape of China's consumer experience and tech innovations.

Fabernovel, emphasized three key convictions.

China's Transition to Luxury Market Leader

China is rapidly evolving from being a latecomer to the global luxury market to becoming a trendsetter. This transformation is evident not only in terms of market size but also in terms of sophistication in areas such as retail experience, services, and clienteling. This indicates that Chinese luxury consumers are not only interested in luxury products but also value the overall experience and services associated with them.

Reshoring of Luxury Consumption

It's noted that a significant portion of China's luxury consumption may remain domestically focused, with estimates suggesting that around 60-65% of luxury consumption may "stick" in China. Several factors contribute to this trend, including the enhancement of domestic luxury experiences, the use of AI and digital technologies to provide personalized services, government incentives like those in Hainan, and efforts to reduce price gaps between domestic and cross-border purchases. This suggests that Chinese consumers are increasingly finding reasons to buy luxury products within their own country.

Emergence of Chinese Luxury Brands

While Western luxury brands are currently favored by Chinese consumers, the prediction is that major Chinese luxury brands will eventually emerge as global brands. This implies that Chinese luxury brands are not only gaining recognition within China but are also positioning themselves to compete on a global scale. Factors such as cultural relevance and environmental responsibility are likely to play a role in the success of these brands.

>>>Contact our research team for more insights about the China market

LEARNING EXPEDITION IN THE GREATER BAY AREA: Back on the field to discover the Greater Bay Area

The Greater Bay Area (GBA) is a mega-region that is progressively integrating and revamping nine major cities within the Pearl River Delta, plus two special administrative regions - Hong Kong and Macao - into a single globally competitor on par with existing leading city clusters. 

Last month Fabernovel crafted a tailor-made learning expedition (LX) for a leading cosmetic group to offer insights into China’s digital ecosystem, technology advancement, innovative retail practices and luxury consumer/traveler behaviors. Through a blend of expert presentations, company visits and field visits, we empowered the 20 participants with inspiring and actionable knowledge. 

One of the highlights was a company visit of Shenzhen's tech giant Tencent. During the tour participants were taken to an immersive playground showcasing Tencent technologies and solutions. Tencent also introduced its large ecosystem and specific case studies around smart retail and traveler engagement.

This learning expedition also encompassed field trips to Shenzhen’s trendsetting retail destinations. These visits enabled participants to witness the latest consumer behaviors and technology innovations in retail, such as Burberry x Tencent social retail store and Shu Uemura's first China Flagship store.

>>> Plan your learning expedition with us

BREITLING: A conversation with Antonio Carriero, Chief Digital & Technology Officer

Antonio Carriero, Chief Digital & Technology Officer of Breitling, is a Digital Business and IT team builder with more than 20 years of experience and practice across industries. Antonio is passionate about creating a compelling digital vision, coordinating digital investments, driving appropriate synergies and building a clean technology platform bridging on- and off-line capabilities.

Last month, Fabernovel had the privilege to sit down with Antonio in Shanghai and to get his insights about the ever-evolving China Market. Below is an excerpt from our conversation.

1. What digital innovation holds the greatest potential for causing significant disruption in the watch industry?Unlike the automotive industry – where not only the product (the car) has been disrupted (electric autonomous vehicle) but the entire value chain and the unique concept of mobility has been transformed – the most visible impact of digital innovation on the watch industry is in the distribution and the customer engagement. Of course, I don’t forget connected watches, but I still believe the real change impacting the industry is the way we sell watches, not the watch itself. Digitally savvy over-connected customers engage with brands in totally different ways, and they expect brands to understand the way their lives have been changing after 25 years of digital. Channels do not exist for customers. Probably we can still decide the watches we want to produce, but not the way we sell them. Digital technology capabilities augment Sales Staff to engage beyond channels and time with customers and prospects. Intelligent data processing – let’s avoid for once the AI buzzword – injected real-time into any digital experience (website, apps but also in the tools that are available to the Sales Staff) helps in getting closer to the customer, proposing not only the right product at the right time, but also the right call to action, with the right tone of voice. Digital innovation – for example blockchain activation – would empower pre-owned watches platforms, supporting both B2C and C2C business model, providing a unique level of authenticity and security, transactional capabilities, transparency and the required level of anonymity. 
2. Now that you have returned to traveling in China, what has caught your eye the most regarding how the market has evolved since the onset of the pandemic?Once again China surprised me. This unique capability to accelerate always. New malls and shopping centers, an increased density of luxury boutiques. But not only the replica of the existing ones overseas. New concept, innovative concept with the perfect combination of heritage and unique experience to capture the tension of the local clientele. On the digital front, the shift from one platform to the other, with the acceleration of the new ones in terms of customers affiliation and sales. The landscape is changing so fast that brands risk falling to the side if they are not capable of adapting and investing rapidly. Test and learn, all the time.
3. What advice would you offer to hard luxury brands looking to expand their presence and operations in the Chinese market?Hurry up! Don’t wait for the best moment. That moment doesn’t exist anymore. Jump on the wagon, be Agile in the build, and specific to the local clientele. The market is getting very crowded, big players are taking control, and competition – also on the digital front – is tougher than before the pandemic. Especially for luxury brands. More specifically for Digital, it is important to understand how diverse is the landscape in China and how different are customer journeys across platforms. Each of them needs specific CTA and content (video). Be prepared to become an entertainment digital brand that sells products, from time to time!

NEWS & EVENTS

REBOOTING THE FUTURE: Fabernovel invited to the S-Tron Shanghai event

Last September 9,500 investors, startups, entrepreneurs and changemakers regrouped at the S-Tron Shanghai Innovation Conference to share their thoughts and ideas about upcoming disruptive technologies and trends.

Patrice Nordey, Managing Partner of Fabernovel, was invited to share his insights on two different panel discussions. A fireside chat about corporate and startups innovating in the field of Artificial Intelligence, together with co-panelist Oscar Ramos (Managing Director of the venture capital firm Orbit Startups) and Scott Pollack 庞国治 (veteran CEO and startup coach). And an “Art and Technology” panel discussion with Wang Carmen (founder of ARTECH), Yizhou Zheng (the very first employee of Stability AI.ai in China), Dana Leong (award winning Grammy Artist) and Alex Lu (former global partner at Simon-Kucher).

Overall, a fantastic energy and vibe where Fabernovel also connected with many interesting Chinese startups in the fields of AIGC, LLM, prompting tools, Green Energies, healthcare and enterprise analytics.

>>> Contact us to know more about China innovation

LARGE LANGUAGE MODELS: Fabernovel guest partner at the Huawei Connect 2023 conference

Just a few days after having revealed to the world its very first smartphone equipped with a full-Chinese manufactured 7 nanometre (nm) technology chip, Huawei demonstrated its strong comeback to the front scene with its yearly summit in Shanghai.

Fabernovel was invited as a guest partner to attend the keynote presentations in the huge conference hall filled with over 800 attendees and showcasing Huawei’s announcements on gigantic screens.

We were especially impressed by the Pangu Models presented by Zhang Ping'an, CEO of Huawei Cloud. It has 1.085 trillion parameters, making it one of the largest LLMs in the world. Compared to ChatGPT which is very horizontal, the Pangu LLM has strong industry verticals (weather forecast, medical, finance, transportation…) and over 400 scenario-based applications. 

The exhibition hall was showcasing additional tech and AI related solutions such as Smart Retail, e-Commerce as well as the “Huawei Meta Studio '' for creative industries based in Nanjing.

Thanks to the Huawei team for partnering with Fabernovel and opening your impressive ecosystem to us and to our clients.

LIFE @FABERNOVEL

MANAGEMENT TRAINING: Cultivating the leadership excellence @Fabernovel

Fabernovel, as a leading innovation agency, encourages a learning culture. 

We recently organized a Leadership Training series for our emerging leaders and senior leaders, which covered the crucial methodologies of leading ourselves, leading the team, and leading organization. With knowing each other's leadership styles (DiSC) we foresee a more efficient communication environment and a better equipped leadership to fulfill consistent success.

To deliver this training, Fabernovel invited Mr John Dorris, Founding Associate & Chief Culture Officer of Sino Associates who previously worked with our team. We benefited from his 15 experience working with leaders from GE, HSBC, Goldman Sachs and Alibaba among others.

China Pulse by FABERNOVEL - September 2023

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