What Can China's First Lady Tell Us?


The first lady of China, Peng Liyuan, set off a frenzy of sorts in China as she accompanies her husband on a diplomatic tour in Africa.  She dazzled the population domestic and abroad with her fashionable modern attires, her confidence, elegance and beauty - a sharp contrast to her predecessors.  Even western media caught the sensation and compares her to Michelle Obama.

 

The biggest news is that all attires Peng Liyuan wears on this tour are designed and made in China by domestic Chinese brands.  In a land where western luxury brands have become the stable accessories for the powerful, the wealthy and the aspiring middle class, her use of domestic brands struck a strong nerve with the Chinese.  There are high praises for her “wearing Chinese”, amidst the dominant trend of corrupt officials and the wealthy prefer western luxury brand names.  As a result, even domestic clothing brands have shot up in the stock market.

If you are a foreign company operating in China, what are some of the things you can learn from this?

1.     Demand for Style

As luck would have it, China has a “first lady” at an opportune time when the country is rising as an economic and political power in the world.  Peng Liyuan represents a role model that the Chinese people aspire to be and be seen as.  Successful - Peng is a highly celebrated folk song singer for decades and was widely popular long before the common

person knows who Xi Jinping (the President) is.  Stylish - Peng is an artist with style, elegance and natural beauty that are simply blessed to only the few among us.  Modern - Peng is confident, outgoing and whose fashion taste is modern fused with traditional Chinese elements. 

As the middle class in China expands, there will be increasing demands for products that people can use to demonstrate their own style, fashion sense and artistic expressions.  Anything that can potentially help one project the image of being successful, stylish and modern has a good chance to succeed.  If you can succeed in adding a well - combined Chinese twist to it, then all the better. 


2.     Stronger Domestic Competition

The Chinese fashion industry itself is in a nascent stage and no one quite expects the Peng Liyuan effect can turn all wealthy Chinese to purchasing Chinese brands any time soon.  But taking a cue from this event, there is a wider trend of the government taking on a higher priority to strengthen domestic industries.  From automobile to steel to shipping to IT, more regulations are being put in place in an effort to give the domestic players a better chance to survive and hopefully thrive.  Foreign companies are increasingly feeling the pressure that the Chinese market has become more competitive.   In order to succeed, foreign brands can no longer rely on its brand prestige, but must have a thorough understanding of the fragmented market place, the lack of loyalty to any brand, and compete with a portfolio and approach that suits the different segments/regions of the market.

 

As a historically agricultural society, China is predominantly inward looking and risk-averse in its worldview and approach.  Relying on foreign companies to provide for its people is perceived as a high risk to its own survival and prosperity.  So such “protectionist” moves are only true to its culture and comfort level.  As a member of the WTO, meanwhile, China’s challenge is to balance such risk-averse approach to compliance with international standards to allow fair play for everyone.

 

3.     Quality Still Sells

While the country was elated by Peng Liyuan’s all Chinese stylish outfits, one influential bloggers points out: “Peng’s clothes are custom-made and are not for mass market consumption...We can only say Chinese brands have its own place when common people can purchase the same quality and style clothes as Peng.”

 

Quality and creativity remain two big hurdles that Chinese branded products need to overcome.  Until domestic brands can compete head-to-head with the western brands in these regards, in a culture where image projection to the public is of paramount importance, few successful and modern Chinese would want to sacrifice them for their nationalistic sentiments.   In the short term, this bodes well for the western brands.  But if we can be certain of anything, that would be China is not standing still.  It moves on continuously at a rapid pace and one must keep reinventing itself to stay relevant and competitive in this market.  

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