November in southern China is shaping up to be a tale of two cities.
At the start of the month, fashion insiders gathered in Shenzhen for the re-staging of Chanel’s latest cruise show. On Nov. 30, they’ll gather again for Louis Vuitton, this time in Hong Kong — across the border in China’s special administrative region but just 15 minutes away by high-speed rail — to see Pharrell unveil his second menswear collection on the city’s Avenue of Stars. The spectacle will be held in partnership with local tycoon Adrian Cheng, who owns the K11 Musea mall that sits beside the attraction.
Until recently, few brands staged local activations in Shenzhen, calculating that the city’s wealthy could easily visit nearby Hong Kong or Guangzhou to shop. But three years of Covid restrictions, which put Hong Kong off-limits for mainland Chinese, and Shenzhen’s growing tech wealth, have made the city more important to brands.
At the same time, Hong Kong’s image and economy have both suffered from the squashing of pro-democracy protests by Beijing’s contentious national security law and three years of population decline, including a wave of locals moving permanently overseas and the departure of more expatriate talent.
And yet Vuitton is betting on Hong Kong for its next menswear extravaganza. Announcing the show, the brand described the city as “cosmopolitan and vibrant” and “a melting pot of East and West that has given rise to a thriving metropolis of art, culture and industry.”
But apart from the unique setting Hong Kong provides, there are also clear commercial motives at play. Luxury is highly exposed to key global cities: the world’s top ten fashion capitals account for roughly one-fifth of all luxury points of sale. And not long ago, Hong Kong alone was responsible for more than five percent of global luxury sales, according to analysts, putting its importance up there with Paris.
Those days may be gone, but the city remains critical to the luxury retail sector. Citing Euromonitor data, the South China Morning Post reported in August that Hong Kong had regained its spot as the global market with the highest per capita expenditure on luxury goods, beating Switzerland and the United Arab Emirates.
“I honestly think that Hong Kong probably needs a better PR person,” said Kevin Poon, the Hong Kong-born serial entrepreneur behind streetwear brand Clot and retailer Juice. “It’s one of the most underrated cities right now. There’s a lot of sophisticated customers in Hong Kong.”
The city’s seven million inhabitants include a powerful and savvy clientele that’s up to speed on the latest trends. As third- and fourth-generation luxury buyers, many Hong Kong shoppers have had local access to big brands for far longer than their counterparts in the mainland. Nurturing those valuable client relationships will be top of mind for brand executives who have been absent during the pandemic.
The last major event Louis Vuitton hosted in Hong Kong was an exhibition in 2017. By putting on a big show now, the brand can refresh its relationship with local VIP clients and pay tribute to their hometown notwithstanding the city’s recent troubles.
Though it has lost some of its lustre, Hong Kong also remains a key travel destination, attracting affluent visitors from across Asia and further afield. Louis Vuitton’s closure of a store in Causeway Bay’s Times Square mall in 2020, at the height of the city’s protests, generated plenty of hand-wringing headlines about its future. But less publicised was the 2022 opening of a large duplex store in Hong Kong’s airport, part of a wider push by parent LVMH to leverage the city to target international tourism.
Tellingly, K11 Musea-owner Cheng has also cast a vote for Hong Kong’s resilience as a travel hub. His next development, 11 Skies, is a massive $2.6 billion “retailtainment” property next to the airport. Its first phase opened in July, enabling the public to get a glimpse of what one fashion insider’s bet is for the future of Hong Kong.
Source : BusinessOfFashion