To Appeal to Customers Back Home, Chinese Fast Fashion Launches in London

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As China’s inexorable rise as an economic power gains momentum, nearly every industry is changing to reflect the increased cache of Chinese companies. Manufacturing, tech, transportation, and clean energy: The country has quickly taken a dominant position in nearly every sector.

Fashion, however, remains an exception. Even as the country’s buying power grows — by 2030, China will be the world’s largest apparel market, propelled by middle-class and upper-class households with a taste for luxury — Chinese tastes trend toward established international brands, hindering the growth of homegrown brands.

This lack of global cache makes the upcoming London expansion of Chinese fast-fashion brand Urban Revivo a potential sea change. A Zara competitor with more than 200 stores in China, UR, as it’s known at home, has a splashy opening planned for March, a 22,000-square-foot flagship in the expanding Westfield London shopping center. The company’s second international location, after an opening in a Singapore mall last year, may signal that Chinese brands are ready to meet Western consumers on their own turf. Can the country’s nascent fashion industry produce a truly global brand?

Maybe the better question is, what if they don’t care about the answer, and Western consumers aren’t the intended audience? Maybe, with China’s growing wealth and market share, a Chinese company can “go global” simply by appealing to its own consumers.

“This opening isn’t about conditions outside of China,” says Casey Hall, a Shanghai-based writer who covers fashion for publications such as WWD. “This is about conditions inside.”

Divining Urban Revivo’s motives proved difficult when representatives declined repeated requests to comment for this story. But discussing the store opening with retail analysts in China, the US, and the UK suggests the brand’s expansion, a sign of international ambition, should, more importantly, also be viewed as a sign of how the Chinese market is evolving.

Chinese consumers are predicted to spend $500 billion on fashion and footwear in 2018, according to PricewaterhouseCoopers. In addition, L2’s Luxury China report found that Chinese shoppers represent 30 percent of the global market for luxury goods, but domestic spending only accounts for 7 percent of the total market. The difference comes from overseas shopping by wealthy Chinese consumers.

UR’s London store may simply be an indirect route to the largest market in the world. It offers mobile consumers a new outlet, and helps send the message home that UR is a brand to watch and covet.

Founded in 2006, by Li Mingguang, who was inspired by a visit to a Zara store in Japan, Urban Revivo has become a $450 million-a-year brand that claims to launch more than 20,000 new products annually. Seeking to create an “international fashion empire” by focusing on “quality fabrics, good cuts, and up-to-date styles inspired by European design,” as company vice president Raymond Ngoh told the Straits Times, UR is making an initial foray into London, part of a larger plan to expand to 400-plus locations worldwide.

UR’s aggressive roadmap may be surprising, since it’s far from a dominant, household name in China. But that actually might make overseas expansion easier, since Chinese consumers perhaps don’t have as strong an impression of the mid-market brand.

Massive shifts at home have made it harder to reach the multifaceted Chinese consumer. They’re global — more than 120 million travel overseas every day — and increasingly sophisticated, meaning that those in smaller, formerly second-tier cities are, through economic expansion and e-commerce, suddenly much more attuned to larger trends.

Urban Revivo, in trying to put itself on the same pedestal as international brands like Zara, may simply be engaging in a elaborate bid for credibility with increasingly empowered, and informed, shoppers back home.

“Before, a brand like UR could just put anything out there, and people in some of these smaller cities, without more access, would buy it,” says Hall. “Prior to 2012, they could have expanded in China and focused on those post-’90s kids with lots of money and not a lot of options. But over the last five years, the retail ecosystem has dramatically shifted. Now, maybe the best place to reach them isn’t on the main street in a Chinese city. It’s about giving yourself cachet as an international brand.”

Liz Flora, Asia-Pacific Editor at L2, a New York-based business intelligence firm, says Western brands remain dominant in the Chinese market. UR represents a mid-range, slightly boutique, middle-class brand, somewhat like Mango, associated with the growing class of young professionals founder Mingguang initially meant to target. According to the company’s latest Luxury China report from last May, which found that the country’s luxury market grew 4 percent in 2016, Western brands still dominate social media and digital channels, including homegrown Chinese networks and search engines such as Weibo, WeChat, and Baidu. Even other Asian brands tend to have better brand awareness than homegrown companies.

“Korean brands and Korean beauty is huge in China,” Flora says. “Japan has a very established fashion market, and a huge global beauty market. It’s inevitable China will get there. It’s just at a much earlier stage right now.”

Some analysts have suggested that Chinese brands need to follow the Japanese model of the ’70s and ’80s, where rising design talent like Yohji Yamamoto studied from masters in Europe, rode their country’s economic boom, and eventually developed their own style.

Many believe the country’s fashion designers are right on the cusp of this kind of increased global recognition. According to Timothy Parent, the founder of China Fashion Bloggers, the industry has taken a huge leap forward in less than a decade. In 2009, Chinese labels were nonexistent. Just a handful of domestic designers were carried in stores, most customers weren’t interested in Chinese brands, and there was no sense of nationalism and pride.

Fashion in China has “exploded” in the last few years, Parent explains. Shanghai Fashion Week supports numerous designers, who have established a road for others to follow. Uma Wang has shown in Paris; international retailers such as Lane Crawford and Opening Ceremony are picking up others, such as Renli Su and Shushu/Tong; and Shang Xia, the Hermès-backed brand focused on Chinese craftsmanship, is “like a Chinese FUBU.”

“These brands are completely changing the perception of what ‘Made in China’ means,” Parent says. “And I don’t think they’re aiming for purely Chinese customers. Taste and aesthetics are more international. UR will speak to people who love their aesthetic around the world.”

The true challenge of succeeding in Europe may be making the kinds of minute adaptations to local taste that have allowed similar fast-fashion companies to succeed (which may explain why the company hired a former buyer from rival brand Topshop last year).

“H&M and Zara have been doing this for years, and they know the environment and the subtle differences in customer demographics,” says Karl McKeever, a retail analyst and director of retail agency Visual Thinking. “UR knows the differences and fashion trends in China. But fine-tuning the offering in another country is difficult and takes time.”

UR wouldn’t be the first Chinese brand to try to expand overseas, or even the first to do so in London. Bosideng International Holdings Ltd. (the name is a transliteration of “Boston”), a company that manufactures high-end down jackets for companies such as Adidas and makes roughly $1.3 billion annually, tried to launch its own line with a huge push, vertical integration, and flashy new stores in London and New York in 2012. The efforts failed, and the stores shuttered in 2016. Chan Wai-Chan, a retail partner at consultancy Oliver Wyman in Hong Kong, told Bloomberg that it was due to lack of storytelling and presence.

“I would hesitate to call Bosideng a brand,” he said. “They had a fantastic location in London, but when people walk by, they ask, ‘What’s the story? What’s this about?’”

If UR is indeed expanding globally to reinforce and strengthen its position at home, London, a global travel hub, is a good start. According to McKeever, the choice of a mall, as opposed to a stand-alone store on Oxford Street, wasn’t the most prestigious location, as far as discerning shoppers are concerned. But for the real audience back home, it might be perfect.

“These stores can become brand ambassadors,” he says. “One shot of any celebrity coming in there is worth their weight in PR gold.”