Five Lessons for the Chinese Fashion Industry from the French
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Five Lessons for the Chinese Fashion Industry from the French By Stéphane J.G. Girod Point of View January 2012
Five Lessons for the Chinese Fashion Industry from the French The young Chinese fashion industry has generated plenty of hype. But the industry may not necessarily be heading for success. Its most pressing challenge? To establish legitimacy in the eyes of consumers within as well as outside China. To surmount this challenge, the industry can draw five lessons from the French fashion industry, the most prestigious in the world since its inception 350 years ago. Stroll through a large city in China or chat has emerged from an unfortunate set year and employs 150,000 people.3 France with Chinese tourists in Paris or Milan, of dynamics: Talented Chinese designers is the world leader in the three most and you will see that Chinese consumers, who lack the financial backing and time creative segments of this sector: Perfumes particularly younger ones, are excited by needed to find their style join mainstream and Cosmetics, Haute Couture and Haute fashion. They aspire to Western luxury fast-fashion companies to survive. These Joaillerie (highly exclusive jewelry). These labels especially. And their hunger for companies show little interest in nurturing segments generate impressive growth even fashion is growing. Analysts report that fashion creativity for the long term and during economic slowdowns. They account China will become the largest luxury merely reproduce trends coming from the for 43 percent of the total advertising market by 2020, with Chinese consumers West.2 As a result, consumers—in China and expenditures of French consumer goods buying more than 44 percent of the world’s elsewhere—ignore Chinese fashion brands. industries.4 Thus, they contribute to the luxury goods—up from 15 percent today.1 This situation does little to brush off the international attractiveness of other image of poor quality sometimes associated sectors in France’s economy, such as There’s no doubt that China is the leading with “made in China” textile goods. Gastronomy and Wine, Interior Design textile exporter in the world. Chinese and Decoration, and Tourism. fashion designers are proliferating, and Coco Chanel captured the legitimacy Beijing and Shanghai host dynamic trap in one of her famous aphorisms: Arguably the world leader in fashion over fashion weeks. Yet success may elude this “For a low couture to exist, there needs the past 350 years, French fashion has young industry if it cannot climb out of to be a high one first.” Chanel had it built its success—and its legitimacy in the a deadly trap: failure to gain legitimacy right: Legitimacy comes from the creative, eyes of consumers everywhere—on a set of in domestic as well as international high end of the fashion industry and potent practices. We argue that the young customers’ eyes. The legitimacy trap trickles down to the fast-fashion end— Chinese fashion industry can learn five not the other way around. And creative lessons from the French. If applied, Chinese fashion requires time and specific fashion could beat the legitimacy trap and conditions. How might the Chinese both industries would benefit. fashion industry escape the legitimacy trap? A good first step is to draw lessons from the French fashion industry. In France, fashion contributes to a large and critical part of the national economy: the Lifestyle and Pleasure sector. Fasion directly generates 35 billion in sales each 2 | Accenture Institute for High Performance | Copyright © 2012 Accenture. All rights reserved.
Five Lessons for the Chinese Fashion Industry from the French Lesson 1 Nurture avant-garde creativity, and the mass market—and legitimacy—will follow French fashion got its legitimacy from the Twice a year, the “Grands Couturiers” define consumers’ eyes. Some players in these high-end, highly creative segment first. the next season’s trends, which inspire segments have become European and even Indeed, the industry took off thanks to a ready-to-wear designers and fast-fashion international market leaders. For example, rule that it still applies today: Provide the companies worldwide. The Haute Couture boasting sales of 1.1 billion in 2010 in best quality, an aura of exclusiveness and label is registered and legally protected ready-to-wear and underwear, Etam unparalleled customer service. internationally; only members of the has 4,200 stores in 40 countries. Three Fédération Française de la Haute Couture thousand of these stores are in China, With its roots in the seventeenth century, can use it. Grands Couturiers must comply where Etam plays on its French origin. French fashion has had plenty of time with qualitative and quantitative criteria, to master these mandates. Consider: hand-produce their collections in-house Without these segments, there wouldn’t be When Louis XIV and his prime minister, and present their collections in Paris. a French fashion industry; there would only Jean Baptiste Colbert, established several be French Haute Couture. Chinese fashion royal manufactures of precious fabrics in To find suppliers, highly creative designers companies could learn from this aspect of the 1670s, their goal was to strengthen based in Paris increasingly looked to France’s French fashion’s history by reversing their French luxury exports. As Colbert put it, other regions, where smaller, specialized priorities. Instead of focusing on fast- “Fashion is to France what Peru’s goldmines suppliers, world-class laboratories and large fashion, which curtails the development of are to Spain.”5 They succeeded so well international fashion companies emerged. a style, Chinese entrepreneurs should focus that a network of avant-garde designers Today, these regions employ as much as on the higher end of the fashion market flourished in Paris over the next centuries. 60 percent of the industry’s workforce and and encourage the emergence of creative, Highly creative fashion then became serve as essential innovation centers to the original styles that will attract consumers’ embodied in Haute Couture—which is to French fashion industry. and journalist’s attention everywhere. apparel what R&D is to cosmetics. Put simply, Haute Couture is the research The brand management capabilities, engine of the world’s fashion industry. wealth and entrepreneurial talent fueling Haute Couture in France gradually spilled over to mass-market fashion segments, stimulating the emergence of strong brands that gained legitimacy for the industry in 3 | Accenture Institute for High Performance | Copyright © 2012 Accenture. All rights reserved.
Five Lessons for the Chinese Fashion Industry from the French Lesson 2 Find financial “angels” with a long-term mindset Fashion-minded financial “angels” manage A long-term mindset has enabled China’s fashion industry through means such their ventures with profitability in mind. angels to incubate future star brands as tax incentives. Young designers may also But they also understand that fashion is by nurturing their young, promising consider partnering with business associates connected to art and cultural identity, so designers. They provide designers with who can set up credible business plans to they stay committed for the long haul. ample autonomy, time and funding to attract financial angels. Schools of fashion For instance, the Wertheimer family has develop their style. They also impart design may also wish to step up their game nurtured Chanel since the 1920s, and critical management know-how. LVMH, to attract the attention of financial angels. the Hermès family has managed the for instance, made a smart bet when eponymous firm for generations. Examples it appointed the promising but still abound outside the luxury segment, too. little known John Galliano as Hubert de Givenchy’s direct successor in 1995. If such angels are scarce in China, the government may want to consider encouraging their involvement in Lesson 3 Open up to foreign direct investment French fashion has benefited hugely from Wang appointed talented designer Alber association with the Hermès brand. Hermès France’s openness to foreign investors, Elbaz and granted autonomy to Lanvin’s will benefit in the long run too. By building who have brought knowledge, talent management and creative teams,7 moves on its core image of exclusive quality and and capital to small companies that that restored Lanvin’s brand power. design, it will attract not only consumers later became international successes. who favor French style but also those For instance, when Germany’s Triumph The Chinese fashion industry has only drawn to Asian style. acquired HOM in Marseille in 1986, it recently begun benefiting from FDI. Hermès’ transformed it into an international leader investment in Shang Xia is one example. To implement this lesson, young Chinese in men’s underwear design.6 Foreign According to its website, Shang Xia is a fashion designers and fashion design schools investors have also turned ailing French contemporary brand founded in 2008 “to should reach out to foreign investors. French companies around. Consider Lanvin, bring the excellence of Chinese and other fashion players that are now commercially acquired by Ms. Shaw-Lan Wang in 2001. Asian craftsmanship into contemporary active in China should use their presence lifestyle through the encounter of heritage in China to spot promising talent and back and innovation.” Regarded as one of a their ventures. They too would gain in the handful of firms so far that could satisfy rise of the Chinese fashion industry. Chinese consumers’ aspirations for social status and become an international hit, Shang Xia gains crucial advantages from its 4 | Accenture Institute for High Performance | Copyright © 2012 Accenture. All rights reserved.
Five Lessons for the Chinese Fashion Industry from the French Lesson 4 Import and export top talent An equal reliance on national as well as Consider how Paris put Japanese fashion on on to produce successful companies whose foreign talent has contributed to French the international map and how the industry inspiration came from Japanese minimalism fashion’s enduring attractiveness. The in both Japan and France benefited. When and high-tech textile innovation. industry owes its success as much to the Kenzo and Issey Miyake arrived in Paris in French designers it has recruited as it does the 1960s, Japanese fashion was unknown. If Chinese designers gained a foothold to foreign but Francophile designers who, The two designers first worked for several in Paris by acquiring similar experience, stimulated by intense competition, built years in Parisian fashion houses before the best of them may be able to use the successful careers in France. In fact, Paris is creating their own brands in Paris in the Haute Couture label—which could help the such an alluring international platform that 1970s. They were soon followed by Hanae industry gain legitimacy among Chinese foreign designers accounted for about 30 Mori, who made major contributions to consumers. French players should actively of the 92 shows in the latest Mode à Paris Haute Couture. When Yoji Yamamoto encourage the emergence of Chinese talent (women’s fashion week).8 and Rei Kawakubo (Comme des Garçons) in Paris. The Chinese industry could further achieved international fame in 1981 strengthen its legitimacy by drawing skilled after presenting their collections in Paris, foreign designers to China. Japanese fashion’s international identity was forged. French fashion won, too: Paris associated itself with another avant-garde movement, which further strengthened its international attractiveness. Equally important, France’s fashion industry went 5 | Accenture Institute for High Performance | Copyright © 2012 Accenture. All rights reserved.
Five Lessons for the Chinese Fashion Industry from the French Lesson 5 Build an institutional ecosystem French fashion acquired and sustained worldwide. French fashion owes much counterfeiting. This could help Chinese its international legitimacy thanks to to foreign media too, including Harper’s brands protect their intellectual property, systematic cooperation between industry Bazaar’s popularizing of Christian Dior’s which in turn would enable them to sustain players, the media, non-governmental “New Look” in America after 1947.9 their cachet and attract angel investors. institutions and the French state. For example, media in France played a critical Chinese fashion players could similarly Connections between French fashion firms role in catalyzing excitement around leverage the media to educate Chinese and fashion design schools (e.g., ESMOD), French fashion throughout the country but consumers about fashion and shape their creative management schools (e.g., IFM) also in Europe and America. As early as the perception of Chinese fashion. Chinese and business schools located in France and late eighteenth century and until World media should also make sure that emerging overseas have further benefited France’s War II, magazines such as La Mésangère brands such as Shang Xia and Shanghai fashion industry. This ecosystem also became the standard-bearers of French Tang are not merely perceived as targeting extends to the French state. For example, in fashion, owing to their sophisticated foreign consumers. early 2011, the Ministry of Industry set up fashion prints, detailed account of a strategic committee, chaired by Dior and seasonal trends and entertaining reviews Cooperation between fashion houses within Hermes’ CEOs. The committee’s goals are to of Parisian happenings. Since then, media professional associations has been equally consolidate the value of “made in France” powerhouses such as Elle, Marie-Claire crucial. Consider the Comité Colbert. and to pilot a “bank of Fashion” that will and Fashion TV have continued this work Founded in 1954, the association gathers grant preferential financial conditions to the 75 most prestigious French companies emerging young designers and fashion in the luxury sector and a few international entrepreneurs. Players in Chinese fashion associated companies.10 It also organizes could foster similar connections and in joint promotional events around the particular reflect on the potential future world, strives to combat counterfeiting value of a “made in China” label. and identifies luxury e-commerce best practices. Chinese professional associations could play a similar role; for example, by lobbying Chinese authorities to fight Which fashion future for China? The young Chinese fashion industry faces must patiently interweave the strands beneficial relationships with a diversity a promising but difficult road ahead. of legitimacy to create a fabric that of ecosystem players. Close cooperation At present, its challenge is to establish captures Chinese fashion’s unique identity. with the French fashion industry would its legitimacy, not least in Chinese Drawing lessons from French fashion’s be mutually beneficial. consumers’ eyes. Focusing on fast results history could help the Chinese industry and fast fashion will not help industry accomplish this—by nurturing avant-garde leaders reach this goal. Instead, they creativity, attracting domestic and foreign talent and investors willing to commit for the long term, and establishing mutually 6 | Accenture Institute for High Performance | Copyright © 2012 Accenture. All rights reserved.
Five Lessons for the Chinese Fashion Industry from the French About the Author About the Accenture Institute Notes 1 “China to Become the World’s Largest Market for for High Performance Luxury Goods over the Next decade,” CSLA Stéphane J.G. Girod, Ph.D. (stephane. (February 2, 2011). https://www.clsa.com/about-clsa/ firstname.lastname@example.org) is a research fellow The Accenture Institute for High media-centre/2011-media-releases/china-to- become-the-worlds-largest-market-for-luxury-goods.php with the Accenture Institute for High Performance creates strategic insights 2 “Will Chinese Designers Get Left Behind in China’s Performance. He publishes in the field of into key management issues and Fashion Boom?” CNN (September 29, 2011). http://cnn. international strategy and organization. macroeconomic and political trends com/2011/09/15living/china-fashion-designers/index.html 3 Ministère des Affaires Etrangères. http://www.diplomatie. He has six years’ professional experience in through original research and analysis. gouv.fr/fr/france_829/economie_19084/index.html the fashion industry. He is based in London. Its management researchers combine 4. “La Mode en Chiffres,” Ministère de l’Economie, world-class reputations with Accenture’s des Finances et de l’Industrie, Services des Etudes extensive consulting, technology and et des Statistiques Industrielles (Sessi). http://www.insee. fr/sessi/publications/dossiers_sect/pdf/mode2005.pdf outsourcing experience to conduct 5. http://www.citations.com/citations-motcle-commerce/ innovative research and analysis into jean-baptiste-colbert/commerce-la-mode-est-pour- how organizations become and remain la-france-ce-que-les-mines-du-perou-sont-pour-l- espagne--94-353410--.htm high-performance businesses. 6 “HOM, Nouveau Siège Social et Clarification de l’Offre,” Le Journal des Entreprises (June 11, 2009). http://www. lejournaldesentreprises.com/editions/13/actualite/ About Accenture entreprise-du-mois/hom-nouveau-siege-social-et-clarifi- cation-de-l-offre-06-11-2009-79941.php 7 “Interview de Thierry Andretta, CEO de Lanvin,” Fashion Accenture is a global management Daily News (October 21, 2011).http://www.fashion-daily- consulting, technology services and news.com/interview/thierry-andretta-ceo-de-lanvin.html 8 This excludes the Italian houses owned by French groups outsourcing company. Committed that are still Italian operators. to delivering innovation, Accenture 9 “Le Luxe: Production et Services,” Conseil Economique et collaborates with its clients to help them Social (2008). http://www.conseil-economique-et-social. fr/rapport/doclon/08022002.pdf become high-performance businesses and 10 Comité Colbert: http://www.comitecolbert.com/internet/ governments. With deep industry and index.php?option=com_content&task=view&id=159&Ite business process expertise, broad global mid=112&lang=en resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With more than 236,000 people in more than 120 countries, the company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com. 7 | Accenture Institute for High Performance | Copyright © 2012 Accenture. All rights reserved.
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