“The world has used China as a cheap manufacturing land,” said Shu Shu Chen, communications director for the Hermes Chinese fashion line Shang Xia. “This has been the defining thing for the past 10, 20, 30 years. The time has come to move on from that idea.”
Ms. Chen is not the only one who shares this dream for China’s future in production. While the Far East has traditionally been associated with cheap labor and shoddy production, its reputation is changing—and attracting big name brands.
“We use Chinese production because it’s fantastic quality, and what the customer would expect from us,” said Stacey Cartwright, chief financial officer of Burberry.
Tiffany Wu, cofounder of the Chinese handbag label Heirloom, notes that other fashion giants are also looking to China for production.
“If you look at labels on Coach bags, they say Made in China; they don’t try and hide it. More and more people are recognizing that Chinese-manufactured products can have the same quality,” Wu said.
Tali Wu, the Shanghai-based designer of the leather good brand Flying Scissors, also takes Chinese production values seriously, looking to develop a product not only made in China, but created there, too.
“For my brand and other young Chinese brands there are definitely patriotic consumers who want to buy something Chinese—if it’s of equal quality and they like the design. I know I have that feeling,” Tali said.
Flying Scissors’ best-selling bags go for about $500 to Chinese consumers.
“We occasionally make bags around the $1,000 range, and they do sell, but I think it’s still too soon and too high-priced for younger consumers here,” said Tali.
Irene Yu, an analyst with China Market Research Group, notes that young Chinese consumers are the ones who are driving the demand for luxury labels; however, their discretionary income is limited.
“The 25- to 35-year-old consumers are not where the wealth of society is yet,” said Yu. “But these consumers are driving luxury sales because they want them, and are willing to spend all of their disposable income on buying luxury. They will save several months of salary to buy a luxury bag to show their status and project an image of success to others. It is very often a secretary making $600 a month who is buying thousand-dollar Gucci handbags,” she said.
According to Yu, having the right brand is more important as a status symbol than having a brand made outside of China.
“I get the sense that Chinese consumers are getting prouder and prouder,” said Charles de Brabant, founder and CEO of Saint Pierre, Brabant, Li and Associates luxury consultancy. “We’re at a turning point in the thinking that products have to be manufactured outside of China in order to be luxury brands.”
photo credit: flying scissors