This week in the news, Jimmy Choo’s upcoming IPO will likely speed up China expansion plans, internet moguls top the China Rich List, wealthy Chinese are buying up Seattle-area real estate, Zegna is producing online films to boost brand, and Chinese shoppers favor US retailers.
Jimmy Choo owner JAB Holdings is preparing for an IPO on the London Stock Exchange that will value the company at approximately £800 million. JAB Holdings will sell off a 25 percent stake in order to raise £200 million. The company, with 120 stores worldwide, plans to open 10 to 15 stores per year with a greater focus on China where it already has 11 stores. It also plans to expand its online business and refurbish its existing stores. Sales in the first half of the year rose 9.4 percent to £150.2 million. Worldwide, demand for luxury footwear is outstripping that of other luxury goods such as handbags. Much of this demand is coming from China with 3 billion pairs of shoes sold in the country last year.
With the world’s largest ever IPO, Alibaba raised US$25 billion, and its CEO, Jack Ma Yun, has seen his net worth skyrocket. With his fortune made up almost entirely of his 6 percent stake in Alibaba, with its stock rising 38 percent on the first day of trading, and a 46 percent stake in Alipay, Jack Ma now has an estimated fortune of $25 billion, up five times from last year. Overall, there are 354 dollar billionaires this year, up from 39 last year. Ten years ago there were only 3. Out of those that made the list, 819 saw their wealth grow and there were 343 new faces. Last year, only 672 saw their wealth grow and there were only 115 new people on the list. The entrepreneurial spirit is alive and well in China, as 26 of those listed are under forty and self-made.
In recent years, wealthy Chinese have become the biggest foreign buyers of real estate in the Seattle area. Many agents are hiring Mandarin speakers, and some are even opening up offices in Beijing. The focus of the real estate buying frenzy so far has been on a few of the most upscale suburbs of Seattle, including West Bellevue and Medina, which is home to Bill Gates and Jeff Bezos. In the eastern suburbs of Seattle, brokers say that Chinese buyers purchased 20 to 40 percent of the $1 million and up homes in the area. The median purchase price of Chinese-bought homes is $523,148, which is nearly twice the national average. Three quarters of the purchases are in cash.
Italian fashion brand Ermenegildo Zegna is incorporating entertainment into its marketing strategies with a new online film series. The series, entitled “A Rose Reborn,” was directed by Park Chan-wook, a South Korean director known for his edgy style. The film tells the story of Stephen (Jack Huston) a young and successful London engineer who is pressured to sell his business to an eccentric Chinese billionaire. The first episode of the series, “You’re Not Wearing That,” premiered on social media on September 15 and is available for viewing on YouTube. The series not only showcases Zegna’s target consumer, but also weaves him into a narrative compelling enough to keep viewers interested.
The United States is the favorite shopping destination for both Chinese tourists and Chinese online shoppers according to a new study by Visa and Economic Information Daily. Last year, 98.19 million Chinese made overseas trips, of which 96 percent were private business, which was an 18 percent increase over the previous year. Spending by Chinese outbound travelers increased 24 percent over the previous year with 128.6 billion yuan ($20.9 billion) spent in overseas markets. These travelers spent $1,368 per capita on average in 2013. Chinese online shoppers spent 3.1 trillion yuan in 2013. Their favorite online shopping destinations were American websites, while South Korean e-tailers saw a dip in sales.
image credit: vogue.it