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October 12, 2012 8:45 pm
London has become such a hotspot for Chinese tourists seeking luxury brands that the first fashion retailer from China has opened a West End store to raise its profile back home.
Bosideng, the Chinese menswear brand, launched its first UK store on Friday close to Bond Street. The exercise is less about attracting British shoppers than reflecting the growing international appeal of the British fashion scene.
“Our ambition is to be a well-known brand – and London is the fashion centre of the world,” said Gao Dekang, its wealthy founder and chairman. With nearly 11,000 Bosideng shops across China, Mr Gao describes the retailer as being “the Marks & Spencer of China”. In making the journey to Europe, the business has sought to move its image upmarket. It hopes to rival brands such as Hugo Boss.
Bosideng has spent £30m – a small slice of its gross profit last year of £418m – on its glitzy Mayfair store, the upper floor of which contains its “European headquarters”, signalling the extent of its ambitions. It is now planning to open in Italy next year in partnership with a large Italian company, and is close to buying a store on Fifth Avenue in New York.
By upgrading its image in this way, Mr Gao hopes it can raise its status in the all-important eyes of Chinese visitors to the UK – rather than British shoppers – in the hope they will shop in its stores when they return home.
“This is all about flashing the cash and showing that you’re a player,” says Paul French, chief China analyst at Mintel. “This is aimed at the Chinese abroad and is about trying to appear like an international brand even when you’re not an international brand. It is not really trying to sell anything to anyone in the UK.”
He said the Chinese milk company Yili had acted for similar reasons during the London Olympics when it advertised to Chinese people, in Chinese, on the side of the capital’s buses.
Other Chinese companies are following Bosideng’s London venture closely. Mr Gao says he had already received visits from five Chinese retailers, who were all interested in opening in Britain and wanted to know more about his experiences.
Tom Troubridge, chairman of the China business group at PwC, says the professional services firm had experienced a surge in interest from Chinese companies looking at the British market.
“Inquiries are substantially up,” he says. “We have two or three a week, whereas five years ago it was two or three a month.”
“We are seeing interest in high-end brands, from motor cars to handbags, ladies’ fashion and alcohol,” he says. “It is not because they think there are fantastic growth opportunities in the UK – it is about finding products and services they can take back to China.”
Chinese companies are hunting opportunities to target wealthier consumers in their domestic market, vying alongside western designer brands to gain the affections of China’s growing middle class.
However, its domestic brands tend to lack the advantage in design, creativity and innovation that British companies have, says Mr Troubridge.
Brand heritage is important to the Chinese luxury consumers’ perception of quality. This helps to explain why – unusually for the British high street – 90 per cent of Bosideng’s clothes are made in Britain or Europe.
However, retailers are not the only businesses seeking to cater for Chinese people overseas.
Mr Troubridge says one Chinese client had instructed his firm to help buy a UK hotel chain so that it could cater for the expected rise in Chinese tourists, who might be more comfortable in a Chinese-owned hotel.
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