Weekly NVE (CHINA): E-Commerce Vs Brick-and-mortar – China bubble? – China’s elite snub popular brands – Brands shift focus to 2nd & 3rd tier cities -A look at luxury’s talent shortage – Behind China’s internet censorship – Medium Rare hits Beijing – J Crew launches in HK

Photo: H&M Holiday Campaign, Source: BoF

With E-Commerce Surging In China, Who Needs Brick-And-Mortar? (Jing Daily) ”Nearly 40 Percent Of China’s E-Commerce Market Devoted To Fashion & Accessories. Chinese shoppers are drawn to online retailers like Taobao for lower prices and greater selection. Though not without its own very particular (and ever-changing) set of challenges, China’s booming e-commerce market is convincing some aspiring fashion and luxury retailers to skip brick-and-mortar stores and go online-only….[This year China has seen] announcements by the likes of Net-A-Porter and Neiman Marcus, as well as designers like Alexander Wang and — soon — brands like J. Crew, that they’re ready to launch e-commerce options in China. Considering the country’s overall online retail market hit US$121 billion in sales last year…China is expected to become the world’s largest luxury retail as well as luxury e-commerce market by 2015…Overall, this year China’s luxury e-commerce market is expected to surpass US$3 billion, with some estimates projecting that to expand to 37.24 billion yuan (US$5.9 billion) by 2015.”

Asia focus: Signs of a bubble in China cause concern (FT) “In 2005 a report by Ernst & Young predicted that in 2015 Chinese luxury spending would exceed $11.5bn. In fact, China cantered past that figure five years ahead of time and, last year, its consumers spent an estimated $15.6bn on luxury goods, with Asia accounting for over half of global high-end watch sales.”

China’s Chic and Wealthy Snubbing Popular Luxury Brands? (Red Luxury) “Louis Vuitton is in a predicament: the brand is very popular in China, but it may become a victim of its own success. “In China, Louis Vuitton is seen as the brand that even your ai-yi, or domestic helper, can afford,” an anonymous retail consultant recently quipped. But shoppers are becoming more candid. “I have two Louis Vuitton handbags but I no longer carry them although they are still in fashion,” said Daisy Liu, a 31-year-old employee at a multinational cosmetics firm. Instead Liu now gravitates toward Hermes and covets a Bottega Veneta lambskin bag. Of Louis Vuitton, she said, “I don’t think the brand fits me any more.”

Big brands lead charge (China Daily) “Major brands from across Europe are looking toward China’s second- and third-tier cities as the country’s domestic market continues to grow outside of Beijing and Shanghai. With a foothold already established in China’s biggest cities, multi-national European brands as diverse as Ikea and Louis Vuitton are moving inland in search of new customers.”

How Some Luxury Brands Are Staying Ahead of China’s Talent Shortage (Red Luxury) “China, a country of 1.3 billion, is gobbling up luxury products. As more brands enter the rapidly growing Chinese market and expand to second- and third-tier cities, the need for trained, informed retail staff has skyrocketed. “Excellent service is a relatively new concept in China, and most people are not accustomed to experiencing great service.”

 New Study Finds Revealing Patterns in Chinese Internet Censorship (WSJ) ”It is well established that China’s propaganda authorities employ a variety of techniques in attempting to control the spread of information on social networks, but a new study suggests the government’s last line of defense, an army of human censors who manually excise posts, is operating differently than previously thought. Instead of simply censoring topics critical of the government or that make China look bad, the study finds, the country’s human censors specifically target posts that could lead to protests or other forms of collective action, leaving ample room for China’s web users to criticize its government…After examining more than 11 million posts made on 1,382 Chinese social media web sites, the study estimates that roughly 13% of all blog posts in China are censored.”

Hong Kong Niche Boutique Medium Rare Hits Beijing (Jing Daily) ”With the emergence of a niche buyer base for lesser-known fashion brands and designers in cities like Beijing and Shanghai, a handful of curated multi-designer stores have opened in (or expanded into) the Chinese Mainland in recent years. From Shanghai boutiques like Le Lutin, Alter and VILLA to Beijing’s Dong Liang and Triple-Major, these stores stock emerging labels that shoppers wouldn’t otherwise be able to find at larger players like Hong Kong’s JOYCE, The Swank and Lane Crawford. Recently, a new multi-brand retailer, Hong Kong-based Medium Rare, made its first foray into the mainland China market, opening a location at Beijing’s Sanlitun Village. (Home to brands like Balenciaga, Alexander Wang, Lanvin and Maison Martin Margiela and another multi-brand boutique, Hong Huang’s Brand New China.)”

J Crew expansion plan bypasses Europe (FT) “J Crew, the US contemporary fashion label favoured by Michelle Obama, the US first lady, will launch its first bricks-and-mortar presence outside North America in Hong Kong and Beijing this northern autumn, bypassing Europe.”