Last updated on July 2nd, 2019 at 09:08 pm
My great-great-grandmother was a great believer in reading tea leaves. Her son-in-law, my great-grandfather, was not.
When he would see a hushed gaggle huddled around a cup, he would remark that he too could read tea leaves. After careful perusal, he would announce that as far as he could see, whoever the cup belonged to had a dirty bottom, there would be much laughter from him and sheepish silence from the rest.
But, that was in 1910 Toronto, as an engineer he understood the industrial age but not the consumer revolution which followed.
In today’s environment where predictions can become self-fulfilling prophesies, he would have to revaluate his contempt for what he regarded as superstitious chicanery. At a time when perception is more important than the reality, reading tea leaves has moved from kitchens and parlors to the media and boardrooms.
You are asking why am I burdening you with family homilies and anecdotal observations?
Because today we live in a world where the Apple iphone, today’s fashion must, will inevitably be tomorrow’s fashion passé, and along with it will go the fortunes of the brands and their stocks.
So what does this have to do with China?
When Peng Liyuan, wife of China’s new President Xi Jinping, stepped off the plane in Moscow, Xi’s first official foreign trip as president, she took center stage with a tailor made wardrobe by a domestic Chinese brand. It was significant in two ways; first, she did not remain in the shadows, as Hu Jintao and Ziang Zemin’s wives did, which reflects a newfound appetite for public relations. Second, she sent a decidedly strong fashion message by eschewing the usual famous foreign brands, in favor of a series of custom made outfits by Ma Ke of Exception de Mixmind.
Despite its rather Chinglish name, Exception de Mixmind is one of China’s first independent designer labels. Founded by Ma Ke and her husband in 1996, Exception has the distinction of being the first Chinese brand to present a show at Paris Fashion Week (2007) and counts among its celebrity clients Li Na, China’s leading tennis star.
The company already has a handful of boutiques spread around the world. It has vaulted Peng Liyuan into the celebrity spotlight, where the media is comparing her to Michele Obama and Carla Bruni-Sarkozy, and Exception is now at the center of intense speculation, despite Mrs. Ma’s protestations to the contrary.
The fashion world took notice, as did the Chinese people. Armance Rotceig, a French fashion designer, with his own label, said, “… she detached herself from Western styles and presented a vision of contemporary Chinese fashion, with a desire to bring Chinese designers to the world stage.”
The following day, the subject of the moment in our office was Peng Liyuan, how classic and elegant she is, where can we find those clothes and a bag like the ones she has, isn’t Chinese fashion great!
It was a decided departure from the usual plotting about how to get the latest LV handbag, and definitely different from the last 15 years when only things with a famous foreign brand were worth buying.
While I am not exactly a follower of fashion or first ladies, at a time when China just passed the United States as the largest purchaser of luxury products, it looks like a new phenomenon, the Chinese luxury brand, is about to start making inroads, which means either lost profits or a need to change strategies for traditional brands.
In the case of the giants, like LVMH and PPR, it probably means buying Chinese brands for their stable. For smaller firms, it could mean starting a brand in China.
Why does this matter to you?
China’s markets are dynamic and evolving. Do not assume anything and be prepared for everything. If, as is expected, China’s cadre of glamorous, wealthy and well-dressed follow Peng Liyuan, it could put a serious crimp in earnings of foreign fashion brands. It could also be the pin which lets the air out of the brand bubble.
Or, it could be a new vista. Lesson, while you can bring your brand identity with you. Make sure you are building an identity that will resonate with an increasingly confident Chinese consumer, which in some cases means playing to the increasingly nationalistic sentiments of its people. So, when you are looking to read the tea leaves in China, make sure you read the tea leaves of the people you will be selling to and then try to make your predictions self-fulfilling prophesies.
Einar Tangen, formerly from Milwaukee, now lives and works in Beijing, China. He is an adviser to Heilongjiang Province, Hebei Province QEDTZ, China.org.cn, China International Publishing Group, Beijing Baotong and DGI DESIGN. He is also a weekly public affairs commentator for CCTV News’ Dialogue and the author of “The Kunshan Way,” an economic development history of China’s leading county level city. While in Milwaukee, he was a partner at Jackson, Morgan and Tangen, president of E-Tech and a senior vice president at Stifel Nicolaus. He chaired various boards in Milwaukee and was a member of the Federal Home Loan Bank of Chicago. Readers who would like to submit questions or suggest areas of interest can send an e-mail to email@example.com.