Supreme, whose one co-branded short sleeve shirt can fetch tens of thousands of yuan in China, has once again revealed its intention to enter the Chinese market. VF Group CEO Steve Rendle said recently in a conference call after the earnings report that Supreme does not rule out entering the Chinese market.
However, it is not easy for Supreme to get a share of the Chinese market. First of all, China’s fashion culture continues to grow. At the same time, although Supreme successfully registered its trademark in China in January last year after three years of fighting counterfeiting and safeguarding its rights, there are still many counterfeits of Supreme in China.
In the eyes of many Chinese consumers, Supreme’s aura is no longer there. Industry insiders pointed out that if Supreme chooses to enter the Chinese market at this time, in fact, it has already missed a good opportunity, coupled with the gradual loss of its positive image, and its future development path in China is worrying.
Supreme may open stores in China
Recently, Steve Rendle further revealed in a conference call after the earnings report that Supreme does not rule out entering the Chinese market.
In fact, Supreme’s intention to enter the Chinese market has long been revealed. In 2019, after Supreme Italia, which is regarded as a copycat brand, opened a store in Shanghai, the American street fashion brand Supreme immediately hired a team of lawyers to defend its rights in China. On January 21, 2020, Supreme officially obtained a trademark patent granted by the China Trademark Office. The scope of application includes shirts, pants, jackets, hats, shoes and other products.
On May 11, 2020, Supreme registered an official account called supremenewyork on Weibo, and many consumers left messages in the comment area expecting it to open stores in China.
Although information about entering the Chinese market has been leaked from time to time, Supreme has never really gained a place in the Chinese market.
“The important thing for Supreme’s entry into China is not brand marketing, but policy public relations. Supreme is a trendy brand loved by young consumers. Although it has not officially entered China, Chinese consumers have already purchased and familiarized Supreme products through various channels. After the acquisition by VF Group, which is familiar with the Chinese market, Supreme can get strong support in policy and public relations. In addition, as a member of its brands, it can also share experience and resources in opening stores and other aspects,” said Shen Meng, Director of Chanson Capital.
According to the latest financial report of VF Group, many of its brands have achieved good performance in the Asia-Pacific region. In the three months ended March 31 this year, Vans, The North Face and Timberland’s revenue in the Asia-Pacific region increased by 32%, 104%, and 65%, respectively.
In addition, Shen Meng also pointed out that “Supreme, as an independent brand before, lacked extensive experience in the Chinese market, and the street culture represented by the brand was not very active in China before.”
A related person in the fashion industry said: “Supreme is actually very cautious in opening stores. Since its establishment in 1994, there are only 13 stores in the world, and they are only opened in cities where fashion culture is popular, such as New York and Tokyo. China’s fashion culture developed relatively late. Although now with the rise of the Chinese fad (guochao) and the prevalence of fashion culture, the Chinese market has gradually produced an influence that cannot be ignored in the world, but a few years ago, fashion culture was not the mainstream in China.”
Regarding Supreme’s specific store opening plan and other issues, the reporter contacted the VF Group, but as of press time, there is no response.
The “supreme” status in China no longer exists
As its name suggests, Supreme does occupy a top position among street brands. The furniture co-branded with LV has a price of more than 1 million yuan in the secondary market, and the co-branded “box logo” short-sleeved short-sleeved brand is often tens of thousands yuan. As a brand that has always been known for its amazing premium in the secondary market, Supreme has a wide range of recognition among Chinese consumers.
The reporter previously saw on the sale day of the Supreme store in London that nearly one-third of the consumers queuing to buy were Chinese. According to a trendy brand purchasing agent, such a ratio is normal, especially as the Chinese market has high demand, and a batch of Supreme products are sent back to China on a weekly basis.
But in the past year, in the eyes of those who love fashion culture, Supreme’s “supreme” status seems to have gradually begun to shake. In a Supreme community app called “Sup comm”, more than 80% of consumers disliked some of Supreme’s recent styles.
Fashion culture lover Xiao Li said: “I used to feel that Supreme was a god. All clothes and accessories would basically be sold out within one minute of online sales, but now Supreme’s styles are even priced below their original prices on the secondary market.
On the Chinese fad streaming online shopping community “Dewu”, a 2020 non-co-branded tote bag would be issued at a price of about 599 yuan. In the purchase record, some consumers made transactions at a price of 559 yuan, and even some purchasing agents posted “clearance specials” information for some Supreme products in Moments of WeChat.
A consumer who has been following the Supreme brand for six years has similar feelings to Xiao Li: “At first I thought this brand was cool, I knew it was very limited, and the price was high. But then it became more convenient for me to buy Supreme because of studying in the UK. It feels that it is not as unpredictable as expected, and the quality is not good. Later, I found that more and more people were wearing it. Without the limited and niche feeling of the time, I bought less. ”
“In fact, the trend of Supreme is slowly receding now, but we all know that Supreme is a brand with a long history and culture. In fact, it does not care too much about how the market views it. I think this brand has a unique personality compared with many domestic and foreign brands.” Xiaobai, the founder of EVENZERO, a cutting-edge designer brand, thinks.
The founder of Sustainable Fashion, Yang Dayun, said bluntly: “If Supreme chooses to enter the Chinese market at this time, the results may not be satisfactory. Because it has missed the peak of brand influence. The popular and life cycles of trendy brands are limited and wavy. If it enters China now, I predict that its future sales growth will certainly not be too good, because Chinese consumers’ love for it is fading.”
Challenges in the Chinese market
The American Supreme has won the trademark battle with the copycat version of the Italian Supreme. However, the copycat Supreme in the Chinese market is faintly visible and even appeared in the live broadcast of famous e-commerce anchor Wei Ya.
After being questioned by Chinese netizens about selling fake Supreme co-branded products, Wei Ya said in the live broadcast room: “This product is recommended by the official Tmall international services. It is indeed the joint name of the US Supreme, but it is not my ideal Supreme.” Supreme’s co-branded brand Fang Guxun said in an apology statement: “After being reminded by Chinese netizens, our company learned that there are multiple Supreme brands in the United States and has stopped cooperating with the copycat Supreme.”
In addition, the gradual rise of the Chinese fad may also become one of Supreme’s challenges in gaming the Chinese market. According to the “Baidu 2021 Chinese fad Proud Search Big Data” report, the attention of Chinese fad has increased by 528% in the past ten years.
“The emergence of Chinese designer brands is bound to have an impact on foreign fashion brands in the Chinese market because in China, the prices of foreign fashion brands are still high, and most Chinese consumers cannot afford it. This gives some Chinese designer brands an opportunity.” Xiaobai said.
He further explained that most of the young Chinese consumer groups may simply pursue styles, and some Chinese brands can be used as substitutes to temporarily meet consumer needs. But the current impact is small because Chinese designer brands are actually still in the development stage and not many can be recognized by the world. Some Chinese people who pursue brands will still choose foreign fashion brands.
Zhang Peiying, an expert in the field of fashion, believes: “Whether it is the rise of Chinese fad or the problem of copycats, it will be a challenge for Supreme to enter the Chinese market. For the brand itself, it is necessary to do the preliminary work from two aspects. One is about brand authorization, a firm brand strategy is required in areas such as buyout, sale, and sales authorization. It cannot be easily delegated. Once the gap is opened, various problems on the market will be overwhelmed. Second, the brand must consider long-term development and performance needs. Supreme pursues brand tonality, but market and capital pursue profitability, and there needs to be a balance between the two.”
“From a general perspective, Supreme has a lot of room for development in China, because the brand’s new generation of consumer base still exists here, but it still needs to make adjustments in product innovation and research and development. For its development in the Chinese market, it needs to take into account the multi-dimensional consumer groups.” Zhang Peiying said.
However, Yang Dajun said frankly: “Supreme’s brand image is actually severely damaged in the Chinese market, and the Chinese market still lacks the protection of intellectual property rights. Moreover, frequent rights protection battles have also affected the positive value of the brand, and even almost lost all of its value in China. The basic loss has been exhausted. And the climax of the pursuit has passed, then the results of its future development in China can be imagined.”
Source: Beijing Commercial Daily