Matthew Jukes Authors

Homegrown Style: Mao Jihong’s Quest for the Chinese Luxury Market

December 19, 2012

Fashion designer Mao Jihong on how one of China’s leading luxury brands made its mark on the mainland

Mao Jihong is the man who could build a bridge between the Chinese luxury market and the rest of the world. Standing astride the world’s second-largest luxury market, Mao, the founder and president of Mixmind Art & Design Co., Ltd, and his then wife and fashion designer Ma Ke famously started out by selling handmade clothes at high prices opposite Guangzhou’s landmark Garden Hotel. He wanted to avoid mass factory production, he said because he believed it would decrease consumer faith in his products.

Today, 16 years later, Mao’s efforts seem to have paid off. His company, set up in 1996, offers two fashion brands for women, Exception de Mixmind, the flagship ready-to-wear clothing line and the curiously named Wuyong (which means useless in Chinese), a haute couture collection which was founded in 2006.

Ma Ke has stepped out of the corporate limelight somewhat to focus on Wuyong, which has made a splash in the fashion world with its use of distinctly unfashionable materials. Models sashay down the ramp in chic clothes made out of recycled objects, leftover tarpaulin and sack-like cloth.

Meanwhile, mainstay brand Exception has built a significant presence of over 100 stores in the Eastern cities of Beijing and Shanghai as well as their home base, the growing metropolis of Guangzhou. Exception is touted as the Chinese fashion industry success story and has an estimated annual turnover of more than RMB 900 million a year. Mao claims that he’s the biggest in the market. Industry observers such as fashion media mogul Hung Huang have put the brand at the top of their watchlist for homegrown brands with the potential to make it big abroad.

When Mao launched the brand, Exception was almost the only Chinese designer brand in existence, and he began on pretty much a blank slate. “When we entered the market, we chose a very different direction,” Mao recalls. “The international brands started off by building a high-end line, and from the top down they built medium or low-end lines.” Italian fashion house Armani started out in the 1960s, influenced by the style of British nobility, and hoping to bring that to an already wealthy population. It was only after Armani became successful internationally that they expanded to product lines like A.X (Armani Exchange) and Armani Jeans that could appeal to the lower end of the market.

Mao had no such demographic to work with, and was forced to test the waters before he could sell to the upper echelons of Chinese society. “For us as a designer brand, we had to enter the market slowly and grow with our consumers. Since we started out, we have had to work hard to make our clothing a definitive brand name,” he says.

Today, Exception seems to have carved out a niche of his own. “We’ve got so many different types of Chinese brands; I think the only thing comparable in being design-focused would be the smaller independent labels,” says Nels Frye, editor-in-chief at Lifestyle magazine and founder of the Beijing Stylites website. “I mean how would you describe Dolce and Gabbana? It’s not exactly a luxury brand, but it’s certainly priced very high, and it’s more fashionable, more design-oriented. I think this label (Exception) is interesting because it’s very much its own voice.” Exception considers as competition well-known international brands and a host of young Chinese designer clothing brands that have followed in its footsteps.

So what really sets Exception apart? “Our brand has always used cotton, linen, silk and wool as material, respecting nature and the environment,” says Mao. Mao understands the pulse of the Chinese consumer and that gives him an added advantage. “Westerners use sight as their fashion sense, whereas Chinese tend to favor touch and texture as a measure of beauty. We’re exploring that measure, and that’s what builds loyalty and confidence among our consumers,” he says.

That strategy seems to work for Mao. Says Lifestyle’s Frye, “I can imagine an older generation… would be inclined to buy something with more texture and more color and pattern…. It actually has a certain connection to what I would describe as a movement among the young people which has toured; a very simple rejection of all the brands and the ‘glitteryness’.”

Cashing in on New Luxury

China’s growing obsession and frivolity with wealth and luxury has been well documented over the past decade. The need to appear wealthy is closely linked with the sociological concept of “face”, and the amount of respect you are shown by individuals around you. In China, visible affluence can be key to everything from job interviews to successfully hailing a cab—and conspicuous consumption pays, especially when it comes to fashion.

A McKinsey report titled Understanding China’s Growing Love for Luxury published in March 2011, attributed the surge of luxury purchases to “luxury role models”, the self-made entrepreneurs who have sprung up in wake of China’s opening up and reform policy, and the luxury fanatics, whose sense of optimism correlates with China’s growth in GDP figures. It is estimated that currently 300 million Chinese with a disposable income are driving the nation’s spending. By 2030, that number is estimated to increase to 1.4 billion.

The knock-on effects have already been seen in the luxury market. A survey released by PricewaterhouseCoopers in December 2011 suggested that during the year luxury sales in the country reached $15.5billion, a growth of a whopping 30% over 2010. They are expected to almost double to $27 billion by 2015, according to McKinsey.

Mindful of this audience, in 2005, Mao started a marketing campaign to create an idea he calls “new luxury”, which is targeted at China’s new generation of wealthy consumers. He believes that his customers care just as much about environmental issues as Western aesthetics when they’re looking to spend.

“I have been questioning the ‘luxury’ concept since 2005. I hope that our generation can give birth to the concept of ‘new luxury’, which focuses on the ecology of a product,” says Mao. “The establishment of a brand, at different levels, is in part related to the strength of a country and the quality of life that the people have. The value you have to add to that [to make it successful] has more to do with culture, and how you incorporate and deal with other world influences.”

To establish this “different form of luxury”, Mao paid close attention to the production process. Clothing is made from all natural materials, the use of dyes and colorants has been minimized, and the manufacturing process is conducted mostly through traditional techniques like spinning weaving and sewing.

He clearly believes that this approach is important to his customers. Mao’s eco-approach is not a new one. Luxury brands the world over have dabbled with it. Moët Hennessy Louis Vuitton (LVMH), for instance, bought a stake in organic clothing company Edun in 2009 and has since pledged a commitment to the environment. So how is Exception different? Rather than latching on to the concept once the brand had already achieved international fame, Mao made it a focus from the very beginning, so it is a thread that runs through everything the company does.

“The humanistic perspective is closely related to oriental values, this idea of a unity between humans and nature. This is the aspect we need to develop if we want to find our position amongst the top luxury brands in the world,” says Mao.

The fashion scene in China is becoming increasingly vibrant with young designers who have the education and freedom to experiment. It is hard to explain why Mao has become so successful despite sticking to “oriental” values.

Frye offers some clues. “If you look at the younger generation, you could say that they’re influenced by China, but they’re working from an aesthetic which is responding to Chinese culture. But then this is the age old question, what is Chinese in aesthetic terms?” he says. “Where does the work of this brand fit into the idea of developing a modern Chinese aesthetic (rather than a traditional one). I think that’s the question we (the fashion industry) are all engaged in.”

Exception debuted on the international stage in 2008. After several showcases at major fashion shows, including the Paris Fashion Week in 2007, it looked like Mao and his partner Ma were ready to take a Chinese brand on the international market.

But they chose to grow steadily in the domestic market first. “In the years since, we have been penetrating the Chinese market slowly, but steadfastly. The competition is very fierce, and every brand is out to profit from China,” says Mao. “Actually, it does not really matter where your battlefield is, but what mentality you take when you approach it. If you can build up the internal creativity of your company, if you haven’t purely followed, copied and imitated others, you have a global mentality that could succeed.”

Internal creativity is something that Mao takes seriously. He ensures that the education of his employees takes precedence. “We push our staff to interact with different ideas all the time. Our stores hold monthly lectures by different writers, artists and people in the design industry,” says Mao. By continuously stimulating his staff, he hopes that they’ll come up with new ideas to keep the designs fresh, as well as enjoy their working environment.

Mao is well aware that he has been lucky when it comes to homegrown competition. He was among the first to start out on the mainland, and many Chinese companies are still mired in the copycat mentality—imitating their more profitable competitors, rather than trying to best them. He knows that you can’t win at that game. Mao believes as long as he continues to pay attention to the cultural values of his home market, he’ll continue to be successful.

“China exports a lot of products, but not many of them are made by Chinese brands,” he adds. “In a country built on production, we need to be conscious of how our cultural values will influence the future of the industry.”

Mao is optimistic about the future of the Chinese fashion industry. “The development of the fashion industry began in London, and then Paris, Italy, the US and Japan,” he says. “Now it should be China’s turn.”

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