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Economy

In China, Hermès Takes Patient Approach To Capturing Rush For Luxury

Like its competitors, the French brand must contend in China with widespread counterfeiting, which can undermine the luxury label’s good standing. Finding the niche customers who spend everything on quality remains Hermès’ long-term strategy.

(kwanwoo)
(kwanwoo)
Yang Ting-Ting

BEIJING - It all started with a short phrase posted online by Pan Shiyi, the famous Chinese real estate developer: "I can't help thinking of Guo Mei-Mei when people talk about Hermès…"

Guo Mei-Mei is a young girl who has aroused a lot of controversy in China lately. On her own Twitter-like micro-blog account, she ostentatiously showed off her many brand name bags, before it was discovered that most of them were fake.

She also claimed to be the "General Commercial Manager of China's Red Cross," a position that does not exist, and happily caused a lot of trouble by exposing the organization's corruption.

The image of Hermès suffered a serious slide. It's a brand that has been regarded by high society as "the last noble house" among all top apparel houses.

Yet in China, Hermès, and in particular its symbolic Birkin bag, has become just a way of showing off one's wealth. In order to have a piece of the Birkin aura, women are willing to pay several thousand RMB (or several hundred dollars) just for a fake version, and this includes Guo Mei-Mei, the embarrassing self-appointed "ambassador" of the mark.

People often joke that the number of the bags in China far exceeds Hermès' total output production in France.

In September, Hermès held a big men's fashion release in Beijing. This is only its second event in the past three years. The site of the show was laid out smartly with light bulbs suspended from the ceiling giving the impression of being submerged in the wilderness under a sky of stars.

Visitors were free to enjoy close inspection of the watches, purses and cigar boxes, which resembled pieces of art. The brand has come to be known for being quietly classy, and always 100% hand-made. At a time when even an ordinary Chinese person can tell the difference between a Birkin and a Kelly, Hermès continues to produce a bag purchased by relatively few people.

In fact, none of the luxury goods displayed consider practicality as its main purpose; they are but accessories to highlight one's status.

Florian Craen, Hermès managing director for the north Asia region, agrees with this point: "There are many different kinds of clients. Some are discreet and cautious, some are high-profile. However, Hermès is not ostentatious or meant for those who like showing off. More obvious logos are more suitable for those showy kind of consumers."

It turns out that young people care a lot about what is on their shoulders. This is not just true in China, but all over Asia, where the youngsters fanatically worship luxury labels. Many fashion brands are obliged to come up with individual lines of products for young clients. Fashion magazines are also opening new pages dedicated to the youngsters' dress codes.

Up until now, Hermès has not deliberately catered to young consumers.

In Florian Craen's eyes, only older people will prefer quality to the pursuit of the latest trend. "What we do is quality, not fashion," he explained. "If one has not lived through time, one would not understand what quality across time means."

Read more from E.O.

photo - kwanwoo

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Green

China Can't Kick Its Coal Habit

China has endured two months of scorching heatwaves and drought that have affected power supply in the country. Spooked by future energy security, Beijing is reinvesting heavily in coal with disastrous implications for climate change.

The Datang International Zhangjiakou Power Plant shown at dusk in Xuanhua District of Zhangjiakou City, north China's Hebei Province.

Guangyi Pan and Hao Yang*

Two months of scorching heatwaves and drought plunged China into an energy security crisis.

The southwest province of Sichuan, for example, relies on dams to generate around 80% of its electricity, with growth in hydropower crucial for China meeting its net-zero by 2060 emissions target.

Sichuan suffered from power shortages after low rainfall and extreme temperatures over 40℃ dried up rivers and reservoirs. Heavy rainfall this week, however, has just seen power in Sichuan for commercial and industrial use fully restored, according to official Chinese media.

The energy crisis has seen Beijing shift its political discourse and proclaim energy security as a more urgent national mission than the green energy transition. Now, the government is investing in a new wave of coal-fired power stations to try to meet demand.

In the first quarter of 2022 alone, China approved 8.63 gigawatts of new coal plants and, in May, announced C¥ 10 billion (around $1.4 billion) of investment in coal power generation. What’s more, it will expand the capacity of a number of coal mines to ensure domestic supply as the international coal market price jumped amid Russia’s invasion of Ukraine.

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