Business Insights ||Thoughts on Rick Owens’ trip to China.

To seek reasonable scale, pioneer brands need a clear understanding of their own roles.

The fashion market has entered a chapter where the niche is the public.

Last week, fashion designer Rick Owens, his wife Michele Lamy, and their friends Fecal Matter and his wife were asked to leave by staff due to a dispute over their attire while visiting a tourist attraction - Beijing Forbidden City, sparking widespread discussion on social media.

Rick Owens is one of the most noteworthy designers and artists in contemporary design. His brand style is unique and is hailed by the industry as a model of 'uninhibited, dark and futuristic'. His brand, along with its accessories and furniture lines, has generated hundreds of millions of dollars in sales worldwide.

The reports on this incident tried to highlight the contradictions because of their different positions, but in fact they did not set off substantive confrontation. Looking at the macro background, from last Saturday’s massive Moncler Genius event, which became a typical example of Shanghai’s debut economy, to Kanye West’s two concerts in Haikou last month, to fashion designers, celebrities and corporate executives including Rick Owens, Kiko Kostadinov, etc. Despite the China trip in the past few weeks, the current mainstream market atmosphere is obvious.

Rick Owens' China trip was originally an event that attracted the attention of loyal fans and industry insiders. However, the above-mentioned episode brought widespread attention to Rick Owens, and instead became a metaphor for the current market, that is, niche culture is being seen by more and more people.

When Moncler opens 8,000 event quotas not only to fashion opinion leaders and practitioners, but also to the public, this further proves the flattening of the market.

The so-called niche culture has become a real large-scale business in the past few years.

After Virgil Abloh predicted the death of the street in 2019, the fashion market and men's fashion entered a period of sluggishness. This chaos combined with the impact of the epidemic on the consumer market has drastically worsened the survival conditions of fashion brands.

But even under such circumstances, facing the generally difficult men's clothing business, in the past few years, many brands have achieved a leap in status in a market where men are the main consumers, and have completed their recognition in the huge Chinese market. These brands include Rick Owens, Maison Margiela, Chrome Hearts, enfants riches déprimés, etc.

In most cases, the above-mentioned brands even lack the basis for being arranged side by side, because these brands have completely different backgrounds, development histories, and sales channels. For example, Rick Owens, founded in 1994, had already been adopted by Hong Kong fashion trends about 15 years ago. It is regarded as a representative of the dark pioneer designer brand, but its development has suddenly accelerated in recent years. It has remained independent and has not sought investment. The brand has self-operated stores and a large dealer network, and its stores in China are operated by I.T Group.

Maison Margiela was originally a designer brand that emerged from the high fashion world in the 1990s. It has started a commercialization process in recent years after being acquired by Diesel parent company OTB Group. Currently, former Dior designer John Galliano serves as the creative director. The brand retains the wholesale business of dealers and has begun to accelerate the expansion of offline direct stores in the past two years.

As for Chrome Hearts, which was founded in 1988, it has always been outside the mainstream and has long-standing staunch believers. However, in recent years, it has suddenly gained a large number of young Chinese consumers. The brand has a network of self-operated stores but partners with Intime to open stores in the Chinese market.

Enfants Riches Déprimés, which was only founded in 2012, is a little bit abrupt to be placed among them, but the fact is that in the past three years, the brand has become one of the most discussed brands among male fashion enthusiasts. Except for its Paris store, its sales channels rely almost exclusively on wholesale business.

Also conquering male consumers is Balenciaga, which has been managed by creative director Demna for the past ten years. Although Balenciaga has existed as a luxury brand for 105 years, it took nearly ten years for male consumers to really start paying for it. Balenciaga has also single-handedly led the trend of subculture in the mainstream luxury market.

The above-mentioned brands may not be comparable in mature European and American markets, but interestingly, they are regarded as parallel consumption choices in the eyes of Chinese consumers.

What they have in common is that within the same period of time, they have achieved a surge in awareness and business scale among Chinese customers. In addition to the domestic market, Chinese consumer groups distributed around the world have contributed business to these brands that far exceeds digital records.

According to market estimates, Owenscorp, the parent company of Rick Owens, had annual revenue of about $140 million last year.

Maison Margiela's sales exceeded US$100 million as early as 2015. Although the parent company OTB did not disclose sales, it said that the brand's sales doubled in three years from 2019 to 2021.

Chrome Hearts has not released performance data, but sources said that the founding family had previously sold 10% of its shares for US$150 million, meaning that the overall brand valuation exceeded one billion US dollars.

According to another source, the young brand enfants riches déprimés relies on the promotion of loyal fans, and its annual sales have exceeded 10 million euros.

For the Chinese market, where the fashion business market has a short development time, the Internet has leveled brands with different backgrounds, and consumers will regard brands they know at the same time as alternative options. These brands may not have started at the same time, but they reached consumers at the same time.

At the same time, different from the clear distinction between direct-operated brands, distribution channel designer brands, and e-commerce DTC brands in foreign markets, the buyer and purchasing agent ecology that Chinese consumers rely on is independent of visible offline stores. Consumer purchasing needs have also brought different types of brands together, forming an unexpected competitive landscape.

Since the restrictions of independent buyers are much smaller than those of shopping malls, e-commerce platforms, and even buyer shops with clear concepts, they can flexibly pursue popular brands, which indirectly promotes the distortion of the boundaries between niche and mass. This also allows niche brands to have higher visibility in the market, and also captures the market share ceded by many mainstream brands.

Rick Owens is a typical example. The reason why the Rick Owens team's trip to China has received unprecedented attention is closely related to the popularity of the brand and the increase in business in the past few years.

And its jump is the result of the comprehensive effect of style ecology, industry environment, trading platform, etc.

From the perspective of Rick Owens, it has built a more stable supply chain and business structure than many designer brands over the years. In addition to dealers and boutiques, it has also opened stores of a certain size. This allows luxury consumers to look for alternatives without losing too much product and service experience. Compared with unstable avant-garde designer brands, mature brands such as Rick Owens provide a certain sense of consistency and trustworthiness, finding a balance between originality and commercialization.

To seek reasonable scale, pioneer brands need a clear understanding of their own roles. Rick Owens once said frankly in an interview with T Magazine, "The conservatism that dictates will never disappear. The world is both ugly and bright, and my role is to maintain some kind of balance.

In addition, the rise of Rick Owens is actually inseparable from the improvement of content and trading platform ecology. In addition to offline stores, it is also the rapid maturity of Xiaohongshu, Dewu and Xianyu platforms in the past few years. For such religious brands, the identities of consumers, buyers and communicators often switch flexibly, forming a mature transaction chain and an invisible force that promotes brand growth.

This also echoes the special consumer psychology in the Chinese market. Consumers often regard consumer goods as investment products. They not only consider personal preferences, but also comprehensively evaluate market resale prices, brand public opinion performance, etc., thereby promoting the formation of hot products and making out consumption behavior.

Taken together, the impact of China's consumer market on global fashion brands goes far beyond what is visible to the naked eye. It is not just the cliché of digitalization, but also exerts influence from the early stages of the brand life cycle.

There will be no difference in the path of designer brands in the future. It does not matter whether they are academic or social. Different types of brands can be placed on the same level for comparison at any time. This will undoubtedly completely disrupt the traditional competition landscape in the European and American markets.

However, this is exactly why it is necessary for foreign creatives to visit the Chinese market. As long-term consumers of cultural products, Chinese consumers are the backbone of many global brands, but the creative side actually lacks understanding of their consumers.

Whether it is the Chinese consumers who have been listening to Kanye West for more than ten years and bought a large number of Yeezy coconut shoes before meeting him for the first time, or the Chinese consumers who are the main force in global luxury consumption, or the Chinese consumers who regard Rick Owens as their idol. Fans, their joy stems from long-term contact with the product itself and the Internet, but now they have begun to have higher expectations for close and high-quality communication with creatives.

It’s not a given that Chinese consumers know more about foreign brands than foreign creatives know about their main consumer markets.

This is why the Moncler Genius Genius City event last Saturday aroused widespread discussion in the country. Consumers can experience global-level event planning first-hand, rather than a sales-driven, reduced-dimensional version of local events. More importantly, Moncler has brought together dozens of creatives to present pure pioneering creativity to the general public who are not in the industry. In front of us, Rick Owens is also among the creative people this time, which means that under the right circumstances, today's consumers have a clear judgment and high acceptance of creativity.

In the dialogue between pioneers and the public, cultural collision is inevitable, but the collision is good for both creativity and business. It is a signal for the market to resume communication.

Being seen is the first step to niche expansion.