There is strong demand for premium Australian fashion in China, but it can be hard for brands to enter the market on their own. A new website is launching with the promise to connect luxury Australian fashion brands with Chinese consumers. The platform is called Showroom-X and it already has buy-in from some of Australia’s most successful designers, including Christopher Esber, Kym Ellery and Aje duo Adrian Norris and Edwina Forest. While a VIP version of the website launched just last week, t
week, the concept has been years in the making, according to co-founders Richard Poulson, who is also the CEO of women’s fashion brand Morrison, and Kelly Atkinson, who has held various roles in luxury fashion across Sass & Bide, Hugo Boss, RM Williams and Louis Vuitton.
For Poulson, it all started on a trip to Beijing Fashion Week with a group of Australian fashion brands four years ago.
“That sparked an idea to take a collaborative approach to bringing premium Australian brands to China,” he told Inside Retail.
Poulson went so far as to put a business plan together, but he shelved it to focus on Morrison’s expanding bricks-and-mortar business.
Meanwhile, Atkinson had landed on a similar idea after her experience working at Sass & Bide in the early 2010s. She had become the brand’s top sales assistant in New South Wales largely due to a single Chinese customer who spent $250,000 a year on clothes that she was sending to friends and clients in China. The term ‘daigou’ is familiar to many in the retail industry now, but back then, the behaviour wasn’t as widely recognised.
“I was like, ‘hold on a second’,” Atkinson said of the moment the penny dropped. She realised that demand for Australian brands in China was enormous and mostly untapped because of the investment required to enter the market.
“At the time that Richard was having these thoughts around China, I was thinking the same thing from a sales perspective, where collaboration made sense to try to share the licencing fees and other costs that make it really inefficient for one brand to try and enter the market,” she told Inside Retail.
But their ideas remained just that until Poulson and Atkinson met a few years ago. When they realised their shared vision, it was simply a matter of getting the funding together – Western Australian entrepreneur Marylyn New is behind the venture – and pitching designers.
“I thought getting the brands on board would be the hardest stage, but in actual fact, it was really easy,” Poulson said.
It turns out that the promise of a more cost-effective way to reach Chinese consumers is appealing to many Australian designers.
When Richard Poulson and Kelly Atkinson met, they realised they had independently come up with the same solution.
This isn’t exactly breaking news. Over the past 10 years, China has accounted for 38 per cent of growth in the global fashion industry, according to McKinsey’s latest State of Fashion report. In the luxury segment, it has played an even bigger role, accounting for 70 per cent of growth since 2012.
But the path to success there can be elusive, McKinsey noted. British brands ASOS and New Look are just two recent examples of businesses that have retreated from China. Others, such as Burberry and Dolce & Gabbana, have run into trouble due to ill-advised advertising campaigns.
Prior to launching, Poulson and Atkinson sought advice from consultants at L Catterton Asia on how to avoid some of the common pitfalls. This informed their decision to initially target Chinese consumers residing in Australia before tackling those in mainland China, and to focus on women’s fashion, accessories, beauty and items for the home before eventually adding menswear to the mix.
“It’s really about proving the case in this market and oiling the wheels, because when you go to China, you have to operate at such a scale that if the foundations aren’t laid right, as you grow exponentially, the cracks become bigger and bigger,” Atkinson said.
As you might expect, the website is navigable in English and Simplified Chinese. It was designed not only to be mobile first, but also to support the way people swipe on their phones in China.
The brand mix and product range were selected based in part on findings from Kung Fu Data, a specialised consultancy that analyses Chinese social media platforms, e-commerce sites and other sources to identify the most in-demand brands, products and colour palettes. Although Poulson said he and Atkinson also used their common sense.
“You know the brands that stand the test of time, that have a story and beautiful product,” he said.
Showroom-X offers luxury items from local labels like this leather jacket from Aje and cotton dress from Esse.
Trickier to navigate was the challenge of catering to a primarily Chinese audience without making them feel pigeon-holed. Poulson and Atkinson said their ultimate goal was to create a luxury platform that anyone would want to visit.
“When I’m doing the buy, I have that customer in mind, so I’m looking at fabrications, silhouettes and lengths that I know will work with that demographic, but I’m also looking at the wider consumer in Australia,” Atkinson said. “It’s the best of Australian brands.”
Currently, there are 34 luxury brands on the platform, including Morrison, Aje, Ellery, Lee Mathews, Romance Was Born, RM Williams, Dinosaur Designs and Beauty Department, among others. They provide the inventory, while Showroom-X provides the infrastructure and marketing activities. There also plans for offline events, as coronavirus restrictions allow.
This story appears in the August 12, 2020, issue of Inside Retail Weekly.