Monday, September 03, 2007

The next bespoke frontier: China

This AskAndy thread on Henry Poole's recent expansion into mainland China has ruffled more than a few feathers. I have a different perspective. Assuming the original post is genuinely representative of Henry Poole's activities, I think the objections raised in the thread are rather missing the larger point. There are in fact emerging trends in supply and demand for bespoke clothing that make Poole's activities in China (as well as Kilgour's and Davies & Son's) quite justifiable and even savvy.

Consumer demand and growth. China is one of the fastest growing luxury goods markets in the world. According to this excellent Wharton article, China is already the third largest luxury goods market globally. China's growth will most likely follow the American model of postwar growth - middle-class driven and consumption-oriented. When the economy matures fully in the next two decades, it will probably be the largest market not only for luxury goods but for a wide swath of goods and services. Here are some numbers to think about. Currently, there are 400 million middle class consumers in China. The Chinese middle class alone exceeds the gross population of the US and that number is growing by 20-30 million per annum.

Replicating the supply chain - go for the trifecta. Skilled tailors are in short supply across mature industrial economies, especially Europe and the US. Let's not get into the reasons for this shortfall, except to say job expectations among the young in the workforce have shifted elsewhere. Where in the world are people willing (and eager) to learn a labor intensive skill? Ah yes, that would be China. Of course, there are cost efficiencies to be gained by locating in China. But the smart move for a tailoring firm would be to take advantage of all three factors: the available skilled labor pool, low wages and a potentially massive local market to fund growth and operations.

For example, Davies & Sons is behind this Anglo-Chinese effort to transfer Savile Row production methods to China. Although the pictures of their joint training workshops are interesting, even more intriguing is the fact that bespoke tailoring is part of an artisanal tradition as depicted by this tailoring museum in Ningbo. Given the right mix of trainers and tradition, I think it's quite possible for Savile Row techniques to be transplanted successfully.

In summary, if I were a Poole (or Kilgour, etc) director, I would most certainly have a China strategy, both for supply chain reasons and medium to long-term growth opportunities. To not have one would be very short-sighted.

Update: Interestingly enough, Sartoria Partenope, a Neapolitan RTW brand, is opening up a store in Beijing according to this AskAndy thread. Opportunity is knocking, as they say.

Additional links
- Wharton article on China's recent quality woes and the idea of quality fade
- An AskAndy thread on the apparent oxymoron of Chinese luxury goods

No comments: