Published on: July 7, 2023
In the second instalment of After Hours from The Negotiation, our APAC business podcast, Jacob Cooke discusses LVMH CEO Bernard Arnault’s visit to China, Nike’s strong earnings report, and opening of Fender’s first-ever flagship store in Tokyo.
Check out the discussion above. You can also read the edited transcript below.
Welcome to a special edition of The Negotiation, a new quick-hitting bite-sized video series where we speak to WPIC Marketing + Technologies co-founder and CEO, Jacob Cooke, about the latest consumer tech and business stories from China and across APAC.
Jacob, good to have you. Where are you joining us this week?
Calling in from Beijing this week.
Beijing. All right. The first news item from this past week or so is the visit to China from Bernard Arnault, chairman and CEO of LVMH.
Tell us about why he was visiting, what he did while he was there, and your opinion on what the significance or impact might be.
Yeah, there’s some big significance. He visited all of the LVMH umbrella stores in Beijing, Shanghai, Chengdu, and Hong Kong. The Beijing stores are right across the street from the WPIC office. So we saw the big motorcade over there. He travels in style, that’s for sure. He has actually been here a couple of times over the time that we’ve had this office. So it’s not the first time we’ve seen him there.
I think it just really underscores the importance of China for LVMH and the luxury sector in general. Pre-pandemic China accounted for almost a third of global luxury spending. That slipped a lot during the pandemic, but in the last 6 months, when we’ve been reporting on 618 and coming out in terms of recovery, we’re starting to see luxury come back.
I think in their last earnings report, they said that the Chinese recovery lifted them by about 17% in Q1. That’s consistent with other luxury giants too. It really emphasizes how important the market is for them and their confidence in the market going forward.
There’s been a lot of CEOs — it’s not just been Arnaud coming over. Elon Musk was just here, Jamie Dimon, Tim Cook, all of a sudden the last couple of months.
Interesting. OK, let’s turn our attention to another global consumer leader.
Nike, the athletic apparel giant released its earnings report last week. What are your takeaways?
Well, they’ve certainly hired great data analysts at WPIC that have helped them. But they were falling behind local companies such as ANTA, and even Adidas had launched new campaigns and then we’re going ahead.
We worked very carefully with them to analyze the entire market and set strategy, especially for e-commerce and now they’re back to being number one.
They just reported for the quarter ending May 31st and revenue was up 8% globally and 25% year-over-year in China. So we’re getting big, big numbers here from some of the big brands now. And I think all of this sort of stuff in the media about that slow recovery is really starting to throw out.
Main takeaway, just a couple of them, number one sports brand on Tmall and 618 salesroom, double digits in the last 618. And that’s really tough because there are a lot of really big local brands that are really growing in the space. They’re aligning themselves in China being the global leader.
They’ve done some very cool things by bringing a lot of NBA stars to China this month. So, a lot of the stuff that they’re known for, they’re going back into what’s working. China is becoming the most important market for a lot of these global brands. And from all the numbers that we’ve seen after we came out of COVID and in March or April, China’s been by far the fastest-growing market for a lot of these brands.
Okay, quick jump across the water.
You were in Japan last week where you checked out the new Fender flagship store in Tokyo. Tell us about that experience.
It was fantastic. Having the opportunity to work with them has really been very special. The flagship store that opened up in Tokyo was amazing. There were so many artists there. I think it actually a better retail experience than even Apple has. I highly recommend going to check out that store if you’re ever in Tokyo.
And there are a lot of tourists from other countries around Asia that are going to go check it out. And we hope that actually, we’re going to see many, many more of them throughout Asia and maybe some in China too. So, hats off to the whole team. I know they just worked their butts off on that store and the finished product was just incredible.
All right, thanks very much. That’s it, everybody.
That’s our China and APAC in under five minutes as we promised. We’ll see you next week.
Thanks a lot.
Let's take the first step.