China International Consumer Products Expo Signals the Arrival of Consumption Recovery. Fosun’s Approach to Ride on the Momentum of Consumption Recovery
Fosun, which is participating in the expo for three consecutive years, is bringing more than 20 brands from its tourism, fashion, jewelry, cosmetics, liquor and spirits, sports and entertainment sectors to the CICPE this year. In recent years, Fosun has been accelerating its focus on its core businesses in the household consumption sector. Driven by the two core growth engines of global operations and innovation, Fosun has continued to work on its development plans around the needs of global families. The CICPE shows that a new round of consumption recovery may have already arrived, and new consumer trends have also emerged. How will Fosun, which has many world-renowned brands and IPs, leverage its strengths to ride on the momentum?
Deepening global operations, core businesses in the household consumption sector usher in a period of rapid growth opportunities
Although the pandemic has had a certain impact on the domestic economy, the general trend of consumption upgrading has not been reversed, and the key to consumption upgrading lies in the improvement of quality and style. According to the recently released Kantar China Consumer Attitudes Report for the first quarter of 2023, compared with December last year, consumer’s demand for product quality have not decreased with budget savings, and the proportion of consumers who prioritize quality has increased significantly. Among them, vacation has become a category that domestic consumers are willing to spend more on.
At Fosun’s booth in Hall 5 of the fashion lifestyle exhibition area of the expo, the two international resort brands under Fosun Tourism Group (FTG), Club Med and Atlantis Sanya attracted many visitors.
It is understood that Club Med from France is a global leader in premium “all-inclusive” holidays with a history of more than 70 years. It currently operates nearly 70 resorts on six continents around the world. After nearly eight years of profound operations by Fosun, Club Med has achieved considerable development in the global market, especially in China and the Asia-Pacific region, with customers from more than 35 countries and regions. In the face of the recurrent outbreak of the COVID-19 pandemic in 2022, Club Med still opened seven new resorts, providing sufficient impetus for the strong rebound in tourism demand in the post-pandemic era.
It is worth mentioning that Club Med innovatively launched the Joyview brand in China, focusing on the demand for short-haul suburban holidays within a three-hour drive from major cities. During the pandemic, it has accumulated a large number of fans due to its premium, flexible, and high-degree of freedom product features. Club Med currently operates nearly 10 resorts in China, and plans to open three new resorts by the end of this year, including Nanjing’s Xianlin area, Taicang as well as Chengdu’s Heilongtan town.
Atlantis Sanya, as a phenomenal tourism destination, has become the benchmark for Hainan Tourism 3.0 upgrade. Since its opening in 2018, the resort has received more than 20 million visitors in the past five years. The constantly launch of new IP activities makes it a must-visit holiday destination for many families every year. This year, Atlantis Sanya centered on the two core strategies of “entertainment hub for families and global dining destination”, and continued to iteratively update products with better multi-dimensional business linkage, such as the 5th Anniversary Pink Night Celebration, customized fireworks shows, the introduction of the century-old restaurant Songhelou and the month-long 5th Anniversary Super Shopping Festival.
The results announcement released by FTG last month showed that Club Med and Atlantis Sanya both ushered in auspicious starts in the first two months of this year, reflecting the “retaliatory rebound” of tourism consumption demand in the post-pandemic era. The seven-night occupancy rate of Club Med resorts in China continued to rise during the Spring Festival holiday, and the occupancy rate of many resorts exceeded 90%, the total business volume doubled compared with the same period in 2022, and surpassed the same period in 2019 by about 30%. Atlantis Sanya recorded a business volume of RMB400 million in the first two months of 2023, with an average room occupancy rate of 96%, and the business recovery continues to improve.
Fashion consumption is rapidly returning in tandem with tourism and vacation consumption. On the one hand, with the complete removal of travel restrictions, the release of social and business demands has driven the rapid growth of consumer goods such as cosmetics, apparel and jewelry. On the other hand, with the popularity of the Internet, the fashion consumption threshold of Chinese consumers is getting higher and higher, and personalization and diversification have become a major trend in fashion consumption.
In the fashion consumption segment, Fosun is bringing brands including Lanvin, a French couture house with more than 130 years of heritage, St. John, a California-based classic women knitwear brand, Sergio Rossi, an Italian luxury footwear brand, Wolford, an Austrian luxury skinwear brand, Djula, a French designer jewelry brand, AHAVA, an Israeli skincare brand, and WEI, a high-end Chinese herbal skincare brand to the expo.
The Lanvin brand was reborn after joining Fosun in 2018. Its operating parent company, Lanvin Group, is one of the fastest growing companies in the global luxury goods industry. For the full year of 2022, Lanvin Group achieved unaudited revenue of EUR425 million, representing a year-on-year increase of 38%, of which the revenue of its flagship brand Lanvin increased by 67% year-on-year. Its business in Greater China still saw a 13% revenue growth despite the pandemic. The brand has also gained significant appeal among young customers. On 15 December 2022, Lanvin Group was successfully listed on the New York Stock Exchange, accumulating momentum for a new round of development.
Xu Xiaoliang, Co-CEO of Fosun International and Chairman of FTG, said, “The three-year pandemic has hindered some consumption, but people’s pursuit of quality lifestyle has never stopped. High-quality products and brands are the foundation to win out the cycle. Now that the recovery cycle has begun, Fosun will give full play to its strengths in the world’s top IPs such as Club Med, Atlantis Sanya, and Lanvin, to seize the recovery opportunities, and promote the upgrading of domestic consumption.”
Focusing on oriental lifestyle aesthetics, leading the rise of Chinese local consumer brands with innovation
At the beginning of this year, the Yuyuan Garden Lantern Festival held by Yuyuan, a subsidiary of Fosun, in celebration of the Year of the Rabbit became a trending topic on domestic and foreign social media. Inspired by Shanhaijing, also known as the Classic of Mountains and Seas, a famous Chinese legend consisting of mythical figures and stories, the 52-day lantern festival attracted more than 4 million visits. The rabbit lantern launched at the lantern festival was highly sought-after by many visitors.
In recent years, the consumer trend of China-chic has continued to gain steam. Through iterative upgrading, some time-honored brands have won the favor of young consumers by virtue of their novel design, national charm and high quality. A relevant survey showed that as of 2021, the market size of the China-chic industry reached RMB1.25 trillion.
At this year’s CICPE, a number of Chinese time-honored brands and innovative domestic brands under Fosun are participating in the expo, focusing on “oriental lifestyle aesthetics” to seize opportunities of consumption upgrading. Laomiao, a China-chic gold jewelry brand is presenting jewelry pieces from the Weiding Love series, Guyun Peace series, and Laomiao Youque series. Shanghai Watch is presenting a limited-edition watch in collaboration with animation “The Monkey King: Uproar in Heaven” produced by Shanghai Animation Film Studio. Shede Spirits is presenting a number of international spirits award-winning products, including Wisdom Shede, Tunzhihu (sauce-flavored), and Shede Classic at the expo.
Among them, Laomiao’s Peace series was launched in December last year. With the deconstructive design that integrates Chinese and Western styles, the series successfully boosted the sales of the Laomiao Guyun Gold series to exceed RMB5 billion in 2022. As for China-chic wedding gold jewelry, the Laomiao Youque series heavily influenced by Chinese culture represented by the oriental lifestyle aesthetics from the three dimensions of exoticism, Jiangnan style and the golden ages of the Han and Tang Dynasties has achieved a sales of more than RMB230 million across all channels since its launch in July 2022.
In addition to product innovation, Fosun also harvested a large amount of scarce resources last year. The Yuyuan consortium won the rights to a plot of the Yuyuan Fuyou Road in the core area of Huangpu District, Shanghai, which will connect Yuyuan Tourist Mart, Bund Finance Center and the second phase of Yuyuan project that is about to start construction to form the Grand Yuyuan. The establishment of Grand Yuyuan will serve as a concrete demonstration of Oriental Lifestyle Aesthetics and a global fashion and cultural showground.
It is worth mentioning that, as the chairman unit of the Shanghai International Fashion Federation (SIFF), Fosun also cooperates with the member units of the SIFF to showcase the fashion charm of oriental lifestyle aesthetics to the world through various forms. On 10 April, following the “The Elegance of China: Qin, Qi, Shu, Hua” opening show of the first fashion week at the CICPE last year, GRACE CHEN, the vice president unit of the SIFF showcased “The Splendor of Chinese Literature” collection at the opening show this year, using literary imagination to interpret contemporary oriental aesthetic fashion.
Market analysts believe that in the past two decades, with the acceleration of economic globalization and the deepening of China’s opening-up, countless overseas brands have entered the Chinese market, and a great number of local brands have also expanded into global markets. However, it is not easy for a brand to gain recognition from global consumers. Global brands have become the goal pursued by thousands of companies by virtue of their consumer recognition, business premium, and ability to win out economic cycles. For that reason, Fosun’s well-known brands and IPs with global operations are especially valuable, and will also become the foundation for Fosun to win out economic cycles and return to the trajectory of rapid business growth.
“After 30 years of development, Fosun’s positioning as ‘a global innovation-driven consumer group’ and its mission of ‘serving one billion families worldwide’ have become very clear. Focusing on the consumption needs of families, our businesses have grown steadily. We always believe that people’s aspirations for a happier and brighter life and the fundamentals of China’s long-term sound economic growth remain unchanged regardless of the external situation. In the future, Fosun will continue to strengthen innovation, deepen global operations, and refine more good products and services in the hope of creating happier lives for families,” Guo Guangchang said.
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