LVMH’s Andrew Wu Talks ‘Next China’
Goodbye smog alerts, and hello reforestation and the world’s hungriest market for electric cars.
And forget about blunt, hard-sell livestreaming, and expect poetry, literature and other “cultural elegance.”
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Those were among the signposts of the “next China” described by Andrew Wu, LVMH group president of Greater China, at the WWD Global Fashion & Beauty Summit, hosted in partnership with Chinese retailer SKP.
In an entertaining address themed around blockbuster Hollywood films, Wu explained why China remains “Forever Young,” “Fast & Furious” and, at times, “Rocky,” stacking his presentation with statistics about everything from pet ownership to Chengdu’s burgeoning panda population.
“There are different generations of China, mainland Chinese in particular, and each generation is different,” he said, suggesting that the speed of change in the vast country occurs every half generation — or even faster. “We have the Cultural Revolution generation that has been very dominantly influencing the China development in the last 30 years, but we need to be really embracing the younger generation segments.”
Roughly 60 percent of mainland China’s 1.4 billion citizens are under age 40, with 15 percent older than 65 and the balance between those two age cohorts.
Some 201 million people were born in China between 1990 and 1999, 163 million between 2000 and 2009, and 173 million between 2010 and 2019, Wu said.
Echoing other speakers at the one-day summit, the executive touted Chengdu as home to one of the youngest, most fashionable and best-looking urban populations. “And I think they can rival any other international cities,” he added.
He flashed a slide showing about a half a dozen famous Chinese athletes from a variety of sports, each looking as if they were modeling in an activewear campaign for a famous brand.
China’s top rapper (MaSiWei), skateboarder (Xiang Li) and street dancer (Kai Yang) all hail from Chengdu, and “it’s influencing the whole country, not just the city,” according to Wu.
He noted that the coronavirus pandemic did not impede affluent young Chinese from pursuing studies abroad, with 180,000 students returning in the second quarter of 2020, at the start of the health crisis.
This year, an estimated 1.2 million mainland Chinese will study abroad, up from 835,000 in 2022 and 662,000 in 2021.
Wu said these numbers reflect the “continued determination of Chinese people for internationalization. This is a very important message that might get lost when the world is so divided, and we’re so burdened by geopolitical tensions.”
Pet ownership exploded during the health crisis, as in other countries, with cat ownership vaulting 48.1 percent to 44.1 million felines, while dog ownership increased 7 percent to 55 million.
Wu’s explanation for their preference? No need to walk cats.
The executive said new generations of Chinese are wholeheartedly embracing more ecological ways of living, and are projected to purchase 348 million “new energy” cars in 2023, up 35 percent versus last year. China’s share of global electric car sales reached 61 percent in the first nine months of this year.
Reforestation is thriving, and the population of pandas has more than doubled since 1980 to more than 2,350, enough to take the cute creatures — a symbol of China ubiquitous in Chengdu — off the endangered species list.
He described 2013 as the year Chinese awoke to the hazards of severe smog. Fast forward to the first half of this year, and the mainland’s main cities boasted that “good air quality days” occurred 82.3 percent of the time.
Cue a new wave of outdoor shopping venues, headlined in Chengdu by the mixed-use Sino-Ocean Taikoo Li Chengdu development and the new park-like, subterranean SKP mall, which is largely open-air and filled with fresh flowers and green spaces — not forgetting “some of the most fashionable young people in China,” according to Wu.
While shopping remains a popular pastime in China, Wu described a blossoming of cultural attractions, including modernized theater shows, sold-out concerts for Taiwanese pop stars, guided city tours and Chinese musicals, which boast a particularly strong female fan base.
This increased sophistication is reflected in livestreamed shopping events, which have rapidly evolved from transaction-based, bargain-hunting bonanzas to more nuanced selling sessions that prize emotional connections.
“This shows us that the landscape is getting more and more differentiated, reminding us that…we may not need to go after every one of the 1.4 billion people,” Wu said.
All that said, the executive stressed that China’s ascent as an economic power has hardly been smooth. While GDP per capita has improved from 10th place among developed nations in 1993 to second place by 2013, China’s GDP is still at 70 percent of America’s and per capita income stands at only $5,600 this year.
But Chinese citizens are world champions in preparing for rainy days, with the household savings rate standing at 43.5 percent, versus 20.7 percent in Germany and 4.9 percent in the U.S. That means some 14.42 trillion yuan are awaiting spending.
“The savings accumulated this year to date, by end of September, is equivalent to 110 percent of the entire China GDP of last year,” Wu marveled.
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