NEW YORK — The Council of Fashion Designers of America last month forged a five-year partnership with Suntchi Brand & Technology Co. Ltd., a full-service management company with offices in Shanghai, Tokyo and New York. Through the partnership, CFDA’s 500-plus members gain access to the Chinese market and an opportunity to take advantage of Suntchi’s network of business partners in China.
Here, Paul Fang, founder and chief executive officer of Suntchi, discusses via an interpreter what type of American brands are most desirable to the Chinese consumer and the potential of the collaboration.
WWD: Which U.S. brands would have the most commercial potential in China?
Paul Fang: For many years, China has been following what the world wants, but now they’re really into the streetwear brands. In China, the biggest consumer influence is coming from streetwear, and consumer lifestyle. There are a lot of approachable lifestyle brands coming in, without naming specific brands. It’s now slowly influencing China.
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WWD: Are you offering something that an American designer couldn’t do on his or her own?
P.F.: We humbly have to say that you don’t have to come through Suntchi, because that’s not what the collaboration is exclusively for. We want to basically have a platform with the CFDA. There are lot of companies, such as Tommy Hilfiger, that have a partner in China. This is for people who don’t have any idea or connection to China. Everybody has a different structure. We would like to set up a very open book, or manual, to serve as a platform of advisory. If you decide to choose us, you’ll have the most honest opinion and most honest advice for coming into China in the right way and right investor. We’re serving as an honest platform, just like CFDA does with their designers.
WWD: Is the appetite for fashion more at the designer level or the mainstream level?
P.F.: What does the Chinese consumer really want? China can be broken into six levels of cities, and each city is packed with groups of Chinese customers. There are people born in the Sixties, Seventies, Eighties and Nineties and there are the Millennials now. Each market, from territory one to territory six, has a different need. There are people who want to buy luxury. LVMH and Gucci did very well in China. Now business is coming from the Internet and online shopping. People were not used to that. They’ve created a different market for that. No matter what you’re coming into China for, whether you’re luxury or streetwear, you will make a lot of money. There’s a huge demographic on each level. There are about six levels of that. Each market has its own customer, and these customers spend up to billions of dollars.
WWD: Do they love American brands, or do they prefer European brands?
P.F.: For the last 10 years, the luxury brands have been booming in China. Chinese people have enjoyed and love European luxury brands. From the time when China was poor to now becoming the richest country in the world, when you have money you want to buy the most expensive stuff. There’s a movement to buy the most luxurious brands from Europe, from Chanel to Louis Vuitton. These brands make a lot of money in China. But these days, Chinese people have changed their understanding and how they spend their money. They really look at number one, it’s not what country it comes from, but what brand. They’re looking at the brand story, the brand product, they’re looking at the brand integrity and design, the materials and the fabrics. Chinese people are getting smarter. They’re not just looking that it’s from Chanel, and they’ll buy Chanel. What about other brands that have the same quality as Chanel, or it’s better than Chanel? It’s not mass-produced and it’s more limited-edition. Nobody else really has it. Chinese people have developed all sorts of different tastes. When you consider how many people we have in China.…Chinese people want authenticity and want something very special.
WWD: Are you planning to put American designers together with investors?
P.F.: In 2016, Suntchi went public. It went public to serve the Chinese market and Chinese consumer better. Will we invest in American designers? We could invest in a Japanese designer or a European designer. We’re looking to serve the Chinese consumer better. We also collaborate with Chinese designers to build a business strategy. Suntchi has a lot of business partners that have these abilities. Suntchi has its own company fund where we serve a platform where a lot of people within Suntchi’s companies are a partner. We are a service platform. We are the most visible platform for American designers. We want the world to know how visible we are.
WWD: Would there be deals to open brick-and-mortar stores, or are you thinking more of e-commerce?
P.F.: At the end of the day, we’ll look at each brand and figure out what each brand’s needs are. There are a lot of start-up brands, why not put them online? It’s better because there are more people shopping online than anywhere in the world. There’s the service. We have delivery. Tmall from Alibaba, they will deliver within an hour. There are a lot of platforms for young designers, even to be placed online, they will make more money.
WWD: Are you thinking about bringing U.S. designers to many Chinese cities or just the key cities?
P.F.: Number one, we will think about them for other cities. We have six levels of consumers. Each city has that. The main cities, Shanghai, Beijing, Shenzhen…..The potential cities that could be interested in fashion is over 100 cities. It’s a huge market that has not been touch or tapped. Now imagine, Suntchi and CFDA open this information, and serving as a visible platform for all these cities to know about these designers. They have a platform they can trust.
WWD: Does China have more of a casual or dressy lifestyle?
P.F.: The Chinese style of dressing and habits are very close to the American people. They know that for an event they need to dress up, for a low-key event they can wear jeans and T-shirts, and during their off time, it’s very casual and very lifestyle. Very J. Crew. The Chinese way of dressing isn’t European, it isn’t Japanese and it’s more like the U.S. There’s a really good level of parallels. We think the best collaboration would be the U.S. That’s why we chose New York and the U.S. Chinese men would never dress like Italian men, and Chinese women would never dress like French women.
WWD: Will Suntchi handle the marketing of the brands as well?
P.F.: Suntchi will match a reputable p.r. firm or agency with the right brand. Suntchi can serve as an advisory. We’re creating a voice. We want to make sure that the American people know that Suntchi is an important platform for an American designer. If an American designer comes into China, it’s not about finding the right partner, but finding someone who will give them the truth and the right advisory. We’ll put them with the best partners.
WWD: Does this partnership encompass women’s, men’s, accessories and children?
P.F.: Yes, and lifestyle.
WWD: When do you expect to do the first deal?
P.F.: The signing with the CFDA has been done. But it already started two years ago. We started with men’s fashion icon Nick Wooster in collaboration with FJ Jeans. We did a capsule collection for one year. It has more than 1,000 stores in China. We also collaborated with Opening Ceremony. We’re going to help them collaborate with a shoe brand called Daphne. Daphne will design a capsule collection with Opening Ceremony, and it will be sold throughout China and Opening Ceremony shops.
WWD: Will you handle the manufacturing of the brand?
P.F.: All the brands we’re talking to right now, they all have their own manufacturers in China. When we put the operation together, our job is to marry the brand and monitor the regulations.