On the heels of an exchange program that brought designer Uma Wang to New York last year for a six-week apprenticeship with established American counterparts, a leading US industry group has signed its first Chinese partnership with Shangpin.com, a high-end online fashion retailer based in Beijing.

The moves signal an ongoing desire of the Council of Fashion Designers of America to break into China's fashion market, which will account for about 20 percent of global luxury sales by 2015, according to consultant McKinsey & Co.

"We are thrilled to introduce Shangpin to our members and look forward to opening new paths for our designers into China," Steven Kolb, CEO of the designers council, said in a release. "During these exciting times, we will support the overall growth of American fashion into China."

Launched in 2010, Shangpin already offers a number of CFDA-recognized brands including Diane Von Furstenberg and Stuart Weitzman at full price for in-season styles, capitalizing on a business model that diverges from the last-season discount approach of most e-commerce sites.

The site's revenue totaled 200 million yuan (about $31 million) in 2011, and customer transactions now average $300, according to the privately held company. The company's name is a play on the Chinese characters for shang ("fashion"), and pin, which translates to both "taste" and "quality."

Shangpin, which has over 300 million "VIP members", will now support a wider selection of the 400 or so designers represented by CFDA in growing its business in China, particularly in second- and third-tier cities where luxury brands have yet to open stores.

E-commerce has become increasingly important in a country where even domestic companies have trouble reaching consumers outside major metropolises. Cities such as Nanjing, Shenzhen and Dalian have a growing middle and upper class of consumers who are eager to spend on luxury, so online shopping is a way to link them to brands, especially Western ones.

"We look forward to sharing our insights on the Chinese market with the members of the CFDA," said David Zhao, CEO of Shangpin.com. "China is a challenging market to enter because there are limited distributors to cover such a large geographical area. This is why e-commerce in China, much more than in the West, is the most effective distribution and marketing platform for designers who want to reach Chinese regions where traditional brick-and-mortar stores do not exist.

"Shangpin currently sells into more than 400 cities across China and has a pulse on the evolving Chinese consumer," he said.

The site offers a no-questions-asked return policy for a week after purchase and free FedEx delivery anywhere in China, with goods arriving in elegant black-and-gold shopping bags.

In an interview with Jing Daily, designer Tracy Reese (who dressed Michelle Obama for the US first lady's speech at the 2012 Democratic National Convention) said: "China's a market that we want to explore. We need to learn so much more to do it effectively. The site gives us great exposure to the market and Chinese consumer."

Online shopping transactions in China totaled 10.73 billion yuan in 2011, up from 6.36 billion yuan the previous year, and are expected to reach 37.24 billion yuan in 2015, according to iResearch. Boston Consulting Group said that 37 percent of Chinese respondents in a survey said they shop aspirationally, with the intention of "trading up"; only 17 percent of US respondents said the same.

But in China, where Western styles are still relatively new, many consumers need guidance in choosing how to spend their money, Zhao said. The site offers 24/7 customer service from fashion specialists who are well-versed in merchandising and personal style, according to the company. The site also spotlights celebrities including Jennifer Aniston and Victoria Beckham in its featured apparel.

"Compared to those from around the world, especially luxury shoppers from the USA and Europe, Chinese online shoppers need more coaching time in terms of interpreting the culture, the story of luxury and fashion brands, especially for emerging high-end brands," Zhao told CNN in 2011.

Although the CFDA declined to comment on its ongoing China Exchange program, Wang's stay in New York last summer was an attempt to build links between China and the US, Kolb told China Daily in 2012. The exchange was funded by Silas Chou, president and CEO of Novel Enterprises Ltd, a Hong Kong textile manufacturer. Chou is also co-chairman of Michael Kors Corp. Proenza Schouler's Jack McCollough and Lazaro Hernandez will visit Shanghai as part of the program, according to the CFDA.

"To succeed as a designer today, you can't think of boundaries anymore," he said. "Every designer is now saying 'China, China, China,' so for us [partnerships like these] are an opportunity to help bridge the US and China. It's about collaboration and mutual benefit."

kdawson@chinadailyusa.com

(China Daily 03/08/2013 page10)