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Indie & All the Rage: How Niche Shoe Brands Are Conquering the Chinese Market

Last updated: 04-15-2019

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Indie & All the Rage: How Niche Shoe Brands Are Conquering the Chinese Market

Ask any wealthy Chinese millennial what’s in their shoe closet, and chances are, they’ll mention Balenciaga, Off-White and Gucci. Then they’ll drop names like Keen, Simon Miller and Malone Souliers — all much smaller boutique players in the industry.

The Asian luxury retail market has been undergoing a radical transformation in recent years, moving from name-based consumption to distinctiveness-driven shopping.

Behind the shift is a new generation of consumers: They’re young, globally minded, digitally educated and interested in superior goods, though not as a symbol of wealth and status but as a signifier of taste and savviness. Within this new landscape, niche labels have become the latest, hippest buzzword.

China is the largest case in point. The country, which has been steadily powering luxury spending for much of the past decade (despite the economic headwinds of recent years) has perhaps seen the most significant change in the market. Unlike the demographic that preceded them, Chinese millennials and Gen Zers are less loyal to traditional brands and increasingly more interested in exploring labels that will make them stand out, as reported by consultancy Bain & Co last year. To that end, indie styles and designers are getting most of their attention, especially for shoes and accessories.

“There is a strong sense of self-expression among younger Chinese consumers,” said Sara Wong, director of merchandising at Hong Kong-based Pedder Group, the accessory and footwear specialist within the Lane Crawford Joyce Group. “The feedback we get the most is that they want something unique, exclusive, but without compromising on quality and craftsmanship.” High-end boutique labels meet all those requirements.

Wong added, “Though house brands still represent a large percentage in the Chinese market. Our performance from the past two seasons shows that our customers are yearning for niche brands. ‘Uncommonness’ is the new luxury.”

Which is why in January, the high-end retailer launched Studio, an online and offline showcase of emerging, contemporary and limited-edition shoe and accessory labels. Among the selection are Mercedes Castillo, By Far, Neous, Cult Gaia and Aeyde, to name a few. All of them are performing exceptionally well, according to the Pedder Group.

“Their styles are very relevant, and their products are European-made, but at a very competitive price point.” Wong said. “They offer a high value proposition for customers.”

Lee Folland, research director at Reuter Communications, an Asia-based integrated communications agency helping luxury and premium brands connect with Chinese consumers, describes the resonance of niche shoe brands as a quest for a new kind of priceless exclusivity. “[Buying less obvious names] shows the wearer not only knows quality but has also access to pieces others don’t,” he said.

Since its establishment in 2014, British brand Malone Souliers has come to encapsulate that desire for exclusivity. Known for standout stilettos and inventive twists on classic pumps, mules and flats, the label caught the attention of China’s trendsetters well before it officially entered the market in 2017. Wealthy Chinese travelers have been making mandatory stops at its appointment-only showroom in London (often without appointment) since the brand’s early days — a result of word of mouth and a strong presence on luxury e-commerce platforms like Farfetch and Shopbop.

Founder and creative director Mary Alice Malone attributes that success to an aspiration toward being different. “Younger consumers are looking to newer brands rather than the traditional luxury conglomerates for designs that set them apart from the crowd,” she said. “I also feel that the rise of social media has played a really important role in opening up the space for the discovery of niche brands among the wider audience.”

Today, the brand has a healthy business in China as well as Hong Kong, Singapore and Japan, where it’s carried by both high-end department stores and multibrand boutiques. “Asia has always been a key market for us,” said Malone. “We have fantastic and very supportive retail partners who play a large part toward our continued growth within the region.”

For Luisa Krogmann, co-founder of Berlin-based Aeyde, the demand from China — and increasingly the region at large — came as somewhat of a surprise.

The brand, founded in 2015 by Krogmann and Constantin Langholz-Baikousis as a digital-first venture, was picked up early by a buyer at Pedder Group. “Our collection was tiny, with like 20 styles, compared to what it is today, with 120 SKUs,” Krogmann said. “We built the brand as a direct-to-consumer business with a distribution focus on Europe. Normally, we approach new markets quite strategically, but for China, we did not. The success we encountered came fully unexpected.”

Indeed, the brand is one of the most highly coveted among hip, sophisticated Chinese shoppers. “Our subtle branding is well-perceived by the Chinese customer,” Krongmann said. “I also believe our retail approach plays an important role — we are only working with carefully selected stores like Lane Crawford or Net-a-Porter.”

Aside from high fashion, the recent popularity of the Uneek shoe by Portland, Ore.-based outdoor brand Keen is another testimony to the power of niche across China and Asia.

In an interview with Hong Kong newspaper South China Morning Post, Joe Colistro, Keen’s head of business development in Asia-Pacific, said people in Japan, South Korea, Taiwan and Hong Kong like the woven sneaker “because they are willing to wear quirky items and care about putting their outfit together.” Since its launch three years ago, 35 to 40 percent of Uneek sales have been in Asia.

While today’s consumers are notoriously fickle, experts predict that this trend among Asian shoppers will last. “The era of opulence is over,” Krongmann said. “People spend their money for products that make them stand out from the masses. The customer doesn’t want what everybody has. It is a lot about individual dressing and styling, which opens lots of opportunities for new, interesting products in all categories.”

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