Over the space of 20 years, luxury changed enormously. The Japanese had been a set of new consumers for luxury, but in terms of numbers they hadn’t eclipsed the US as the biggest market for luxury.
China’s ascent into the WTO (World Trade Organisation) made a lot of business people and politicians a lot richer. China challenged the US in terms of luxury market size. On their rise, Chinese consumers changed a lot in their sophistication as they educated themselves on luxury consumption.
These new consumers picked up new traits such as wine drinking. This also meant that luxury goods became new asset classes as Chinese money looked to acquire only the best. Chinese culture in turn impacted luxury design. Chinese new year became more important than Christmas.
Then there was the second generation money. Young rather than old consumers. Consumers who were looking for something less formal, either because they didn’t wear anything but streetwear or they worked in the creative classes rather than the traditional professions and high finance.
The industry had traditionally avoided rap artists and R&B singers, now Jay Z and Beyonce are the face of Tiffanys and Fendi had collaborated with Rihanna.
They no longer wanted to have to wear a jacket and tie to have afternoon tea at the Mandarin. They took an eclectic look more attuned to the Buffalo Collective than Vogue Italia.
You had hybridisation with the street to create a new category of luxe streetwear in a way that also owes a debt to football casual terrace wear and the pain.
Now you have Zegna badge engineering approach shoes from alpine brand La Sportiva and Prada has done a similar thing with adidas’ iconic Stan Smith tennis shoes. Balenciaga with their Speed Sock looks like a mix between Nike’s flyknit football boots and the Nike Footscape sole.
Luxury has traditionally reflected status. Goods of a superior nature that the ‘wrong sort’ of people would never be able to afford. Luxury then became a symbol that you’d made it. In Asian markets, particularly China, luxury became a tool. People gifted luxury products to make relationships work better. It also signified that you are the kind of successful business person that partners could trust. You started to see factory managers with Gucci man bags and premium golfwear to signal their success. Then when the scions of these business people and figures in authority were adults, luxury has become about premium self expression.
Interesting trends interview that covers a lot of the issues influencing the interviewer calls the world of visuals. The world of visuals is considered to be influenced by everything from a desire for authenticity and video content to the metaverse. While the metaverse is immature (despite what you may here elsewhere), the effect on culture of the world of visuals will be more apparent.
I saw the impact of the web on graphic design way before I got to experience the web at college. The idea of the technology inspired (mostly wrong) cultural tropes. The move towards ‘b-roll’ video makes a lot of sense. The world of visual interview gives an insight to where Getty Images thinks that the world of visuals is going.
John Le Carré
I came across some amazing interviews with author John Le Carré. John is sadly no longer with us, but the video footage still feels very pertinent. Beyond the Karla Trilogy ofTinker, Tailor, Soldier Spy, The Honourable School Boy and Smiley’s People – I would also recommend Agent Running In The Field – which shows how well Le Carré still kept his finger on the pulse and was written as a riposte to Brexit. Brexit also persuaded Le Carré to change his nationality to Irish in the end, he died an Irishman.
Gucci x Palace
Following on from their collaborations with The North Face, Gucci has now collaborated with UK skate and streetwear brand Palace. Like Kim Jones over at Christian Dior, Gucci seem to be really on the zeitgeist.
Soviet oil
Asianometry has put together another great documentary. This time he focuses on how the Russian empire became an oil power. If you like John’s introduction to the subject area, I can recommend Daniel Yergin’s The Prize, as a Christmas read. This was required reading back when I worked in the oil and gas industry at the start of my career. Yergin covered the oil industry globally from 1850 to 1990 in this book and complements this introductory video to the subject.
Mid afternoon Sunday saw an incident outside and inside the Manchester Chinese consulate. The Manchester Chinese consulate caters for the second largest Chinese community in the UK. Manchester airport before COVID had direct flights to China and Hong Kong. Given the large British Chinese population in the area, it also has a community of Hong Kongers who desire democracy.
My understanding of what happened:
Chinese diplomats didn’t want a protest right outside the Manchester Chinese consulate
On the first day of the party congress at home in Beijing, some staff emerged from the consulate wearing anti-stab vests and riot police helmets to smash protestor banners and drive them away. Police were slow to intervene
Protesters defended themselves
The Manchester Chinese consulate staff retreated to their grounds including the Consul General who has been out walking.
A protestor was dragged through their gates and given a beating, he was eventually extracted by police belatedly reacting to the fight
The Consul General was seen pulling the hair of the protestor as well and later admitted it
johnlsl Extradition law Protest at Admiralty, Hong Kong 反送中大遊行(金鐘段)
Business
Pfizer Executive: in-Person Work Is ‘Critical’ to Workplace Culture – Nearly 2 years after the company helped to develop the Covid vaccine, Pfizer’s Angela Hwang said it’s time to get back to the office. Though many worked from home during the vaccine’s development, Pfizer’s culture was “banked” from years of in-person work, she said. Some companies have recently faced backlash for requiring in-person work. – Not so sure how well this will go for them.
We want food, not PCR tests. We want freedom, not lockdowns. We want respect, not lies. We want reform, not a Cultural Revolution. We want a vote, not a leader. We want to be citizens, not slaves
I know that the Elvis memorabilia dropped massively in price as his fans went into care homes or died off. Antiques and art go through cycles of ‘what’s in’ and out for that matter. Doug DeMuro asks a similar question about car collecting baby boomers. A lot of this is down to cultural relevance for collectors. DeMuro notes that ‘brass era’ cars from the 1910s onwards have already seen declines in price and demands.
The Covid-19 Baby Bump: The Unexpected Increase in U.S. Fertility Rates in Response to the Pandemic | NBER – Childbearing in the U.S. among foreign-born mothers declined immediately after lockdowns began—nine months too soon to reflect the pandemic’s effects on conceptions. We also find that the COVID pandemic resulted in a small “baby bump” among U.S.-born mothers. The 2021 baby bump is the first major reversal in declining U.S. fertility rates since 2007 and was most pronounced for first births and women under age 25, which suggests the pandemic led some women to start their families earlier. Above age 25, the baby bump was also pronounced for women ages 30-34 and women with a college education, who were more likely to benefit from working from home. The data for California track the U.S. data closely and suggest that U.S. births remained elevated through the third quarter of 2022
Letter from Hong Kong Advocacy Groups: U.S. Financial Institutions’ Planned Hong Kong Summit Will Undermine U.S. Foreign Policy – executives will meet with sanctioned government officials including Chief Executive John Lee as they help Hong Kong convince the world that it’s business as usual in the city—that despite the authoritarian crackdown of the past three years, investors should return. This financial summit is more than just a conference: it represents a watershed moment in our fight to hold Hong Kong officials accountable and deter others across the world who might seek to snuff out democratic rights and commit human rights abuses. If the U.S. Government takes no action to prevent even its own banks from undermining U.S. policy with respect to Hong Kong, then it will send a message to the world that the U.S. does not intend to defend the principles it espouses. Investment will return to the city, and the Hong Kong government, the CCP, and other authoritarian regimes will learn that human rights abuses are easily forgotten by the West—especially when lots of money is involved
Global cities are fragile by nature. Here are some on their way down | Financial Times – China’s Communist party distrusts global cities. It’s crushing Hong Kong, and people are fleeing. When a marquee 800-flat project opened last month, zero apartments sold. Hong Kong, fifth on Kearney’s global-city ranking in 2019, is regressing into what some call “just another Chinese city”. Beijing and Shanghai, among Kearney’s top 10 last year, have also lost access to the world, supposedly because of quarantine restrictions. Last month, China averaged about 100 international flights a day, down 96 per cent since 2020, says Variflight. After this week’s party congress, these cities may become global again, or perhaps those days are over
Clarifying Responsible Cyber Power: Developing Views in the U.K. Regarding Non-intervention and Peacetime Cyber Operations – Lawfare – the U.K. government’s strategic communication about cyber has included prominent speeches by successive foreign secretaries and attorneys general, as well as by senior securocrats such as the GCHQ director. This division of effort in the public communication about U.K. strategy makes sense, incorporating senior political leaders with responsibility for foreign policy and the law as well as leading securocrats who, as career officials rather than politicians, speak with a different kind of authority and independence from partisan politics. Cumulatively, this helps to advance the U.K.’s emerging narrative about the responsible, democratic use of cyber power by nation-states. Fleming’s remarks also emphasized that the U.K.’s cyber operations were “ethical, proportionate and legal.” As a proponent of responsible state behavior in cyberspace, it is not surprising that the U.K. twice (in 2018 and 2022) has used a major speech by its attorney general to develop the legal aspects of the case for responsible cyber power
Former WSJ reporter says law firm used Indian hackers to sabotage his career – Solomon’s suit is the latest in a series of legal actions that follows Reuters’ reporting about hired hackers operating out of India. In June, Reuters reported on the activities of several hack-for-hire shops, including Delhi area-companies BellTroX and CyberRoot, that were involved in a decade-long series of espionage campaigns targeting thousands of people, including more than 1,000 lawyers at 108 different law firms. At the time, Reuters reported that people who had become hacking targets while involved in at least seven different lawsuits had each launched their own inquiries into the cyberespionage campaign. That number has since grown. Azima, Solomon’s former source, is among those who have gone to court over the alleged hacking. His lawyers, like Solomon’s, allege that Dechert worked with BellTroX, CyberRoot and a slew of private investigators to steal his emails and publish them to the web. BellTroX and CyberRoot are not parties to the suit and could not immediately be reached. Executives at both firms have previously denied wrongdoing. Solomon and Azima allege that Dechert undertook the hack-and-leak operation in the interest of its client, Sheikh Saud bin Saqr al-Qasimi, ruler of the Middle Eastern emirate of Ras Al Khaimah. Reuters has reported that lawyers for Ras Al Khaimah’s investment agency – RAKIA – used the emails to help win a fraud lawsuit filed against Azima in London in 2016
American technology boosts China’s hypersonic missile program – The Washington Post – “In this case the American technology is superior — we can’t do certain things without foreign technology,” said one Chinese scientist who works in a university lab that conducts testing for hypersonic vehicles. “There isn’t the same technical foundation.” Some of the U.S. firms whose products are reaching Chinese military research groups have been the beneficiaries of Defense Department grants to spur cutting-edge innovation, according to a federal program database, creating the specter of the Pentagon subsidizing Chinese military advances. “It’s very disturbing, because the bottom line is that technology that can be used for military hypersonics was funded by U.S. taxpayers, through the U.S. government, and ended up in China,” – war by other means….
Interesting take on how Singapore will evolve with a transition of power happening in Singapore away from the Lee family who have dominated the city state since independence.
Taiwan
Really good presentation on the international importance of Taiwan. Its not just about TSMC but also about the global supply lines that run through Taiwanese waters
I wasn’t aware of Honey Badger Cummins until a couple of days ago. Cummins was a former professional rugby union player who managed to parley his career into work on television and a professional social media following. Nick Honey Badger Cummins had played 15 times for his country, including the international rugby sevens competition and for top flight clubs in Australia and Japan.
Following his retirement as a professional sportsman, he had appeared in a number of reality television show and gained a following as a travel influencer on social media. His travel influencer status, personality profile in Australia and former rugby sevens career were obvious points of interest for the Hong Kong Tourist Board.
Propaganda
The problem for Honey Badger Cummins is that he’s at the centre of Hong Kong’s campaign to remake its international image. This is after its COVID-19 isolation, 2019 protests with brutal policing actions, the national security law mass imprisonment, crushed media | civil society sectors and the large amount of Hong Kongers who have gone into exile. It isn’t perceived as a ‘straight tourism’ brief, but instead part of a white-washing exercise.
https://youtu.be/rWhrrbUj9Ws
The comments on this video are universally negative in nature at the time of writing this post.
Restaurants and other venues portrayed in the videos have closed down and Cummins flouts what would be now current masking regulations and QRcode health app tracking. This is due to the footage having been shot at the beginning of 2020. Even that timing shows a lack of good judgement by Honey Badger Cummins. But Cummins isn’t the only party to blame.
Poor judgement by Always Human
The Australian creative agency Always Human; which created the videos being used, should be ashamed of themselves in terms of their ethical stance. The content was originally shot in January 2020, when the brutal police crackdown was still fresh in the minds of the general public around the world. Its not a good look for the other agency clients like Asics, GoPro, HP, Nike, Oakley, Under Armour and Volkswagen to be associated with the agency.
Virgin Atlantic pulls out of Hong Kong after 30 years | Telegraph – Virgin Atlantic is pulling out of Hong Kong, scrapping flights and shutting its offices as strict Covid restrictions batter the island’s status as a global financial hub. Ending three decades of flying to Hong Kong, Sir Richard Branson’s airline blamed the closure of Russian airspace as well as the declining profitability of the route. American Airlines and Virgin Australia have also backed away from Hong Kong. I could see other airlines from Europe backing away from Hong Kong due to the disadvantage that Russian airspace provides to them versus Cathay Pacific
Luxury Daily | “A small, concrete happiness”: Why luxury brands in China love cafés – Facing weakening consumer demand, luxury brands are building experiential cafés across China to pursue new consumer touch points and growth areas – it reminds me of the ‘Revlon effect’. During recessions consumers who can’t afford big luxuries like small luxuries like a lipstick or a chocolate bar
Chinese mercenaries have been around longer than the belt and road. You can come across Chinese mercenaries protecting in the border areas of China such as the warlord regions of Myanmar. But now Chinese mercenaries are increasingly linked with the Belt and Road Initiative. China claims that it isn’t building an empire in Africa, across the former Soviet Union and Sri Lanka. Yet all of the private security companies that Chinese mercenaries work for are state owned. The Chinese mercenaries come out of the PLA, the PLAN marines and the PAP. That doesn’t mean that they are well trained or even well disciplined and they exist in a Chinese legal vacuum.
There is more connecting China to its empire with these Chinese mercenaries than there was for the army fighting under Clive of India for the East India Company a few centuries before. Task and Purpose goes into the subject of Chinese mercenaries in more depth.
Inside Missfresh’s hunt for investor cash ahead of collapse | Financial Times – probably one of the best comments on this article – Missfresh is only one of a number of Chinese domestic startups that sought US investors, as their own domestic private investors were unwilling to invest. For a Chinese investor, they always consider when and if the CCP may want a piece of the business, or worse take action against the promoters and management. for non performance. The lighter loss being financial and. the greater loss, life.
China’s Growth Sacrifice by Stephen S. Roach – Project Syndicate – Japanization of an increasingly debt-intensive, bubble-supported Chinese economy. An overly leveraged Chinese property sector fits this script, as does the debt-fueled expansion of state-owned enterprises since the 2008-09 global financial crisis. For China, this became the case for deleveraging, well worth the short-term price to avoid the longer-term stagnation of Japan-like lost decades. Finally, a major reversal in the ideological underpinnings of governance is also at play. As the revolutionary founder of a new Chinese state, Mao emphasized ideology over development. For Deng and his successors, it was the opposite: De-emphasis of ideology was viewed as necessary to boost economic growth through market-based “reform and opening up.” Then came Xi. Initially, there was hope that his so-called “Third Plenum Reforms” of 2013 would usher in a new era of strong economic performance. But the new ideological campaigns carried out under the general rubric of Xi Jinping Thought, including a regulatory clampdown on once-dynamic Internet platform companies and associated restrictions on online gaming, music, and private tutoring, as well as a zero-COVID policy that has led to never-ending lockdowns, have all but dashed those hopes – China was on a rocket ship that it couldn’t control, it is now trying wrestle back control at the expense of growth
Eurostar to axe direct trains from London to Disneyland Paris over Brexit | Eurostar | The Guardian – “We have taken the decision not to run the direct Disney service … in summer 2023,” it said. “While we continue to recover financially from the pandemic and monitor developments in the proposed EU entry-exit system, we need to focus on our core routes to ensure we can continue to provide the high level of service and experience that our customers rightly expect.” – not enough demand from the UK and too much hassle to run
In Myanmar, Vietnamese firms learn the political risks of backing the junta — Radio Free Asia – interesting that Burmese consumers are boycotting military-owned businesses including MyTel – a mobile carrier that VietTel has a major stake in. Also: Vietnamese firms have begun investing abroad, and, in particular, have sought a place in the 5G marketplace, especially in markets where there is residual fear of China’s communications giant Huawei. – Also: Vietnamese conglomerate THADICO, which has invested in Myanmar Plaza, the largest modern mall and office space in Yangon, ran afoul of the local population when the plaza’s security attacked civil disobedience protesters in November 2021. This led to a sustained boycott that hit the plaza’s 200 retail units hard, compelling the firm to publicly apologize
I worked peripherally on And1 early on in my career, but it didn’t catch fire in Europe than it did in the US. I hadn’t known the full extent of the buzz marketing campaign that backed up the brand in the US. Here’s the early versions of their ‘mix tapes’, which did for street football what skate videos did for skateboarding in the 1980s. They blew up street basketball in the US, in a similar way to the X Games blowing up extreme sports. ESPN got on board with a sports related reality TV show with players competing for an And1 team contract.
But all the buzz marketing didn’t get the cut through that Wieden + Kennedy’s Freestyle TV advert did, effectively depositioning And1 from its street ball territory. Then there was a tie-up show on MTV2 that was similar to the And1 | ESPN show of the previous year. The lesson I took away from And1 was that product and reach both matter. Nike could buy reach and And1 didn’t have any product of note after the Tai Chi.
Opinion: Intel’s ‘smart capital’ is a warning from the past | eeNews Europe – the author considers the rise of private equity to fund new silicon fabs as a warning of peak semiconductors. Similar things happened in the 1980s and 1990s when large businesses like Coca-Cola helped fund manufacturing facilities. The key difference this time is how globalisation has been thrown into reverse by ‘Made in China 2025’ and hostile moves against Taiwan
Loss of Chinese tourists forces Europe’s luxury retailers to rethink | Financial Times – A recent surge in Middle Eastern tourists, as well as US visitors buoyed by the strong dollar, has helped fill stores. Eduardo Santander, CEO of the European Travel Commission, said the lack of Chinese tourists left the many luxury retailers that relied heavily on them with “a huge feeling of loss”, but had spurred “a huge effort to diversify”. Retailers have personalised their services. During Europe’s Covid lockdowns, shop assistants contacted customers via WhatsApp with tailor-made recommendations. Berg sees a “possible return to the old idea of service and store management from the 1990s, the little black book with all the customers’ addresses and preferences in it”. “You have to do much more to attract local customers,” Berg said. “They can come back, they have more time to spend, versus an international customer that was determined and straightforward.” – A few thoughts on this: The article asserts that Chinese tourists are straightforward and not picky. I think Chinese tourists are very picky by comparison, although the diagou’s supplying lower tier cities or buying to order might appear to be ‘luxury hoovers’. Secondly, luxury brands have treated non-Chinese customers abysmally (in particular the watch makers like Rolex and their retail partners like the Watches of Switzerland group) and they deserve all the problems that they get. Only focusing on the Chinese market has allowed the Chinese customers to blow up the secondary market. A straw poll of people that I know who have a Rolex from the past 10 years or so:
All of them had to buy their watch on the secondary market
About 80 percent of them had original warranty cards with Chinese family names, which is far higher than the 30 to 40 percent share that Chinese consumers make of the global luxury market
Finally, I don’t see the market coming back in the same way given Xi Jingping’s focus on common prosperity which will make luxury consumption increasingly problematic.
This New Study Reveals How Brand Loyalty is On the Decline / Digital Information World – I see this as more indicative of economic recession rather than any major change. Gallup showed that traits such as preference for green products decline in a recessionary environment, it would make sense if brand loyalty took a similar battering in favour of private label brands and substitute products
