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Ganni — the LVMH-backed Danish fashion brand coveted for its Scandi cool-girl aesthetic — is expanding in China to build on strong demand since it entered the market in 2021. With challenges around its positioning, securing the right retail spaces and combatting copycats, can it generate the same cult following among Chinese consumers and avoid dilution?
Ganni opened its first two stores in China — in Shenzhen and Shanghai — in 2022. So far this year, it has opened stores in Beijing (27 April), Suzhou (29 April) and Nanjing (1 May) and two more will follow, in Shanghai and Chengdu, by the end of July. Underpinning the expansion is a growing appetite for the premium segment in China, says Ganni CEO Andrea Baldo, who joined the brand in 2018 from Italian leather goods brand Coccinelle and was tasked with spearheading its international expansion. Domestic players at a similar price point to Ganni — such as Labelhood — have created a more “fertile” fashion environment for young brands and boosted interest in trying new labels, Baldo says. Other Scandi players from Anine Bing to Cecilie Bahnsen have entered China on Tmall in recent years, but neither have physical stores in the market.
“We’ve seen local brands in China adopt the same kind of simplistic designs and clean-cut silhouettes,” says Fflur Roberts, head of global luxury goods at Euromonitor. “And we’ve seen a trend towards more casual, relaxed dressing that you can dress up or down. Plus, Ganni has the responsibility aspect, so it ticks a lot of boxes.” Sales in China are also rebounding for international brands after the country’s tight Covid restrictions were eased at the start of 2023.
Baldo is confident demand for Ganni in China will continue to grow. After research into Chinese social media showed some appetite for Ganni and Scandi style, the brand began selling wholesale on Net-a-Porter and Farfetch in China before the pandemic, to satisfy some of the local demand and test the waters, Baldo says. Sales were encouraging, so when the pandemic hit, Ganni focused on its digital presence in the market, investing in campaigns and Chinese key opinion leader (KOL) content on social media platforms like Xiaohongshu, WeChat and Weibo. In June 2021, the brand opened its Tmall store, giving it direct access to consumers and feedback on products. Sell-through has been “extraordinary” on Tmall so far, Baldo says.
Positioning and the grey market
An ongoing focus as it expands is to make sure Ganni is positioned correctly in China. With products typically ranging from $100-$900, Ganni is more affordable than the brands the Chinese consumer might associate with luxury or designer fashion, like Dior or Louis Vuitton. “Sometimes it’s difficult to understand how to position yourself on the floors of a mall or in department stores,” Baldo says. “In this case, wholesale was helpful. Wholesalers positioned Ganni close to other contemporary brands from Paris or New York [like Acne, Toteme or Sandro], which makes a lot of sense for us — though it was not a given. Now, that’s how the landlords see us.” Tight control over whether local online partners could discount the brand helped. “China is a very promotion-driven market,” Baldo says.
Ganni has set ambitious goals to become more responsible, including aiming to reduce its carbon footprint 50 per cent by 2027 through initiatives including decarbonisation pilots, carbon insetting and using alternative materials. Baldo says this messaging “resonates a lot with consumers [in China]; much more than we anticipated. That’s been a learning experience since we have had feet on the ground.”
While the rapid expansion of the premium segment in China provides opportunities for Ganni, it also brings increased competition, says Roberts. Of particular concern will be brands with a lower price point, she adds; consumers in China are less impacted than other markets by the cost-of-living crisis but they’re still price sensitive.
The grey market is a major challenge for Ganni, and the brand has noticed some of its wholesalers are selling Ganni products to third-party sellers in China, who typically slash prices. “Selling wholesale in China means that sometimes we find products in the market that we don’t control,” says Baldo. “We need to figure out which wholesalers are leaking the product,” he says. The brand is working towards better transparency in China and investing locally to manage the wholesale distribution more closely, to try and close the gap, he says.
Copycats are another issue. “This is an online market that’s extremely price sensitive,” Baldo says. “It’s very easy to copy some of our products, like T-shirts, which have been popular. We need to be extremely careful of that.” Ganni accessories are also being copied, so the brand has patented all its shoes and bags to ensure it can protect them from infringement. Ganni has a weekly call with Tmall to try and shut down stores selling fake products, Baldo says. “Partnering with the marketplaces and trademarking as much product as possible is key.”
When it comes to retail expansion, finding space in the right malls and the right districts is important, Baldo says. “There is a lot of competition, so you have to find the right moment. If the location is wrong, it’s hard to get back.” The brand uses e-commerce data — China is Ganni’s biggest online market — to pinpoint demand and inform its bricks-and-mortar store locations. That’s why, for example, it opened its Beijing store in the Chaoyang District (where it is close to the likes of Diesel and Korean sunglasses brand Gentle Monster). “We are trying to engage the community that’s already been started through digital,” Baldo says.
This localised, data-led approach will be key to Ganni’s success as it expands in China. The Chinese luxury goods market grew 15 per cent to $428 billion in 2022 as international travel restrictions forced consumers to shop closer to home, according to Euromonitor. Roberts believes this trend will continue. “Brands need to act very locally when it comes to retail, marketing and campaigns, more than ever,” she says.
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