It’s a pity. Guochao, or “China chic”, is a trend that combines millennial design with traditional Chinese elements and showcases features that cater to the lifestyle of local consumers. It has earned fans worldwide with cars, fashion, and fragrance brands, to name just a few.
This concept has been around for a while but has picked up pace after the Chinese exited pandemic-related lockdowns in late 2022. Consumers discovered their country was suffering from economic long Covid, forcing many to tighten their wallets and become discerning shoppers. As a result, companies that want to charge premium pricing have to constantly rethink and redesign, or they face brutal price wars. What came out of the hyper-competition is an array of labels that are well-tested by millions of fickle shoppers.
Consider the auto industry. Chinese electric vehicle makers are redefining what it means to be a luxury car. They focus on advanced infotainment features that are almost like an extension of living rooms. Xiaomi’s SU7 mimics Porsche Automobil Holding SE’s Taycan in power and braking, but includes AI that can help with parking and greet drivers with their favourite song. Premium brands are also changing the interiors, for instance, paying attention to the layout of the back seat, where most business executives sit while driven around by chauffeurs.
Young Americans would have welcomed this concept. Unlike their parents, they don’t see driving a car as a symbol of independence. Rather, they are comfortable getting a lift from family members. Wouldn’t it be much more fun going around town in a Chinese EV, often cheaper than a Tesla?
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Or how about fashion? Songmont bags have been spotted on the arms of influencers worldwide. They are crafted from soft leather, sport a quiet luxury look, and are very, very lightweight.
To Summer, a fragrance label promotes scents that smell like white magnolia flowers in Shanghai and cedar wood trees in the mountains that run through Tibet.
But these brands may just skip the US altogether. A Songmont bucket bag costs about US$250 ($335), while a 30ml bottle of To Summer’s perfume starts at around US$70. With Trump’s tariffs, they have no price advantage compared to Coach or Le Labo Fragrances. Meanwhile, they have no brand recognition there. They may not want to take the business risk of entering a new market when American consumers are becoming more cautious.
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Two decades ago, Japan’s domestic brands blossomed after the nation’s real estate and stock markets went burst. In 1998, Fast Retailing Co’s Uniqlo sprung to prominence with a fleece launch priced at a fraction of Patagonia’s. Japanese clothing brands have been pushing out well-cut, easy-to-match looks. And Americans have been shopping minimalist designs at stores such as Uniqlo and Muji in part because tariffs have been low.
The same dynamic is being played out in China right now. In an economic recession, local brands have had to improve their products to hold onto their customers. But alas, thanks to Trump, Americans don’t get to take advantage. — Bloomberg Opinion
