We sell great mass-produced milk products – the best, even. But it’s sumptuous leathergoods, made from farmed deer nappa specifically, that’s getting a new generation of made in New Zealand brands into the hands of Chinese consumers.
When The Spinoff’s Jihee Jun visited Alibaba in Hangzhou, she discovered that our biggest sellers on ‘the Chinese Amazon’ were “A2, Anchor, Comvita, Fonterra and Anmum”.
For the record, that’s milk, milk, Manuka honey, milk and milk. We sell great milk products — the best milk products — but it wouldn’t hurt to see a bit more diversity in that list. And there are plenty of new opportunities opening up at the high-end of the Chinese consumer market for New Zealand exporters.
New Zealand’s biggest sellers for Alibaba make China sound stuck in a 19th century pastoral fantasy, but it’s also the largest luxury market in the world, the shopping equivalent of a post-Trumpian rap song about Gucci and Maybachs.
In response to the booming Chinese luxury market, in recent years Alibaba launched Luxury Pavilion while rival JD.com launched Toplife, both of which are e-commerce platforms exclusively for luxury brands. These sites speak not only to the growth of the Chinese luxury market, but also suggest a way for smaller players to get a foothold in the Chinese luxury market – without having to find a way into retail stores.
While New Zealand isn’t known globally for its luxury fashions and accessories, consumer research tells us rich Chinese 20-somethings are getting bored of heritage European brands like Louis Vuitton and Prada, whose designs they describe as “aunty-style”, the conspicuous status symbols favoured by their parents’ generation.
According to research from McKinsey, country of origin (wine from Bordeaux, cars from Germany, and so on) is no longer as important to them as having items that show who they are. And in China, where KPMG describes online shopping as a “national pastime”, a big aspect of who they are is shoppers eager to stand out from their peers.
The timing is right for innovative New Zealanders keen to sell luxury items to China. One woman attempting to do just that is Otago Polytechnic grad Jessie Wong. Wong is the founder of leather goods brand Yu Mei, which takes its moniker from her middle names, which she translates as ‘pretty jade, little sister’ or ‘young and beautiful’.
Wong founded Yu Mei (pronounced ‘you may’) in 2015, personally producing 500 deer nappa (leather) bags by hand in her first year. She has since grown her team to 16, with 36 stockists across New Zealand and Australia. When I spoke to her, she had just returned from a business trip to China, somewhere she sees real potential for her brand. “The potential is that it’s a massive market with a lot of room for growth,” she says. “Likewise, the challenge is that it’s a massive market that will be very tricky to navigate.”
Nevertheless, Wong is optimistic about how Chinese shoppers would respond to a luxury New Zealand fashion brand. “Chinese consumers love New Zealand-produced products, for example honey and merino,” she says. “Deer nappa fits pretty accurately into that category.”
The most famous handbag in the world, the notoriously difficult to purchase Birkin Bag, is produced by French brand Hermès, whose flagship “box leather” comes from French calves. New Zealand, which has little appetite for veal, doesn’t produce much calfskin, but we are one of the few places in the world that farms deer.
“There are deer in places such as Japan, the US and Canada but they’re hunted so the skins aren’t of the same quality that we are so lucky to have here in New Zealand,” Wong says. “I believe that you can’t beat the buttery soft feel of the deer nappa that we use. It’s South Island farmed and tanned and the perfect bridge between a lambskin, which is lovely and soft but too weak for the outer of a bag, and a cow hide which is not quite as supple.”
“At the end of last year my production manager, Adrian, the New Zealand Light Leathers team and I attended Premier Vision in Paris and Lineapelle in Milan, which are two of the biggest leather fairs in the world,” she said. “We got to view such a diverse range of premium leathers all used by the world’s top labels. There is such a spectrum of qualities of leather and I didn’t find anything I’d use over the deer nappa.”
Barry Parsons is the International Luxury Sales Manager of New Zealand Light Leathers (NZLL), who are already in the luxury business. “We sell 50% of our leather to European luxury brands,” he says. Past clients include Gucci, Georgio Armani, Louis Vuitton, Prada, Zegna and Coach, as well as brands from around the world including China and New Zealand.
When it comes to a big carry-all bag like the Birkin, deer leather is not a bad fit. Farmed deer leather, he says, “is a lot softer than bovine leather and it’s very light in weight. In the trend of big shopping bags, deer skins are quite appealing for that reason.”
Increasingly conscientious consumers also present an opportunity for New Zealand. While Stella McCartney has experimented with ‘vegetarian leathers’, and companies such as Modern Meadow are working on lab-grown leathers, for the time being, most luxury brands are focused on sourcing leather from ethical suppliers.
“A lot of the brands now want to know where the skins have come from and I see that as such a positive for New Zealand farmed deer because actually the animals are farmed very well, they’re ethically processed and we can show them that,” Parsons says. “It’s a big benefit.”
NZLL has worked with Wong since she was still a student, donating leather to students at Otago polytechnic to experiment with in their designs. “Then, in 2014, Yu Mei won the New Zealand Light Leathers Supreme Award at New Zealand Fashion Week, and we’ve worked with them ever since,” Parsons says. “It’s just fantastic to see her growth.”
With regards to her prospects in China, Parsons says, “I think she’ll have a good audience. China loves New Zealand products. The consumer in China likes products that are almost bespoke, or at least in limited supply, something that’s not mass produced. They like leather that comes from farms, she uses farmed New Zealand deer, tanned in New Zealand, produced in New Zealand, and she’s got the Chinese heritage. The other thing I’ve been impressed about with Jessie is that she understands e-commerce.”
As good as the product might be, luxury brands are just that — brands. Success in this realm often means smart marketing campaigns, perhaps collaborating with the right key opinion leaders, or KOLs. There’s a highly sought after chap in China named Tao Liang who — I kid you not — goes by Mr. Bags. An endorsement from him helped Givenchy move 80 bags in 12 minutes, and he was just named in Forbes’ 30 under 30.
There’s strange mojo that must be worked for a brand to go from selling bags for $300-1,000, as Yu Mei’s do, to selling Birkins for tens or even hundreds of thousands of dollars. Creating the next Birkin is not Wong’s goal — she’s doing her own thing — but it is something China is looking for.
For now, Wong is taking the time to wrap her head around the market.
“We’re in the process of researching different methods of distribution to Asia,” Wong says. “I think it often can be as simple as setting up a WeChat account and building that concierge style of personalised shopping and customer service. Tmall is definitely also a space we’re looking at alongside Taobao, Rakuten and accepting [Chinese payment app] Alipay via our current website. At present our only form of distribution online is our e-commerce channel yumeibrand.com, a shopify platform that we had built by a design company in Auckland.”
“At present my team and I are learning Mandarin and I’ve travelled over to China the past few years to gain an understanding of how business is done; I’m slowly starting to piece it together,” Wong says. “Half my family is from South China which gives me an advantage as it’s familiar culture that I’ve been brought up around, and I’ve bonded with a few of the people I’ve met over the location of our family villages. This is such a genuine and lovely segue into forming a business relationship.”
The Spinoff’s business section is enabled by our friends at Kiwibank. Kiwibank backs small to medium businesses, social enterprises and Kiwis who innovate to make good things happen.
Subscribe to The Bulletin to get all the day’s key news stories in five minutes – delivered every weekday at 7.30am.