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Can JNBY's Power Move Revamp Digital?

As China’s fashion giants struggle to stay relevant with digital consumers, JNBY announces new chief executive Wu Huating.

Hangzhou, the capital of China’s Zhejiang province, sits in close proximity to Shanghai city, on Hangzhou Bay. Its idyllic West Lake is both a domestic tourist attraction drawing millions of inbound holidaymakers yearly: as the old Chinese proverb goes, above there is Heaven; below there is Suzhou and Hangzhou. Yet alongside the tranquility of the vacation destination, Hangzhou’s reputation as the home to some of China’s biggest tech giants is growing: it is widely viewed as China’s answer to Silicon Valley and the likes of Alibaba Group and Alipay, Taobao and Alipay are all based there.

Since 1994 it has also been the headquarters for fashion line JNBY founded by Li Lin with a collection of sewing machines. The brand, which stands for ‘Just Naturally Be Yourself,’ has now grown into a fashion conglomerate. JNBY Design Limited offers a total of 10 lines including menswear, childrenswear and homeware, a hotel, and has floated on the stock exchange in 2016. By the end of June 2017, it reportedly had 1590 stores including almost 40 overseas concessions. Actively cultivating an overseas presence (it has, at times, held stores in Russia, Canada and Japan), it was selected by Forbes China as the most promising domestic brand to have international success.

Yet, unlike counterparts such as Peacebird, Dazzle Group and ZucZug, JNBY seems to lack not only a healthy online infrastructure but authentic connections with young Chinese millennials - and like its peers has so far failed to achieve global recognition. Last year it debuted as one of three handpicked brands at NYFW’s China Day sponsored (at the time) by Alibaba and Suntchi. Its inclusion seemed at odds with vibrant emerging designer Angel Chen and sportswear brand Particle Fever. However, with the recent announcement of the appointment of a new chief officer at JNBY, that spotlight makes more sense.

Last week the board of directors of JNBY Design Limited announced new chief executive Ms. Wu Huating to replace Wu Jian, who will step down from his chief executive role but remain as chairman focusing on the overall strategic development of the company. This appointment is little surprise to industry insiders; Sophie Shi, retail consultant and business development manager at Talent Via Pacifica Consulting, sees it as a very logical move from the giant.

“Wu has over 20 years in retail and e-commerce operations. If you dig more deeply, Wei Zhe, the founder of Vision Knight Capital - where Wu has been involved for the last number of years - has invested in JNBY Design Limited. Both Wei and Wu also have close relationships with Hangzhou’s Alibaba. Given all this, it is kind of obvious that Wu’s power move suggests that JNBY’s next strategic step will be focused more on building their digital world.”

“Wu’s power move suggests that JNBY’s next strategic step will be focused more on building their digital world”

Sophie Shi

For a Chinese company, the JBNY group were surprisingly slow to set-up a WeChat store, which it did in 2015, and instead has focused on categorisation and diffusion. Yishu Wang, associative creative director at Qumin, says while that was too late for a company with JBNY’s status in the market to set up WeChat, a focus on building its offline empire has yielded results. “Adopting a model like I.T or maybe Zuczug has been its mainstay. They have had an eye on the international market with global concessions to push products, although mostly in Asia. They were in Selfridges for a while a few years ago but then seemed to disappear. Now this type of model is no longer unique - a couple of Chinese brands are trying it and are proving more successful at it too.”

JNBY still have a stronghold on the mainland market - August 2017’s revenue increased by 28% - yet as the Chinese consumer continues to evolve the company will struggle to retain loyalty in an increasingly sophisticated home market. In addition, today’s consumer in China is fully mobile. No Agency reports that in 2018, 24.1% of average overall sales generated in China were online; JNBY paid the price in lost revenue as only 10.9% of its sales came from e-commerce.

Admittedly the group has not ignored the likes of WeChat and JNBY’s “Not Just a Box” campaign on the platform last August was a successful mini programme that allowed “fans, or followers” access to styling for an annual fee. As Shi explains, given the proliferation of platforms like T-mall and Jing Dong, brands also need to leverage tech in-stores to drive sales, such as bespoke kiosks to help customers mix and match products. “The “Box” offers potential customers with a personalised, creative and fresh take on total-look styling.” It included a 5-day try-on period before making a purchasing decision - which reportedly is still driving sales.

Clearly, such focus on online strategies produce rewards - so predictions are upbeat for JBNY’s new digital overhaul under Wu. Taken alongside the entrepreneurial vision of founder Lin, executive director of the Company, who remains onboard and responsible for the management of design and research, it looks like JNBY might solve the digital gap at home. It can then perhaps turn attention back to global expansion: much of the industry awaits the arrival of a Chinese fashion conglomerate to rival Western fashion chains. But for now, JNBY must conquer e-commerce. Even if it starts by simply offering more opportunity for BOPIS - buy online and pick up in store - watchers await this next phase with anticipation.

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