Being down at heel pays for some [China Daily: Europe Weekly]
(China Daily: Europe Weekly Via Acquire Media NewsEdge) Scandinavian chic puts shoemaker on top
Women today have more shoe choices than ever before. But no other shoe has captured the essence of leisure, sexuality and sophistication as much as the high-heeled shoe.
Kasper Leschly, the founder of a chic shoe brand, is well acquainted with women's special fondness for high-heeled shoes. The Danish entrepreneur, 42, has strived to bring the latest Scandinavian urban trends to China.
"For fashion-sensitive women in big Chinese cities, shoes are no longer considered apparel but rather something akin to 'jewelry for the feet'. They are worn for display or the enjoyment of the wearer.
"But wearing high-heeled shoes can sometimes be painful. I just want to offer Chinese women comfortable high-heels, and I hope our design can push the boundaries of current trends."
Leschly registered the shoe brand D:fuse with a business partner in Beijing in 2006. Choosing China as a place to do business essentially came down to the size of its market, he says.
"I studied Chinese at Beijing Normal University and have traveled a lot throughout the country, so I know how big it is. If you go to Vietnam or Thailand, they are only the size of a single Chinese province, so it was market size that was decisive for us."
D:fuse shoes first hit the streets of Shanghai in 2007 and soon became one of the fastest growing Scandinavian shoe companies in China.
"We didn't realize how fast our shoes would become popular among China's fashionistas."
Since its entrance into the market, D:fuse has rapidly expanded across the country, more than 40 retail outlets opening in the first three months.
"Seven or eight years ago, you could buy fashionable shoes in China, but it was difficult to get really trendy shoes even in big Chinese cities. The market was not fully open to them. I think that was why the big department stores responded so positively when we approached them. They looked on our shoes as fashionable, new and trendy.
"I remember when we opened shops in Dalian, Shanghai and Chongqing in one single day. It was very hectic."
But after its rapid early expansion in the beginning, D:fuse has slowed down to spend more time on market research.
"After those hectic first months, we slowed in terms of opening new shops, wanting to learn more about the market," Leschly says.
For him, how to make an independent niche shoe brand stand out in today's highly competitive retail environment of mega brands and monolithic flagship stores is a question he needs to constantly think about when doing business in China.
As D:fuse has continued to innovate, that has paid off in rising sales revenue and profits.
Today it has more than 230 shops, across China, in 50 cities. Last year, it says, it sold 600,000 pairs of shoes for revenue of about 400 million yuan ($65 million; 48 million euros).
But Leschly says doing business in China is not as easy as it was several years ago because buyers have become more sophisticated and competition is much more fierce.
"China has been a very generous place to do business in the past 10 or 15 years, not only for foreigners but also for local enterprises To be good is far from enough; you also need to position yourself right, and the most important thing is to be distinctive and unique.
"In the 1990s, demand far exceeded supply, so if you had leather shoes of decent quality, you could sell them without needing to worry about having no buyers. But the market today is more competitive and sophisticated than in the past.
"China is such a huge market. Everyone wants to grab a piece of the action, not only international competitors. You also have many strong local competitors. The country is becoming more like the European market now, and you need to be more professional to be successful."
Leschly believes being trendy is the competitive edge that D:fuse enjoys, and the company is firm about wanting to give Chinese women a way to express their individuality through designs that encompass style, fashion and trends.
"D:fuse is well-known for its high-heels. People like our distinct design. If we were not distinctive and different they would not choose us. Instead of doing repeat styles, we try to make more new and fresh ones, to constantly renew our collection."
With a highly experienced team of designers, the brand specializes in creating a wide range of leather shoes. Its designers are constantly globetrotting in search of the latest trends.
Ida Maria Ottosen, D:fuse's chief designer, studied shoe design and myriad aspects of both the shoemaking and fashion industries in Italy. From European and Asian fashion capitals to beautiful unspoiled nature and deserted beaches, she looks for interesting shapes and color combinations to keep the D:fuse collection fresh, she says.
"From Stockholm to Barcelona and Copenhagen to Rome, the design and product development team keeps our customers on the pulse of cutting-edge fashion. Whether the latest designs are breaking into the fashion weeks of London, Paris, Milan, New York or Tokyo, D:fuse will bring them to China first.
"Comfort and craftsmanship are key elements of our shoes."
Leschly says that while the Chinese market is huge, making money in it is still challenging, not necessarily because of the fierce competition, but because Chinese consumers are also very value-driven.
"Chinese travel to Paris and get a Louis Vuitton bag 30 percent more cheaply than in China. It is a funny mix: they want the most expensive thing, but they want it a little bit more cheaply. In China you can get scale very easily, but to make money out of that big scale is the most challenging thing. You need to control profit margins."
Even though it faces rising labor costs in China, Leschly says D:fuse has no plans to move to a Southeast Asian country.
"If you look purely at production costs, they are definitely rising, but we depend on the complete supply chain in China, which is very good and sophisticated. Shoemakers can easily get good quality leather and heels here, which entrenches our production in China."
D:fuse has also opened shops in Indonesia and is looking to go to the Middle East. Asos.com, a British online fashion and beauty store, is also interested in taking D:fuse shoes, he says.
"In China, there are many challenges but also opportunities. With the rise of online business, you have broader channels to boost your sales. But as consumers here have more choices to make, you need to be sustainable in providing value to customers."
And for anyone thinking of doing business in China, he says: "Don't get too excited about the opportunities here and don't underestimate your competitors. If you want to succeed in China, you have to be committed to China."
(China Daily 08/01/2014 page25)
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