The Promises & Pitfalls of a Lanvin IPO and its Impact on Marketing in China

China based Lanvin Group SPAC, the holding group behind power brands like Lanvin, Sergio Rossi and Wolford, recently announced that it was considering doubling down on overseas and China growth by announcing its intention to hold a shareholder vote on an IPO and listing on the New York Stock Exchange this December. Whilst an IPO could be approached for a number of reasons, the news signals a bold move from the luxury fashion house. Whilst this would not only herald a prestigious first - Lanvin Group would be the first China-owned brand house to list on the NYSE - it's also evidence that the doom-and-gloom of China’s potential in a post-pandemic world might be being misplaced. 

Promise 1: Home Advantage

The first promising aspect of the Lanvin Group IPO for the brand is that there is already a latent home advantage. Lanvin Group is the recently renamed fashion arm of Chinese conglomerate Fosun Group who acquired a number of high fashion brands including the French house Lanvin, known for its luxury shoes, dresses and bowties designed by legendary Israeli creative director Alber Elbaz, who passed away in 2021. 

Fosun have deep pockets and a diversified set of brands within its portfolio, from football team Wolverhampton Wanderers to Club Med. Being a Chinese company there is a deep understanding of the complexities of optimising Chinese digital marketing and growing existing brand operations in China. Whilst this is not a prerequisite for being adept at reaching Chinese consumers, it certainly does not harm this effort.

Lanvin Group CEO Joann Cheng

Hot Pot’s take

Whilst the rumoured IPO of Lanvin is indeed exciting as it indicates an optimism towards China and APAC expansion for luxury fashion brands, this should not signal that China is an expansion route exclusively for those entrenched and well capitalised brands who have an understanding of the market in the first place. On the contrary, there are a number of brands in the luxury space who had little previous grounding in China previously but through sound strategic insight, expert media planning and agility on the ground, have delivered strong commercial and brand results in this complex landscape. Hot Pot recently grew our partner Liberty’s sales and brand relevance with diverse Chinese consumers, growing its brand equity and penetration in China, particularly for its own brand and iconic prints.Through a series of campaigns, the Liberty brand reached over 1 million Chinese consumers with content engagement rates reaching more than double the industry average. Activity additionally drove triple digit footfall and revenue growth with Chinese customers in the UK flagship store.

Promise 2: Strong initial Sales

Lanvin Group has experienced strong results in new markets, such as the recently posted 32% year on year revenue growth in China. This is obviously a major factor in Lanvin’s IPO specifically, but also heralds exciting times ahead for other beauty, fashion and wellbeing brands operating and considering China. Recently China had its 11.11 Singles’ Day e-commerce festival, and whilst there was a level of underwhelm from China in the wake of falling consumer confidence, disposable income and post-pandemic blues, luxury brands such as La Prairie, NARS, Estee Lauder and Canada Goose all saw strong sales on Tmall as well as brand growth and salience on WeChat marketing and other platforms like RED / Xiaohongshu.

Hot Pot’s Take 

The Hot Pot team works with deep knowledge of current market factors, while always taking a mid-to-long term view on brands’ China planning. Our experience tells us that developing vision-based, multi-year positioning strategies for the market proves significantly more effective than knee-jerk, rapid eCommerce activations as an entry strategy. Therefore whilst the Lanvin Group’s recent sales performance on Singles Day is encouraging, it is more likely that the IPO has come about on the back of successive years of strong sales in the market, itself a result of a longer period of engagement with, and understanding of the Chinese consumer, their own platforms and messaging. 

Pitfall: Growth is good, but it's important to match that ambition with strategic excellence and deep expertise of China  

Lanvin’s brands are established and active across Chinese platforms like Tmall, Xiaohongshu as well as partnerships across video sharing platforms like iQiyi and Douyin. They recently ran an exciting ‘blind box’ activation on their branded Tmall page, which does signal that the brand understands locally-driven initiatives and is active across these. Great news for Lanvin ahead of its possible IPO, but other luxury and mainstream fashion brands should note that deep expertise of China’s particular and ever-changing media landscape is necessary if connection with China’s fashion-forward audience segments are the prize.   

Hot Pot’s Take 

Brands seeing the Lanvin IPO as a signal that China offers quick, easy growth upside should seek to understand the various mid and long-term factors that have gone into building the group’s success. While there are certainly near-term gains to be had, it is important for brands entering or optimising their marketing efforts in China to do so with their eyes open, and ideally with a culturally entrenched, trusted partner with tangible experience growing brands strategically in the country. Hot Pot’s experience includes working with La Perla on a repositioning campaign and digital marketing strategy around Qixi, Chinese Valentine’s Day. Our proprietary insight panel of Chinese consumers informed us that within fashion culture, the brand was perceived as “too expensive” and not luxury or desirable. 

Hot Pot ran an end to end campaign for La Perla, which entailed a creative partnership with a local Chinese illustrator, sourcing and communicating with influencers, and running paid media placements across Tmall and JD. Results were excellent, and our campaign led to a 230% like-for-like increase in China sales for the brand over the same period a year previously. The brand’s localised imagery, creative strategy and core messaging were also re-set for long-term growth in the market. 

Hot Pot China’s brand and commercial teams have extensive experience in bringing luxury fashion brands to market, as well as in optimising luxury brands’ strategic positioning and marketing execution within China. 

Get in touch with a member of the Hot Pot team today to find out more about how you can deliver greater commercial return in China.