Worldview: Why Yoox Net-a-Porter Is Exiting China

🇨🇳 Yoox Net-a-Porter is shuttering its China business. The luxury e-tailer will liquidate Fengmao, its joint venture with Chinese e-commerce giant Alibaba, and cease operations in the country, according to a person familiar with the matter speaking to the Financial Times. A spokesperson for Richemont, the Swiss group that owns YNAP, said the decision was made in the wider context of YNAP’s global “plan aimed at focusing investments and resources on its core and more profitable geographies.” But the e-tailer’s troubles run much deeper than market conditions in China where luxury brands face slowing growth and numerous economic headwinds. After trying to offload loss-making YNAP for years, Richemont is now even more keen to do so as challenges mount for businesses across the board in the luxury e-commerce sector. In China, where Net-A-Porter has been operating since 2013, analysts suggest that the company’s multi-brand offering was never a sufficiently compelling proposition for consumers who could easily buy luxury brands under one roof from major online players like Alibaba’s Tmall and JD.com. [Financial Times, Retail in Asia, BoF]

🇦🇪 Dubai’s Etoile Group accelerates its expansion across the Gulf. Founded by Ingie Chalhoub in 1983, the luxury goods company operating stores for brands including Chanel, Valentino, Ralph Lauren and its own multi-brand chain Etoile La Boutique across the Middle East, has opened 11 boutiques in Gulf region countries in the first half of 2024. Highlights included a new Chanel boutique at Marassi Galleria Mall in Manama, Bahrain and a newly reopened L’Etoile La Boutique in Abu Dhabi’s The Galleria. [Zawya]

🇻🇳 Vietnam’s textile, garment and footwear exports surge in Jan-May. Export turnover for the sector during the period reached $12.8 billion, up 7.4 percent year over year while exports of footwear and handbags reached nearly $7.9 billion, an increase of 7.3 percent, according to Ta Hoang Linh, director of the Europe and US market department of the country’s ministry of industry and trade. [Fibre2Fashion]

🌏 ITUC names 10 worst countries for workers’ rights in 2024. Bangladesh, Belarus, Ecuador, Egypt, Eswatini, Guatemala, Myanmar, the Philippines, Tunisia and Turkey are now the worst places in the world in terms of their respect for workers’ rights, according to the recently released 11th annual Global Rights Index by the International Trade Union Confederation (ITUC) which surveyed 151 countries for violations of civil liberties, workers’ right to establish, join and take up activities in unions including collective bargaining with their employers. [BoF Inbox]

🇮🇳 Indian skincare brand Foxtale raises $18 million in funding. The company has raised approximately 150 crore rupees in a Series B round, led by Singapore-based Panthera Growth Partners with participation from existing investors Matrix Partners India and Kae Capital. The digital-first brand, which is present in 2,500 stores across seven cities in India, closed the last fiscal year with 172 crore rupees ($20.5 million) in GMV sales. [Economic Times]

🇿🇦 South Africa implements new tax regime, impacting Shein and Temu. Fashion bought in small quantities from international e-tailers like the China-founded ultra-fast fashion companies and others will be taxed at the same rate as larger quantities starting next month, in a bid to level the playing field for local retailers. Previously, the country’s de minimis rule allowed shoppers to get parcels of under 500 rands in value by paying only a 20 percent import duty and 0 percent VAT. [The South African, MSN]

🇨🇳 Court probes Dior unit over Chinese companies exploiting workers. A Milan court inquiry has alleged that the French luxury brand’s Italian unit, Manufacturers Dior SRL, had sub-contracted work to Chinese suppliers who employed illegal immigrant workers and others without required documentation. [The Dior unit did not adopt] “appropriate measures to verify the actual working conditions or the technical capabilities of the contracting companies,” the inquiry document said, according to Reuters. The decision follows a similar move in April by the same court which placed under administration a company linked to Giorgio Armani. [BoF]

🇮🇳 Indian entrepreneur Mira Kapoor partners with Reliance Retail’s Tira. The celebrity influencer with more than 4.7 million followers on Instagram, angel investor in wellbeing brands and wife of actor Shahid Kapoor, has partnered with the multi-brand beauty retailer to launch Akind, skincare brand focused on vegan and cruelty-free formulations. [Campaign India]

🇨🇳 US adds Chinese supplier outside Xinjiang to forced labour blacklist. The country’s Department of Homeland Security (DHS) has added Dongguan Oasis Shoes Co (also known as Dongguan Luzhou), a supplier to American footwear brand Skecher among others, to the Uyghur Forced Labor Prevention Act, which bans products from Chinese firms from entering the country on suspicion of links to forced labour of Uyghurs and other Muslims, claims the Chinese authorities deny. The move is significant because the banned company is in Guangdong Province, more than 8000 kilometres from the Xinjiang Uyghur Autonomous Region, demonstrating a widening of the scope of the blacklist to companies that are believed to recruit, transfer and employ Uighurs from Xinjiang to their facilities elsewhere. [Sourcing Journal]

🇨🇳 Chinese jewellery giant Chow Tai Fook’s revenue rises 14.8%. The Hong Kong-based company has reported revenues of $13.96 billion (HK$108.71 billion) in the fiscal year ended March 2024, and operating profit reaching $1.56 billion (HK$12.16 billion), up 28.9% year over year. The results were driven by gold jewellery sales and the recovery of outbound mainland tourists to Hong Kong and Macau. [Jing Daily]

🇮🇳 India’s textile and apparel exports surge by nearly 10% in May. Textile exports increased 9.6 percent and apparel increased 9.8 percent year over year, despite global headwinds and unfavourable economic conditions in major destination markets such as Europe, the US and the Middle East, according to a report by the Confederation of Indian Textile Industry. [Economic Times]

🇻🇳 Global celebrities fuel sales of made-to-measure brands in Vietnam. “It started around two years ago,” Phan Hoang Hanh, a dressmaker in Hanoi who started the brand Phoebe Vietnam and gets orders every month from countries as diverse as the US to Qatar via Instagram and TikTok. “I think it has a lot to do with the many viral TikTok videos of tourists showing off their tailor-made clothes from Vietnam.” [Rest of the World]

🇾🇪 Yemen exempts fashion factories from taxes in bid to boost sector. The Middle Eastern nation will no longer tax textile, clothing and sewing manufacturers starting next month, as per a directive of the President of the Supreme Political Council Mahdi Al-Mashat. The country’s economy has suffered since a civil war broke out in 2014. [Fibre2Fashion]

🇨🇳 Chinese authorities seize 7,600 counterfeit luxury goods in crackdown. Items suspected of infringing on the trademarks of brands including Hermès, Dior, Louis Vuitton, Gucci, and Versace were seized this month in Guangzhou around the southern city’s main railway station. Separately, Nike and Converse filed a lawsuit last week against more than 100 defendants accused of producing counterfeits with the majority believed to be based in China. [Jing Daily, Sourcing Journal]

🇦🇷 Argentina’s annual wool exports plummet 39%. Foreign currency income from the sale of wool from the country between July 2023 and May 2024 reached $84.4 million, in a double-digit year-on-year slowdown, according to a recent report by industry body Federación Lanera Argentina. The top 10 export destinations were Germany, China, Peru, Turkey, Italy, Mexico, Bolivia, Czechia, Egypt and Chile. [FashionNetwork]

🇨🇳 Fendi taps Chinese actor Zhang Ruoyun as its menswear ambassador. The Italian luxury label has named the star of TV series including “Joy of Life 2″, who previously served as a leather goods spokesperson for the brand, as its new menswear ambassador. Zhang also fronts the brand’s new F/W 2024 menswear campaign, alongside British actor Nicholas Galitzine. [Jing Daily, Hypebeast]