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China’s homegrown companies eye acquisition of global brands

Chinese firms are buying well known brands in the hope of upgrading their own image. Buying famous foreign brands is seen as helping them build up their own brands, and proper management and deployment of sales channels may help them gain more popularity with domestic consumers.

Chinese textile giant Shandong Ruyi has announced plans to buy Bally. Shandong is also a joint owner of The Carloway Mill in Scotland, one of the few remaining makers of Harris Tweed. Fosun is said to have already clinched a deal to buy Lanvin, after having nabbed a majority stake in the Italian tailor Caruso in November. It’s doing due diligence on the lingerie label La Perla.

Chinese e-commerce players are also moving quickly into western markets. Secoo, China’s largest luxury e-commerce platform, is looking for opportunities to expand in Europe, while VIP has become an official London Fashion Week sponsor and plans to work with London-based brands throughout the year to help them enter the Chinese market.

But there are concerns about whether a brand like Bally might be devalued after being acquired by a Chinese firm. The management model and the deployment of sales channels will matter if Bally wants to win further recognition in the domestic market in the future.