[Music] [Laughter] [Music] so kipling is a handbag and luggage brand that has quite a unique positioning as a casual lifestyle brand the brand has been founded in adverb over 30 years ago the brand has been acquired by vf in 2004. vf is a major american lifestyle group that has brands such as vance timberland the norse face also recently acquired supreme today it's a true global brand we do nearly a third of our revenue in each one of the continents our headquarter is in antwerp but we also have headquarters for aipac in hong kong and for the americas in new york but kipling has always kept quite an autonomous management over the years even if we use a lot all the vf platforms in terms of digital in terms of sourcing and logistics so i think if we have to start talking about the brand we also have to start talking about the segment as such so the luggage and bag segment is a very large segment that has been increasing between four to six uh even up to ten percent in some of the regions um and it's been a huge driver also thanks to the increasing travel industry however there has been some changes happening in the in the luggage and back segment because you can truly see that there has been a big driver coming from the luxury brands the high-end brands also very much driven by a strong appetite of the asian and specifically the chinese consumer for luxury brands that has been driving the market up on the other hand you have on the lower part of the segment a lot of entry brands that are quite low priced that have been taking a big share of the market as such all the mid segment brands in which also kipling is has been a little bit under pressure from the luxury from the top and also from the entry brands therefore we really had to also review kipling through throughout the years as the mid-market segment has been extremely competitive so the brand has gone through a lot of evolution it's always stayed very close to its original edn we respond to all the trends as we want to recruit a younger consumer so after fewer attempts in japan and korea we also focused our business of the entry into hong kong and singapore hong kong and singapore are extremely interesting markets because it's truly this vision of shop till you drop a strong appetite for local consumer for the whole shopping and department store area but also it is representing a true hub for travelers and travelers also become a big focus for for kipling so we have truly been developing uh these cities as uh as true cities uh for shopping trying to recruit travelers but also local consumers so hong kong in particular was extremely interesting because it geographically already represents a bridge to the chinese market when hong kong also started to open two china travelers it started to expand very fast especially also as the rise of the middle class and chinese nationals being able to acquire passport could enter hong kong it represented a huge opportunity for all brands and also of course also to kipling at some stage the chinese consumer represented 70 percent of sales in hong kong also what is very interesting that chinese also when they travel have uh this this drive and appetite for social status and also are one of the highest spenders in the world when they travel so we highly developed our model there in department store but also standalone stores to have this truly retail experience for local but also for international shoppers given the sheer size of china when we started to enter the market we had to rely a lot on partners in order to expand into tier one cities and also make sure that we follow the real estate development across all of china these partners helped us also to work around regulations that were actually quite complicated to start to do business with on the other hand we also worked with shopping malls that started to expand and truly mushroom through all the tier 1 cities and as soon as department stores and chains entered that were actually quite strong shopping heaven also on a model of the japan but also in the western countries we followed the trend our major focus was tier one cities especially shanghai beijing and and shenzhen but slowly developed throughout the rest of of the country then of course if once the partners developed uh it was also quite an interesting learning because there were some good partners and and less less professional partners so there was a whole evolution there where we started to take some business back and also change partners to make sure that we have the right expansion and the right model that really corresponds to where we wanted to bring the keepering brand on the long term as such also when vf when we joined vf we used the platform in shanghai and also the location there in terms of headquarter in order to further develop regionally but also prepare and develop our entry into china if we also look at the partners what becomes key is of course the whole retail experience being a partner or being in a shopping mall when a consumer enters uh the pos we wanted to have the same experience as any consumer would have in our own kipling store so helping the partners also to develop this this customer experience that is truly what what kipling is standing for we had to work very closely with the partners to make sure that we have exactly the same experience wherever the consumer would shop so the digital acceleration in china has been truly fascinating and increasing exponentially today as a brand you have to really empower the brand and follow this digital acceleration if you want to be successful so in china specifically we really started our digital drive with the launch of alibaba which started as a b2b network which also helped us to work with our partner but then in 2015 when t-mall was launched which is i would say the amazon of of china it truly became interesting because of course at the beginning tmall was was really a brand that was very much discount driven but very fast it became one of the major platform in order to bring your your brand and truly become a household name which an evolution that was also key was the start of the online and smart uh phone payment because of course china being very large and not a lot of trust into different payment system the launch of alipay or wechat pay really spearheaded the development of of the digital business today the digital business of of t-mole nearly represents uh half of 45 percent to half of of the business done across all china as such when we started entering tmall and really started to develop as many other brands in the apparel and fashion industry it opened the door to a whole new development one part which was also very interesting was this omnichannel experience that the team all started to create through online payment and smartphone payment you could truly bring the online business to the offline channels because offline you simply had to scan a qr code and this again opened a lot of business opportunity also this omnichannel experience is something that is helping us to to develop a whole new ecosystem as a brand and also a different way of marketing to the end consumer another part which is quite interesting working with uh with tmall in alibaba is the whole data sharing process in europe or in the u.s it is actually quite hard to get this big data and i'm sure everybody is familiar that data is is king today but having this data really helps you as a marketeer to to reach with the right product the right consumer tmall is very transparent with the key partners and today we know very well who is our consumer where she shops when she shops how many children she has what income she has in which city she lives what she does for holidays and which other brands and competition brands she's actually associating with our own brand and this creates a whole new opportunity for every marketeer to really make sure that we have the right products and also make sure that we reach her or him at the right moment in our business another very interesting evolution that has been accelerating with kovitt is a consumer wanting to be entertained before you could just click on some banners in order to reach the platform today there's a true need for short videos testimonials and also how the key opinion leader are talking about the brand another very interesting part that saw's appearance during the covet period is live streaming live streaming today by famous key opinion leader represents nearly 15 percent of our business and we have approximately at the moment 120 hours of live streaming a month during the covet high time and also the closure of our store live streaming from stores themselves that were locked represented nearly a quarter of our business so it's truly an evolution that we see and a whole new way on also how to market our products outside if you talk about live streaming too you see that the next big frontier will actually broken through social commerce from live streaming you can directly purchase your your products and this is is really going to see a huge expansion uh in the future because directly from your local instagram or your wechat you can actually go into the store and buy the products so this this means if you summarize that you need to have the right products you need to have the right partner and you also need to have the right access and this is really what we have been working on with expansion china is to to respond to new trends new consumer needs that we see appearing fast then of course in terms of right channel we need to make sure that we have this omni-channel experience between offline and online and if you look at the right access you can see with the right platforms the right resources and also the right payment system you're able to market your products in a very different way so kipling as i said is a true global brand so for me it was very important that there is also a global brand experience across the world however we have also seen with the evolution of of the chinese consumer that truly there was an appetite for for more local for more nationalistic developments as china or made in china actually really became very cool again so in order to to follow this trend we had to work very closely with key opinion leaders which is the the expression for for bloggers and vloggers across the region uh to drive the the buzz so so what we also developed closely is was really from an international to a local brand uh so the brands in order to be successful had to work with local designers in order to create a much stronger buzz and also uh to surf a little bit on this trend of of the new china cool so we did at least a one or two local collaborations with designers that helps us also to go into the shanghai fashion week and to also create some bars because bars is truly what is driving brands uh today having a local endorser also helps us to to to follow these trends and to also track the the bars across across the country so quite similar to google analytics in the in the western world uh one of the the big bars trend follower in china is is called taobao and we truly search always for our taobao brand search index to see how the brand is standing over the weeks and how we can make sure that we come much closer to the chinese consumer so also when we looked at the taobao search index you see different trends appearing one big trend that has truly been shaping also the way we develop our product is the smartphone payment nobody really needs a purse today because everything is done via wechat pay or alipay as such there is no need for for a wallet or something to put your money in so we have seen that there has been a big trend for more waste bag or crossbody bags smaller bags that help you just to go out with your phone your lipstick and this is all you need truly to go out on the street so we have developed many products going into this trend and even today during covi times we have seen the big brand surge increasing one of the biggest increases coming truly from phone backs so we've seen a lot of innovations come from china and develop in the rest of the world and today all the eyes on china because it's a market that has been expanding and and also shows a little bit the trends for the future so the wasteback trend has actually started in japan and it has been expanding uh into the rest the phone back trend is definitely coming from china and is expanding to the rest of the world we will still continue to develop our business in asia and definitely see some increasing expansion in the future first of all we will continue to balance our off and online channels kovit has accelerated and and really helped us also to ask ourselves the right question what is the role of our brick and mortar store do you need such a big expansion and we've truly seen that actually we need to define closer the role that a store is playing in the region is it a showcasing store is it a recruitment store it is more tactical strategically located store so we have gone very closely through our real estate and really defined what is the role of a store in a specific location at the same time the expansion of live streaming live streaming from stores but also the opportunity of omnichannel and click and collect is another role that the store has not been playing in the past but will in the future so this evolution of brick and mortar will also has as a result to go digital first our digital channel and the development of our online channels and marketplaces is what is going to represent the biggest drive in the future which also means that we will work very closely with our partners and this is also a priority that we need to make sure that our partners and distributors in apac follow this lead and also follow this digital acceleration because it requires a lot of resources and different ways of marketing in order to to build the right channel and also work on on a different segmentation so kipling as a as a brand we'll have to really look at these future changes very closely and adapt a lot of things the first one is of course for the digital part is is the right segmentation of product today online is actually a whole new world because you have different players the same way you have different stores in different locations all these players have different consumers so one big part in order to win in each one of this channel is the right product segmentation at the same time it also represents a big challenge in terms of resources today there's a strong need for competences and the right capabilities to enter and market here in this online channels and then of course it has a huge impact in terms of product because you need to have the right product in the right channel for the right consumer and this is of course also means that you have to follow the trends at the same time if you look at the consumer today the new consumer being a younger millennial or a gen z consumer is a very volatile and not very loyal consumer so i believe that the changes that we have now seen coming through covet the increase of live streaming and social commerce is something that is here to last because the same as a consumer wants to have a true retail experience when she or he is going to the stores he wants to have the same experience online so when they go online they want to be entertained they want to see movies they want to see background about the stories and live streaming is exactly that it gives you a lot of information about the brand about the product about its features and also opportunities styling occasions to wear and this is truly responding to a to a retail experience that the consumer wants to last so as as such we will continue to implement short movies and go away from static assets and this will also open to door to new platforms such as social commerce because you will have a lot of kol bloggers vloggers our direct social media pages that are going to become true retail channels that are going to massively expand in the future we definitely see that our distributors in north asia japan and korea have been developing quite strongly already but we still see geographically an opportunity in southeast asia in countries such as indonesia malaysia or philippines where kipling has the potential to expand and where there's also a strong appetite into a luxury entry segment product a third big point is of course kipling represented as a travel brand even if you look at all the taobao search indexes in google analytics kipling is standing for travel as a lightweight bag and also this casual cool look that you want to have when you travel even if covet has brought traveling to a halt we see a different way of mobility that is developing and truly also will continue to develop kipling as a travel brand and a brand that you need for city discoveries in the future [Music]