Second time participating in the Expo, the booth of Canada Goose is not as Canadian Goose anymore.
The lightweight down jacket, Four Seasons clothing, footwear, collaboration series, and representative parka coats together form a 200 square meter exhibition space. The highly acclaimed Kind Fleece fleece series at the last CIIE continues to attract a new generation of customers with its versatile and casual nature. Last year, this environmentally friendly series was launched in stores and sold out a few weeks after its release, and its popularity has not decreased to this day.
Represented by the Kind Fleece series, in recent years, Canadian geese have taken the lead in "light clothing" and continuously expanded their categories. From the first spring clothing series in 2015, they entered the field of raincoats and windcoats, to the launch of the knitted series in 2017 to "cool down" heavy winter clothing, and then to the debut of shoe series in China in 2021. This high-end brand, which emerged from a small warehouse in Toronto, is seizing more people's wardrobes through diversified products that are suitable for all seasons.
This year marks the fifth anniversary of Canada's entry into China, with a series of measures aimed at deepening the local market layout: the Taikoo Li flagship store in Sanlitun, Beijing has been upgraded to the largest flagship store in the world; Collaborating with the Shanshui Nature Conservation Center to launch the Sanjiangyuan National Park Yangtze River Source Demonstration Village Natural Experience and Community Participation Project, which is the brand's first large-scale international corporate social responsibility project outside of Canada. Looking back on the past few years, in 2020, Chinese designer Chen Anqi was announced as the brand's first guest designer, and in 2021, the Chinese market became increasingly important in the commercial landscape of Canada Goose, launching a global footwear series in China.
Although China already has the largest global store network of Canada Goose, there is still vast potential and development space. "Dani Reiss, Chairman and CEO of Canada Goose, said that the business in China is currently developing rapidly, and it is expected that the direct sales proportion will exceed 70% this year.
As a key growth focus, Canada Goose first established a direct sales business (DTC) when entering China - synchronous construction of e-commerce and specialized stores, rather than a conservative start, choosing to cooperate with distributors like other markets. The market is changing, and we have always been innovating. A few years ago, Canada Goose had no direct business. We established online businesses in Canada and the United States, and then opened direct specialty stores. Today, we have over 60 specialty stores worldwide and e-commerce in most parts of the world. Once it starts, this trend will be very fast, "Reiss said in an interview with First Financial.
According to its second quarter report for the 2024 fiscal year released in early November, the Asia Pacific market continued to lead the way with a growth rate of 13.1% this quarter, after a 52% surge in the previous quarter surpassing the domestic market in Canada. Benefiting from the good recovery of the Chinese market, the current President of China, Li Zihou, will be promoted to the position of Chief Operating Officer of the Asia Pacific region early next year.
Faster growth rate of new categories
In China, the popularity of Canadian geese has somewhat caught up with this wave of consumer upgrading - celebrity sales have raised public expectations, while high-end down brands are scarce, leaving huge market space.
In 2018, Canada Goose established its mainland headquarters in Shanghai, and in the same year, opened a specialized store in Taikoo Village, Sanlitun, Beijing. Trendy people lined up in the cold wind to buy freshly baked "big geese" for the first time. And the Chinese market also submitted a decent transcript early on. In the near future, on Double 11, although it had just joined Tmall, Canada Goose had a transaction volume of over ten million in just one hour on the day of the promotion.
In June of this year, the Sanlitun Taikouli store was upgraded to the world's largest flagship store. In this single building, a dedicated low-temperature experience room simulates harsh weather and environment, allowing consumers to experience product performance firsthand. The second floor area displays brand iconic items and various designer co branded series, telling the story of China and the northern border of Canada through a unique exhibition space. In the future, the brand community Basecamp will also hold various activities here.
Basecamp is an important component of Canada Goose, and through community activities, we are able to gather like-minded consumers to tell our true stories and brand history. Brands are not just products, they need the support of history and authenticity. "After becoming an internet celebrity, how to transform into an evergreen and have long-term commercial vitality, Reese will bet on multiple categories next.
A few years ago, people rushed into a Canadian goose store wearing a parka. Now, they may be buying a raincoat. According to the latest financial data of the brand, in the second quarter of the 2024 fiscal year, the non parka category grew faster than the parka category, with the raincoat category experiencing the most prominent growth, followed by the clothing category.
On the day of the interview, Reese was wearing the latest sports shoe series, which is also a best-selling product in China. The core products of Canadian geese are growing, but the growth rate of new categories is faster. We have proven that in addition to down jackets, new products can also be launched and achieved success, and we will continue to do so in the future. In his view, lightweight down jackets are a good example, compared to the classic parka coat, their usage scenarios are more diverse, suitable for the cold season of cities. In the fiscal year 2023, these non parka categories already accounted for nearly half of the total sales.
What else do Canadian geese have besides parkas? "Reese wanted to provide more answers to this question. This year, T-shirts and shorts have been added to the clothing category, and according to the brand's five-year growth plan announced in February this year, they will also enter the fields of glasses, luggage, and home furnishings in the future.
Touching young people with sustainability
The Kind Fleece fleece, made from sustainable wool and bio based fibers, is the most popular new series of Canadian geese in the past two years. It sold out a few weeks after its release last year, and the popularity continues to increase. On social networks, young people are planting grass for reasons such as "strong practicality" and "easy pairing", changing their heavy and dull winter impression.
Reiss stated that today's brands need to attract young people in a different way from before, and sustainable development is a significant addition. Young people are concerned about this topic and hope to purchase brands that have a positive impact on the environment. In another 20 years, people will consider sustainability as a part of their purchasing decisions, and our commitment to sustainable development will also attract more young consumers
At the CIIE that ended last week, Canada Goose showcased the Cypress, Crofton series of down jackets, lightweight jackets, and vests, which included 100% sustainable nylon. According to the plan, by 2025, 90% of the brand's materials will use selected fibers and materials, such as sustainable, natural, and biodegradable plant fibers and materials, as sustainable alternatives to traditional materials.
This year, Canada Goose also launched the officially authorized circulation website Canada Goose Generations in North America. Compared to third-party platforms that mix good and bad, this platform maintains the greatest fit with the brand. At present, the website has over 2000 products for sale in the United States, and approximately 1500 in Canada, mostly in the outerwear category, including raincoats, snowpants, vests, and other products.
With the gradual penetration of environmental protection concepts into people's hearts, resale has already been proven to contain business opportunities, especially for high-end brands. Low priced second-hand products have become an effective means of expanding new fans and maintaining repeat customers. As early as 2017, Patagonia launched its official second-hand website, Worn Wear, with revenue reaching millions of dollars six months later.
Reiss has previously stated that changes in consumer attitudes have directly driven changes in the luxury goods industry. "In the past (ten years ago), luxury goods were associated with high prices, extravagance, and rapid iteration. Now, it is more related to the product manufacturing process, the meaning represented by the brand, and how to empower consumers
The five years since Canadian geese entered China have witnessed the emergence of the high-end down market, with thousands of yuan down jackets becoming the most popular track in thermal clothing. On the 2023 Double Eleven brand clothing sales list released by Tmall, according to the cumulative GMV ranking during the event, Bosden rose to first place, surpassing Uniqlo, which has been the number one on the list for many years. Among the top ten, there are multiple professional down brands, and the fourth ranked underwear brand, Jiaonei, only launched the down series last year.
The market for the warmest down jackets also has cold weather. The shares of Canada Goose and Mengkelai are being coveted by new players, and are being shared across borders by brands such as Lulu Lemon. These competitors also keep us sharp and at our best. They just prove that this is a big market and there are still many growth opportunities, "Reiss said.