While Acne Studios has made strides in cultivating its presence in China, it may face challenges in maintaining its market position during a downturn when consumers opt for safer and more established brand choices.
By CHEN Qirui
In MixC Luohu, a high-end shopping mall in Shenzhen, lights are on in the double-story flagship store of Acne Studios. The Swedish fashion label is expanding fast, now with 15 stores in China.
Mattias Magnusson, its CEO, previously said that the brand generated a revenue of 260 million euros (2.1 billion yuan, US$290 million) in 2020 and was expected to bring 300 million euros in 2022.
Beneath the revenue numbers lies a rather understated marketing strategy. Emerging from a creative collective, Acne Studios established its presence with the Acne Paper editorial project, a distinctive square face motif, and its interpretation of Scandinavian aesthetics. Though no longer a niche brand, Acne Studios has refrained from hosting fashion shows in Asia and does not rely on celebrity brand ambassadors. In China, the brand continues cultivating a word-of-mouth marketing approach through social media, aligning with its global image as a brand cherished by the discerning few "in the know."
Acne Studios has won a considerable customer base in China. But it has much to lose and little to gain when consumer spending declines. During such time, consumers become more conservative while commercial landlords become less patient with brands that are still establishing themselves in the market.
Despite the popularity of Acne's iconic face logo beanies and papery nylon tote bags, the fashion label remains more vulnerable compared to established brands that have the backing of large luxury groups. While Acne Studios has made strides in cultivating its presence in China, it may face challenges in maintaining its market position during a downturn when consumers opt for safer and more established brand choices.
To prevent this scenario, Acne Studios has to generate greater buzz and capture more attention. It is not only opening more and bigger stores but also becoming more ambitious in selecting its locations. While the brand previously preferred lesser-known streets that required loyal fans to search for, it is now securing prime spots in the hottest luxury shopping destinations for maximum visibility. The opening of its Paris flagship store on Rue Saint-Honoré, its Singapore store at the Shoppes at Marina Bay Sands, and its latest location at the Luohu MixC in Shenzhen showcase this new approach.
