From Guangzhou's Shisanhang to Taobao's Influencer Shops: This Is How the Clothing Business Changed ①

In three stories, we'll show you who stands behind an influencer selling hit products, and what changes they have lived through in this industry. This is the first.

I

Back then, Guangzhou was still the center of the clothing trade.

In a 2009 story, CBNweekly described the underground chain running through China's fashion apparel business: the cheap, decent clothes sold at Beijing's Zoo Market and Shanghai's Qipu Road mostly came out of Guangzhou's clothing wholesale markets.

Markets like Shisanhang, Baima, Zhanxi and Hongmian in Guangzhou did more than move and sell clothes. They designed and made them too.

Shisanhang had the lowest prices and the newest styles of the lot. The whole area covers only 0.1 square kilometers, yet it packs in more than 6,000 clothing stalls and over 10,000 owners and workers.

Every day hundreds of thousands of wholesalers speaking every kind of accent pass through, and millions of garments are sorted into huge black sacks, packed, and shipped out to the rest of the country as fast as possible.

Xia Ling made her living on this chain.

She is from Zhejiang. She studied early-childhood education in college, and after graduating, because she "wanted to sell clothes she liked," she moved to Guangzhou, where she and her family took over a stall in a Shisanhang office building. By then she already owned a factory covering design, production and sales, and she dealt every day with wholesalers from all over the country.

Zhejiang sits next to Hangzhou, a clothing center in its own right, and yet plenty of people from Zhejiang, like her, went to Guangzhou to trade in clothes.

Hangzhou's supply of fabrics and trims was nowhere near as complete as Guangzhou's, and "there are a lot of techniques Hangzhou can't keep up with, either." For a wholesaler who made and sold her own clothes, no other market could match where Guangzhou sat.

Even now, Xia Ling and her peers buy fabric from Keqiao in Shaoxing, an hour's drive from Hangzhou, but trims — zippers, buttons, the small fittings on a garment — all ship from Guangzhou. In Hangzhou you can get only samples.

More important, Guangzhou served a much wider market. "There are a lot of export orders. Koreans and Japanese come to Guangzhou to get things made, too." Some Taiwanese forums even carry detailed guides to Guangzhou's clothing wholesale markets.

That made a Guangzhou stall all the more sought after. Rent on a single Shisanhang storefront could reach 250,000 or 260,000 yuan a year, Xia Ling says — ten times what she pays now for her stall in Hangzhou's Sijiqing market.

II

Had she kept on like that, the business would have stayed much as it was. But the influencer economy that had been taking shape in Hangzhou over the previous two years gave Xia Ling the idea of going back.

In 2014, when most influencer shops were still going it alone, the first influencer incubators were sprouting in Hangzhou.

That year Zhang Dayi began working formally with Libeilin, the Taobao women's-wear store that preceded Ruhnn. Having switched from Rayli magazine model to online-store model, Zhang Dayi went on to become a well-known influencer shop owner. A year later the Libeilin team stopped running the store and turned itself into Ruhnn, concentrating on the influencer incubator business — and within a year it had pushed Zhang Dayi to No. 1 in women's-wear sales on Taobao.

Liulianjia, another gold-crown store, remade itself around the same time from a traditional clothing supply-chain company, and signed more than 30 influencers within a year, among them VCRUAN, Maoxiaotu and Cao Lujia.

Xueli, who made her name online, set up her incubator a year after they did, but Chenfan — the company she founded with her college classmate Qian Yufan — signed nearly 30 influencers in its first year and opened 27 stores, five of which hit No. 1 in the women's-wear category on the day they released new items. One year in, Xueli's incubator had a name in the trade and a valuation of 1 billion yuan.

In a year or two these influencer shops beat big traditional stores that had been trading for years. In Taobao's 2015 ranking of the top 10 women's-wear C shops — personal stores, not Tmall — by annual sales, five belonged to influencers. In 2016 the number rose to eight.

E-commerce and influencers dissolved part of Guangzhou's advantage, and Hangzhou pulled harder.

In early 2016 Xia Ling moved the business to Hangzhou and opened a studio in Binjiang district with her younger brother and his wife, supplying Taobao influencers with "exclusive custom clothing." They hired more than 40 people and, besides designers, salespeople and accountants, opened a garment factory. Xia Ling also keeps two physical stores in Hangzhou's Sijiqing wholesale mall, where buyers for influencer shops come to source goods alongside clothing-store owners from around the country.

Plenty of clothing companies like Xia Ling's studio cluster here. Most are small family firms, and most mix physical retail, e-commerce and wholesale. They have salespeople and designers, workers and factories. The studios run from a dozen people to a thousand or more. The clearest example is Ruhnn, which employed 1,500 people at its peak, before it shed the factory business and turned itself into an influencer incubator.

After years steeped in Shisanhang, Xia Ling knew garment production and had watched more trends come and go than she could count; she had her own trained eye for fabric and cut. Going back to Hangzhou to open a Taobao store looked all but inevitable.

The suggestion, though, came from her brother's wife, who had seen the fat profits behind influencer shops and wanted into the game.

Doing business in Guangzhou was in fact more profitable than in Hangzhou, Xia Ling says. At Shisanhang she faced a scattered customer base — many buyers, small mixed orders, usually only a few dozen to a few hundred pieces per order. Now a well-known influencer shop like Lin Shanshan's or Xueli's will order at least 2,000 to 5,000 pieces of a single item. Orders that big have won those shops a loud voice and real bargaining power.

Xia Ling felt she had "no energy to spare," but she had no shortage of examples around her: customers and peers whose income jumped once they started livestreaming on Taobao. What made people like Xia Ling so sure of themselves was that they held the factories — a clothing supply chain that scattered, unaffiliated influencers rarely had. The temptation was enough for her to think: try it for fun, and close the store if it doesn't work.

A month after the studio settled in Hangzhou, Xia Ling's Taobao store opened. Her brother's wife modeled and started livestreaming on Taobao, with a cheap photographer hired to shoot her. Xia Ling pulled two people out of the studio to handle customer service and operations and run the shop.

III

Xia Ling admitted defeat in three months.

It was not a good opening. A Taobao store was already too late.

Taobao's rules have changed several times since it was founded in 2003. Through those changes, stores have had three common ways to stand out: pay for search and advertising; make content and land on the Mobile Taobao home page; or incubate an influencer who brings her own traffic.

In Taobao's early years the way in was home-page display ads and search. Sellers then mostly had to master the craft of engineering a hit item to buy exposure, spending tens of thousands, even hundreds of thousands, of yuan a month on marketing tools: Zhitongche pay-per-click ads, Taobaoke affiliate links, Zuantan display ads. One hit could carry a two-diamond store to two crowns in two months, and pay well along the way. Maogu Xiaoxiang rose out of the Taobao pack on exactly this kind of raw competition. But as more and more stores moved onto Taobao, every kind of advertising cost kept climbing. The price of playing the oligopoly's game grew too high for small and mid-sized merchants.

After 2015 things shifted again. Taobao began to embrace content, and raised the move to the level of a "major strategic adjustment." The shift came out of a change in user habits: search traffic from Mobile Taobao at one point passed search traffic on Taobao's PC site. Moving from browsing web pages to swiping a phone, users went from a sprawling, everything-included website to a space of fixed and limited size. How to hold users and take a bigger share of their attention became Alibaba's problem. So Taobao Headlines, part trending news and part shopping guide, appeared on the Mobile Taobao home page.

Content marketing cost less than slugging it out over ads and search, but in content Alibaba still handed its best resources to the biggest merchants. To push small and mid-sized sellers to make content too, it opened daren registration — certification as a content creator — to sellers, letting them pair up with other daren to cross-promote products.

But people like Xia Ling, starting from nothing, could neither afford the old playbook nor muster the pull to cross-promote with other daren. Incubating an influencer looked like the cheaper road.

What they missed was that the incubators, whose shape was already set, acted as social-media manager, store operator, even nanny and coach for every influencer they signed. They had the resources to build a persona and pull in traffic the way Korean pop stars are manufactured, and they wrote their influencers' social-media posts for them.

Between shifting channels of information and shifting channels of sales, people like Xia Ling never got an edge: no star quality, no solid operation, and no luck. Going it alone, driving traffic through Taobao livestreams with an unknown "online-store model," they had almost no chance of winning.

IV

Growing an influencer through Taobao livestreams did nothing for Xia Ling's store. Three months after opening, she went back to her own trade: making clothes.

The role Shisanhang had trained her for was not enough to master that last link in the chain and connect it to the rest.

Production, though, still counted for something.

When they were not out chasing fabric, the designers in Xia Ling's studio hunched over a row of computers, comparing the latest fashion-week photographs with street shots from Dongdaemun in Seoul, drawing the shapes and patterns of the clothes. With practice, they could "design" a pattern from a single street photo taken outside a show.

Photographs like these, carrying the next year's trends, are all gathered on a site called WowTrend, which advertises itself as "customizing world trends." Xia Ling paid more than 20,000 yuan for a membership so her designers could see fashion-week pictures the moment they went up.

The photographs are filed by category, down to fabric trends, color plans and pairings for spring/summer and fall/winter 2018, with written analysis attached.

Sites like this took over from the "magazines" once sold downstairs at Shisanhang — laid out on pushcarts next to real magazines, but really just picture collections the hawkers had scraped off the internet themselves. "That was a long time ago. By the time I got to Guangzhou I hardly ever saw them. And it's slower than just looking things up on a website yourself."

Xia Ling also follows a few fashion official accounts, now and then forwarding to her Moments a close-up of some detail she thinks is about to take off. It is a new source of inspiration: free, but unsystematic, and mostly a way for her to check her own read on a trend.

A more direct source is Dongdaemun. For the past few years Xia Ling has gone there almost every month "to look around, get a feel for it," bringing back dozens of sample garments each trip.

She cannot say what makes a piece of clothing good, but experience tells her which details catch fire: a little different from what came before, and still easy to copy. Last year's fringed jeans, a huge hit, were everyday wear — "easy to accept, with a bit of a design touch to them, very easy to turn into a hit."

Back in China the garments become templates for her designers. "Domestic fabric isn't as good as Korea's — theirs holds color better and the shades are truer," but Xia Ling always finds a near substitute, close enough that the copy comes out very nearly right.

The things she designed went into pitch rounds at influencer studios, and a few of them won. Out of more than 20 garment slots, four pieces from Xia Ling's studio were picked. "That's already pretty good": an influencer's store usually releases new items once a month, choosing from more than 500 garments submitted by upwards of 20 suppliers.

This is the strongest part of Xia Ling's business.

Before long, she had hooked up with an influencer studio.

In a sense, though, design and the reading of demand were no longer hers to control. What manufacturers had always been best at now sat in the hands of the influencer shops.

In the past the manufacturer was the first link in forecasting demand: judge whether a garment could become a hit, mass-produce it, and sell it to the distributors down the line.

Now fans take the taste the influencer puts out, and the influencer can forecast demand with data tools on platforms like Taobao and Weibo — which gives her the standing to push her preferences back onto the factories.

Design requests arrive from influencer shops now and then, usually nothing more than a street photo of a model's outfit; her designers can "restore" that photo into a real garment. Working with these "well-known influencers" gave Xia Ling, for the first time, the feeling of "working with a star."

Delivering samples to an influencer studio, Xia Ling does not always meet the influencer herself. The designers who work for them screen the clothes or revise the design and cut. Their job is not only designer but buyer.

Xia Ling guards these working relationships. They sign agreements, and to keep "exclusive customization" exclusive, a sample usually goes to one influencer only. More than once she has received the same photo from two different influencers — and given up the order from whoever asked second.

Search terms trending at traditional Taobao stores run more to "same look as" and "hot fabric." Whether it is the knockoff Vetements that took off after a trend-driving celebrity was photographed in it at the airport, or the organza that blew up after Christian Dior's 2012 spring/summer and fall/winter shows, Taobao runs after the moment. Xia Ling calls these "merchandise shops." Their model is closer to Zara's: new items every week, four or five pieces at a time. Because they follow the trend, they have to land on it faster than anyone else, and take a batch of buyers before a rival's version of the same product is found.

Influencer shops chase runway trends too, but demand less speed and less fidelity. They update monthly, 20 to 30 garments at a time. "Exclusive influencer customization" leans on the influencer's personal style, and her pull can matter more than the trend.

Going from riding trends to making them became a defining feature of influencer shops in this transition.

The influencer is the sign over the door. She turns the store's monthly release into an event, posting photos and videos on Weibo; many also appear on Taobao livestreams or the big livestreaming platforms to warm the release up. Those photos and live videos — the live videos above all — became, to a degree, a guarantee of sales.

The clothes appear on a moving body. While showing them, she explains what the fabric does or how to wear it, breaking off to talk with fans — "she just chats and the clothes sell."

Fans buy all of it. For many, ordering from an influencer store is a contest of reflexes, impulsive and keyed up; miss the first wave of stock and you wait out a presale of 10 to 25 days, until the factory has filled the additional orders.

None of this pulling power can be separated from Weibo. Most influencers converted from magazine models or "Taobao girls," who until then existed only as a flat image on a page. This platform, born in Twitter's wake, produced a new kind of interaction and also let these "lovely faces" be found and reposted; when one turned out to have "an interesting soul" as well, the hold on her fans grew stronger still. Zhang Dayi's Weibo followers call her "Auntie" and find her "plain-spoken," "the real thing." Xueli presents something else: the head of an influencer company with a business mind and a face to match.

Their personal influence spread as Weibo grew — in only three years this loud, crowded public square took on more than 324 million registered users.

Weibo's close ties to Taobao gradually turned it into a shopping guide for Taobao. In 2015 the Weibo "Taobao Window" cut the jump between the two platforms to a single step, so fewer would-be purchases fell away.

Xia Ling learned quickly how to handle this crowd.

Years of meeting all kinds in the wholesale markets left her good at holding to the rules and staying on everyone's good side. Knowing each influencer's style and needs by heart became basic equipment: "Shanshan is collegiate, Xueli leans streetwear, Sasa is more socialite, a bit sweeter." Xia Ling decides where a sketch goes by the client's style. She even remembers most of her clients' measurements, and knows what kind of clothes to put in front of them.

V

"One of my clients came first in Taobao's C-shop sales ranking yesterday, and sent red envelopes in the group chat." A little past four on a weekday afternoon, sitting cross-legged on the sofa at home and talking to QDaily, Xia Ling opened WeChat on her phone and scrolled back through her messages. In the few minutes she had been talking, dozens more unread messages had arrived, red dots on every group on the screen.

Since Lunar New Year this year she has lived a life in which a few hours at the studio is enough before she goes home. A year into Hangzhou, the studio's relationships with influencer shops have steadied, and the work can go to the people under her.

That is a long way from the year she spent running between influencer studios. For roughly a year, Xia Ling and her designers delivered a few samples almost every day to several influencers signed to various companies, working out revisions with the studios' own designers.

A monthly release cycle left Xia Ling two to three weeks. That was enough.

The real test came from the holidays Taobao invented for itself. During Double 11 last year, one of Xia Ling's influencer clients sold more than 5,000 pieces of a single garment within three minutes of the release. That night Xia Ling took a follow-up order for 20,000 garments. It was more than the factory could carry; besides putting several of her subcontracted factories on overtime, she had to ask the influencer company for help and hand part of the load to them. "They can find prisons in Jinhua and Hangzhou, and factories in Jiangsu, to make them."

Order volumes like that still demand a fast answer, but she no longer opens a stall at five in the morning, no longer hands out big black sacks, no longer haggles with customers speaking every accent in the country.

The people orbiting her now are an altogether different crowd.

(Xia Ling is a pseudonym, at the interviewee's request.)

Cover image from: Wu Huanxi De Yichu, Pixabay