'Dual circulation' to boost growth (III)

A1: As one of the world's largest consumer markets, the strong resilience, vitality and growth of China's economy emerging from the pandemic has accelerated the recovery of our operations globally.

In the first quarter of the 2021 fiscal year (ended September 2020), the strong growth of the Chinese market was an important driving force behind the significant sequential improvement in our topline trends. Our sales in China grew at a double-digit rate on a year-on-year basis with continued strong performance across our e-commerce channels resulting in triple-digit online growth.

We are now more confident than ever in the growth potential of the Chinese market.

A2: Under the dual-circulation pattern, China's increasingly open market has created an excellent business environment for investment and development for foreign companies such as ours. It also encourages us to accelerate the China localization process, actively promote consumer upgrades and digital innovation, and embrace the change and development, thereby continuously creating value.

We have also observed a very important trend in China: the rising number of people in the middle-class as well as the rapid development in the nation's lower-tier cities. We will also further accelerate the planning and investment in regional markets as we grow our distribution network. The second- and third-tier cities in particular hold great potential.

A3: China's six safeguards and six priorities laid the foundation for the high-quality development of China's economy. Among them, a series of "stabilizing foreign trade, investment" policies and measures have further optimized the business environment and strengthened our confidence in continuously growing the Chinese market.

A4: China's people-oriented economic development model is now more focused on "quality" growth that is highly inclusive, bringing tangible benefits and providing incremental certainty and confidence to the market.

Companies in China, including Tapestry, have gained much from it, such as confidence to quickly resume normal operations, and excellent experience and learning to bring to our retail operations in other countries and regions

Given the unique and challenging year, the strong resilience and growth of the Chinese economy was an important factor in the accelerated recovery of the global industry.

A5: China's new development stage will create more opportunities for foreign companies such as Tapestry. High-quality growth is our focus now, and it forms the core pillars of our "Acceleration Program": Sharpening our focus on the consumer; leveraging data and leading with a digital-first mindset; transforming into a leaner and more responsive organization.

A6: The China market is extremely important to Tapestry. When we look at how far we've come in China, we feel we are only beginning to realize its potential and want to participate in the market's growth.

China is not only a significant market for Tapestry, but also a valuable source of inspiration. Chinese customers are rapidly evolving in their journey of self-discovery and are now driving fashion innovation globally. They are calling for a quality lifestyle with more personalized products and services that add value and fashion relevance to their life. We see tremendous potential for our brands in China. We are committed to the long-term development of this market.

One example of this is the way in which we partner with local designers. In Coach's runway show in December 2018, we had collaborated with four Chinese artists to reinterpret the codes of Coach. This China Collective was not only a huge success in China but around the world. In June this year, we further collaborated with the design talents of Shanghai Donghua Universities and the collection was also very well received.

We will continue to leverage our global platform to bring Chinese design to the world fashion industry.

We also believe that China will play an important role as a growth driver and stabilizer in the world economy.

The efficiency of the supply system, the tremendous consumption potential, and digital infrastructure and innovation with 5G, data centers and internet of things position China as an important hub in the global industrial chain, linking the world and encouraging a global economy. While the pandemic adversely affected the economy, production resumed and recovery began quickly in China, helping to support the stability of the global economy.

A7: The fundamental goal emphasized in China's the 14th Five-Year Plan (2021-25) and the country's 2035 long-term development plan is to meet the needs of and provide a better life for the Chinese people. This is consistent with our commitment to the Chinese market, and we will work to meet Chinese consumers' high expectations for a better and more personalized lifestyle.