Demand For High-End Liquor Remains Strong In China, Following Massive Turnout At Wine Auctions Earlier This Year
Huge in China - Martell's $3,600 per bottle L'Or cognac
Bloomberg reports that cognac brand Martell has sold out of its $3,600-per-bottle L’Or cognac, mainly because of strong demand in the Chinese market, where cognac has increased in popularity rapidly over the past 15 years. As developed markets like the US become less dependable in the face of economic concerns and consumer cut-backs, distillers have had to look eastward, and the growing popularity of cognac, wine and other liqueurs has counteracted the falling demand in other global markets.
In East Asia, much of the success of cognac depends on the China market, where Chinese drinkers have responded well to branding and marketing efforts of brands like Martell and Hennessy, and brand tie-ins have boosted the visibility and consumer recognition of major brands. And although Martell still lags behind Hennessy in the Chinese market, major initiatives like television sponsorship and bar promotions have significantly boosted their market share in the last few years. As an earlier Bloomberg article points out, “[Martell's parent company] Pernod has established a strong foothold in the Chinese market, overtaking Rémy Cointreau Group for second place, with 26% market share, compared with Rémy’s 20%, as of 2007, the latest data available from Euromonitor. Both companies still lag behind leader LVMH Moët Hennessy Louis Vuitton, which holds a 44% market share.”
Posted in Business, China, Luxury
Tagged alcohol, China, cognac, hennessy, l'or, liquor, louis vuitton, LVMH, martell, moet, pernod, remy cointreau
Hotels, Fashion Brands Becoming Increasingly Global; Competing with Well-Established Foreign Brands In Chinese Market
Chinese luxury brand Liwai has gained recognition over the last 10 years -- Will it eventually learn how to appeal to consumers at home and abroad?
Home-grown Chinese luxury brands have been in the news a lot lately, with articles focusing on how their “Chinese flavor” is transitioning from a liability into a selling point. As Chinese consumers have opened up to global brands — and increasingly taken them for granted in some cosmopolitan centers — a space has opened up in the Chinese luxury market for domestic luxury brands. These luxury brands, which are following the lead of Hong Kong fashion brands like Shanghai Tang and designers like Swire, are starting to incorporate traditional Chinese cultural aspects into a more globalized luxury style, creating an appealing Sino-Global market segment. As these Mainland brands start to pick up steam and compete on a broader scale, eventually spreading into overseas markets, it’s likely that Chinese luxury brands will develop a clout on par with their French or Italian counterparts in time.They just need to figure out their marketing and growth strategy, and need to fully get over the hump of Chinese luxury consumers often looking down at domestic brands and products.
Going along the cosmopolitan path of developers like Swire, BizChinaUpdate writes today on the Zendai Group, which is setting out to launch China’s first “bona-fide luxury hotel brand.” With their first luxury hotel slated to open next year in Shanghai, Zendai hopes to capitalize on the buzz surrounding 2010 World Expo and use the event as a launchpad for their brand.
Posted in Business, China, Culture, Economy, Fashion, Investment, Luxury
Tagged China, chinabizupdate, domestic, Fashion, liwai, Luxury, shanghai tang, zendai
Luxury Carmaker Sells Over 5,000 Units In May, Breaking Monthly Sales Records For Third Consecutive Month
Daimler hopes growing demand in China will offset plummeting demand in developed markets
China Knowledge reports on findings by Mercedes-Benz that China remains one of the luxury carmaker’s sole global bright spots amid the ongoing economic downturn. Figures from Mercedes show that more than 5,200 Mercedes and Smart cars were sold in China last month, which the automaker attributed mainly to their “broad product line-up” and growing brand appeal in the Mainland market.
Posted in Automobile, China, Economy, Luxury
Tagged benz, China, chinese, daimler, market, mercedes, mercedes-benz, smart
Melco Entertainment Makes $2 Billion Bet That Macau’s Tourism, Gambling Industry Will Soon Recover From Global Slump
City of Dreams is one of the world's most high-tech, feature-heavy casino and entertainment complexes
We have written several times before on the efforts of Macau’s tourism department to draw in guests from neighboring Mainland China and Hong Kong, as well as foreign guests from the periphery of East Asia and elsewhere. But despite the department’s efforts, overall confidence levels have been spotty at best in the last year, with some entertainment companies, like the Las Vegas Sands Corp., dramatically cutting back in Macau. However, this month there has been good news coming out of Macau’s glitzy Cotai Strip (the city’s answer to the Vegas Strip), with the opening of Melco’s “City of Dreams” casino, a $2 billion project that features 516 gambling tables in a 420,000-square-foot casino, Hard Rock and Grand Hyatt hotels along with a multimedia theater and shops run by DFS.
According to the casino’s owners, City of Dreams is designed to be one of the world’s most advanced gaming complexes, offering a sort of all-inclusive departure from many of Macau’s more old-fashioned gaming centers, but still remaining close enough to the city’s traditional tourism draws to appeal to a wide tourist demographic. With the unusually large investment that Melco has made in this project, however, it is clear that the company is not simply trying to pull foreign tourists away from its rivals, it is also trying to crack a market that has frustrated other casinos for years — the Mainland or Hong Kong gambler. While this group obviously comes to Macau often and spends freely, the problem has traditionally been getting these individuals to stay in Macau for more than one or two days. With the huge array of amenities at “City of Dreams,” Melco is showing their ambition to get this demographic to respond.
Posted in Business, China, Economy, Investment, Luxury
Tagged asia, casino, China, city of dreams, cotai strip, grand hyatt, hard rock cafe, hong kong, james packer, las vegas, lawrence ho, macao, macau, melco, sands, sheldon adelson, venetian
Bank Follows Lead of Art Investment Funds Like Castlestone Management, Helping Break Down Barriers of Investment In China’s Cultural Assets
Helping Chinese investors break in to the contemporary Chinese art market -- CMB's Art Banking Fund. Sculpture: Yue Minjun's "Contemporary Terracotta Warrior Series No. 6" (2005)
China Merchants Bank (招商银行) has launched a new “Art Banking Fund,” an add-on feature for the bank’s private banking division focused on high-net-worth individuals who want to invest in long-term domestic assets as well as contemporary Chinese art. This innovative program is the latest in CMB’s string of unique initiatives for China’s growing investor base, and attempts to reach this traditionally skittish demographic by allowing them to get involved with assets that are both Chinese in origin and a good investment over the long term, destroying one of the barriers for these investors to “Buy [into] China.”
Programs like this, which allow Chinese investors the ability to invest in a basket of hard assets rather than simply putting their money into stocks or other securities, should be quite successful in the mainland, where most investors feel that a diversified portfolio — more weighted towards hard assets like gold, jewelry, or real estate — is crucial. After all, Chinese investors are still a new demographic, despite their country’s age, as investment of this kind took a roughly 60-year break. Now, however, we can see that Chinese banks and investment firms are developing interesting investment strategies and products meant to offer “investment with Chinese characteristics.”
Posted in Art, auction, China, Chinese Art, Economy, Investment
Tagged Art, China, china merchants bank, contemporary art, contemporary chinese art, fund, Investment
Number Of Productions, Star Power Growing Annually On The Back Of Higher-Budget Blockbusters. Can Western Markets Be Next?
He Ping's historical action drama "Wheat" premieres this week at the Shanghai Film Festival. Photo © Xinhua
Yesterday, during a seminar at the 12th annual Shanghai Film Festival, critics predicted that the Chinese film industry would continue to grow regardless of the global economic downturn, driven by an increased demand for domestic films at home and the potental for broader distribution abroad. Although the domestic Chinese film industry has had issues since its infancy, due to censorship and underdeveloped licensing and production capabilities, in recent years the industry has become more sophisticated as production value has risen.
As the Shanghai Daily notes, the growing recognition abroad of Chinese talent, from well-known actors like Jackie Chan, Jet Li and Zhang Ziyi to newer talents like actress Fan Bingbing and director Ning Hao, could help propel the Chinese film industry to greater global appeal.
Posted in Art, China, Culture
Tagged China, cinema, fan bingbing, film, film festival, he ping, jackie chan, jet li, shanghai, zhang ziyi
Brands, Companies With Limited Knowledge Of Cultural Buying Habits, Brand Recognition Face Difficulty Even In World’s Fastest-Growing Market
Porsche has worked hard to prove to potential buyers in China that they are a critical part of the brand's global strategy, choosing the Shanghai Auto Show as the venue to debut their new Panamera Turbo
This week, Reuters wrote on the difficulties that many brands have encountered when trying to enter or expand in the Chinese market. Although many like to think that Chinese consumers will be ready and willing to snap up any and all imported luxury goods, the difficulties often lie not so much in the products themselves or their prices, but in their marketing and branding techniques. Everything from the transliteration of a foreign luxury brand’s name to its “localization” strategy to advertising and consumer outreach can mean the difference between an imported brand becoming the next LVMH or BMW (two brands that have excelled in China) and brands that have only managed to break even or have given up on the Mainland altogether.
Over the last couple of months, several articles have tried to explain the phenomenon of the Chinese luxury consumer — the opportunity and difficulties inherent in this massive and growing consumer base. Why will they save for months to buy a Gucci handbag, yet will pass up the lower-priced yet still-luxury Coach bag? Why will the white-collar office lady sacrifice her food budget for a Gucci wallet yet remain indifferent to Prada? Why have some (mainly European) brands attracted this important luxury buyer base while other brands leave them cold? Much of the answer seems to come back to the cultural particularities of the Chinese middle- and upper-class, particularities that set them apart from other Asian consumers and illustrate how different they are from other global buyers.
Posted in Automobile, Business, China, Economics, Economy, Fashion, Investment, Luxury
Tagged bmw, China, china daily, gucci, LV, LVMH, panamera, porsche
Luxury Carmaker Looks To Chinese Market For Sustained Growth Over Other Emerging Markets Like Russia
China has become one of Lamborghini's top markets after only four years in the Mainland
There has been quite a bit of news this week about predictions by the CEO of Lamborghini that China will overtake Italy as the second-largest market in the world for Lamborghini within three to five years, trailing only the United States. Lamborghini has aggressively sought growth in the Mainland market since opening its first dealership in Shanghai in 2005. The company’s expansion in this potentially vast market has been meteoric, with Chinese sales expected to account for much of Lamborghini’s Asian sales by 2012. While much of this comes down to the reduced demand for ultra-expensive autos in developed markets, it has been bolstered by Lamborghini’s sustained efforts to build a strong foothold in China, an effort that has been helped by an existing taste for expensive European goods.
As Reuters illustrates, Lamborghini is banking on a continued appetite for expensive European brands in the Mainland market, and has sent managers to China with the express task of cutting through any obstacles that still remain to reaching as many wealthy buyers as possible:
Posted in Automobile, Business, China, Economy, Luxury
Tagged Automobile, brand, China, europe, lamborghini, Luxury, wealthy
Growth Of Brands Like Gucci, Burberry In The Mainland Shows Growing Faith In Chinese Consumer Among Western Luxury Retailers
Luxury brands like Louis Vuitton have stormed the mainland in the last five years, growing quickly even in second- and third-tier cities, as consumption rates in developed markets slow
As signs that the worst of the economic crisis may have passed are increasingly pointed out by Bloomberg, The Wall Street Journal and others, attention has spread to the beleaguered global luxury market. While growth in this market has come to a screeching halt in traditional markets like Japan and North America as consumers cut back, analysts have predicted that the corresponding rise of the Chinese consumer — a rise that has been expedited by the Chinese government’s rapid shift to promoting a consumer-based, rather than export-based, growth plan — helps luxury brands ride out the ongoing global slowdown. According to many luxury CEOs, the key to their brands’ continued survival and expansion in this market lies solely in emerging markets like Russia and China. So the question has become, will it be enough to keep these brands afloat?
Posted in Business, China, Culture, Fashion, Luxury
Tagged bloomberg, BRIC, China, chinese government, christian dior, consumer, gucci, hennessy, japan, louis vuitton, Luxury, LVMH, recession, russia, seeking alpha, versace, wall street journal
Chinese Buyers Fill The Room At Taiwanese Auction House’s Spring Asian Art Sale
Chinese artist Wang Huaiqing's 'Flying Apsaras' brought in more than $1.3 million at this weekend's Ravenel auction in Taipei
While the auction market has been somewhat sluggish this year — despite good showings in western markets over the last few months — the recent buzz building in Hong Kong, the mainland, and Taiwan recently is starting to get more attention. After last month’s hugely successful HK09 Festival in Hong Kong, where western and Asian artists were exhibited and sold briskly, there have been a rash of sales from home-grown auction houses like the mainland’s Poly and Guardian and Taiwan’s Ravenel, and the surprising sales at these auctions to mainland and Greater China collectors have stunned some onlookers, who had underestimated the motivation of these New Collectors. Going with this trend, Ravenel’s weekend sale of modern and contemporary Asian art in Taipei was both the company’s biggest sale to date and a huge success for Asian art auctions in general.
The sale, which all told brought in $6.5 million in sales, with the top lot going for $1.3 million, has positioned the 10-year-old Ravenel as one of the top Asian auction houses. With prices having become somewhat more affordable as a result of the global economic slowdown, we have seen Chinese and Asian art collectors step up to take their place among major global art buyers, and the buying demographic of the Taipei sale — which was predominantly populated by local and mainland collectors — goes to show that this emerging group of collectors will become increasingly influential in coming auctions, both in the region and globally.
Posted in Art, auction, China, Chinese Art, Investment
Tagged Art, asia, asian, auction, cai guo-qiang, cai guoqiang, China, Chinese Art, chu teh-chun, guardian, hk09, hong kong, liao chi-chun, lin fengmian, Luxury, millions, money, poly, ravenel, sale, sanyu, taipei, taiwan, wang huaiqing, zeng fangzhi, zou wou-ki