ChinaLuxCultureBiz is now Jing Daily! Be sure and check us out at our new location.
Jing Daily compiles the best in Chinese luxury, culture, business, arts, and investment news from around the world
NEW YORK – November 5, 2009 – Jing Daily, the source for the most important and timely news about the business of luxury and culture in China, today announced the launch of its new website (http://www.jingdaily.com). With insight and commentary gathered from the Chinese- and English-language blogosphere and top news sources around the world, Jing Daily offers up-to-date information about crucial developments and current trends in China’s luxury, business, arts, and cultural markets.
Posted in Art, auction, Automobile, Business, China, Chinese Art, Culture, Currency, Economics, Economy, Fashion, G20, Investment, Luxury, Museums, Sino-US Relations, Uncategorized
Tagged blog, China, construction, Culture, jing, Luxury
Construction Of New Hotels, Expansion Of Existing Chains Shows That Shanghai Is Well On Its Way To Becoming Asia’s Top Financial And Business Hub
The Peninsula Shanghai is designed to emulate the city's Jazz Age style (Graphic courtesy Peninsula Hotels)
Over the past few years, in preparation for the 2010 World Expo, Shanghai has become one of the world’s top destinations for hoteliers looking to get a piece of the Chinese business and luxury traveler yuan. With upwards of 7 million visitors — mainly Chinese — expected at the expo, newly constructed hotels have added nearly 4,000 five-star rooms to the city’s already vast luxury hotel market. The question is, after the World Expo party ends, will 2011 bring a sustained flow of business and luxury travelers to Shanghai? Or will the city’s massive building boom lead to lingering overcapacity?
Today, the Independent UK looks at the city’s five-star hotel explosion, and discusses how the relatively low impact of the global economic downturn on the Chinese market has given some hoteliers hope that overcapacity is a word they’ll never have to use in major Chinese cities like Shanghai:
The opulent Peninsula, the only new building on the main part of Shanghai’s historic Bund in 60 years, just opened, embracing the city’s Jazz Age heyday with a chauffeur-driven 1934 Rolls Royce Phantom and a Great Gatsby-esque pool.
The Peninsula’s owner, Hongkong and Shanghai Hotels Limited, is making a return to the “Paris of the East” where it was founded after a 60-year absence, but it is facing stiff competition.
Market Analysts See Foreign Investments In Chinese Traditional Liquor As Smart Move To Cash In On Emerging High-End Domestic Consumer
LVMH's baijiu joint venture with Wenjun Distillery could be a huge money-maker in China; But will it appeal outside the country?
Although most westerners may be unfamiliar with baijiu, the traditional spirit of China, drinkers within the country have been sipping the powerful, often tear-inducing alcohol for centuries. Less famous abroad than Japanese sake or Korean soju, two of its descendants, baijiu is most certainly big business in China, with the most expensive bottles often selling for more than $10,000 USD. This high-end spectrum, populated by rare bottles produced by only a handful of companies, has apparently garnered the attention of more than one foreign company looking to get a piece of the premium baijiu market, as Diageo bought a 43% share in baijiu producer Sichuan Chengdu Quanxing Group last year and, recently, LVMH Moet Hennessy acquired a 55% stake in one of China’s top producers, Wenjun Distillery.
This acquisition should fit seamlessly with Louis Vuitton Moet Hennissey’s broader China strategy. As we wrote earlier this week, LVMH is making a massive push into the Chinese market, buoyed by figures that indicate China has leapfrogged past traditional luxury markets like the United States this year and should surpass the Japanese market within five years. Acquiring a premium baijiu with real brand pedigree — the first Asian brand to be owned by the LVMH group — is being greeted as a gutsy move, as the high-end baijiu market is both exclusive and highly competitive. As Karen Cho writes, the acquisition of Wenjun has huge potential as incomes grow throughout China, but — as uncharted territory – presents LVMH with a host of new challenges:
“This is the first experience for the whole LVMH group owning an Asian brand,” says Allan Hong, development manager at Sichuan Wenjun Spirits Sales Company. “Because of the great potential in China, the whole group decided to run the Wenjun brand as a super-premium brand in China,” he adds.
Posted in Business, China, Investment, Luxury
Tagged alcohol, baijiu, China, diageo, high-end, liquor, louis vuitton, Luxury, LVMH, moet hennissey, premium, spirits, wenjun, wenjun distillery
Luxury Market In China A Mixed Bag For Foreign Brands, Who Fight To Get Customers To Buy Inside China Rather Than Traveling Overseas
Although Beijing and Shanghai are China's "crown jewels," second-tier cities like Chongqing may ultimately prove the engines for the creation of a more comprehensive Chinese consumer culture
We’ve discussed recent reports on the rebound of the Chinese luxury market (which didn’t drop that much to begin with, despite global economic woes), and this year’s findings in McKinsey & Company’s Insights China report that China is rocketing towards the top of the list of the world’s biggest luxury markets. Although China remains one of the only bright spots in the world of luxury retailing at the moment, foreign luxury brands — despite rapid growth in the mainland market — often have difficulties convincing many of the country’s highest-potential customers (the wealthy and super-rich urbanites in top-tier cities) to buy their products within the mainland, strangely enough, because of the large luxury tax China levies on high-priced imported goods.
Possibly to combat this problem, as we’ve seen this year, many companies are looking towards second- and third-tier cities as a source of future growth, and perhaps leaving the top-tier cities alone and letting their Beijing or Shanghai boutiques function only as “showrooms” for ultra-rich customers who’ll simply buy the products on their next overseas or Hong Kong/Macau trip. In these smaller urban areas, middle- and upper-middle class customers, who still want to differentiate themselves through conspicuous consumption but are most certainly not part of the economic elite, could be the key for luxury brands who want their China locations to actually sell things rather than simply show them off like a real-life catalog. Middle- and upper-middle class urban professionals in cities like Xi’an, Qingdao, Nanjing and Chongqing — who make a decent living but can’t afford to fly to Hong Kong or Macau (let alone Paris or Tokyo) for luxury shopping sprees — are likely going to buoy luxury brands’ losses in top coastal cities.
Posted in Business, China, Economy, Investment, Luxury
Tagged beijing, China, hong kong, import, London, Luxury, luxury society, macau, Paris, retail, ruder finn, second-tier, shanghai, spending, tokyo
Rapid Growth Of Still-Nascent Middle Class Signals Opportunity For Investors And Family Offices In China
Many investors are banking on the prospects for Chinese middle class consumption
We’ve kept a close eye on China’s burgeoning middle class, which — despite its recent appearance on the world stage — already numbers in the hundreds of millions, presenting a vast and unique potential consumer base for companies selling everything from cars to jewelry, household goods to fashion. While the Chinese middle class is expected by many to play a major role in the global economic recovery, their buying (and saving) habits, investment strategies, and long-term financial goals by and large remain poorly understood. Today, the Wall Street Journal looks into emerging market investors who eschew the popular financial planning target customer — the wealthy or ultra-rich — to serve the Chinese middle class, and investors in the West who are banking on the continued growth of this consumer class.
In coming years, it seems inevitable that the increased consumption of China’s hundreds of millions of middle class investors will affect, in some way, investors and money managers in other countries. If that is indeed the case, it pays to read up on this subject now, when the market is just starting to be defined and more fully understood:
Encouraged by the steps the Chinese government has taken to boost consumption, some equity-fund managers are putting money into sectors related to domestic demand, such as retail, automobiles and financials.
Chinese industrialization in recent years has lifted the average income of millions, propelling them into the ranks of a swelling middle class some say could grow to be the largest in the world.
Posted in Business, China, Economics, Economy, Investment, Luxury
Tagged China, consumption, Economy, family office, finance, financial, financial trends, Investment, middle class, trend, wall street journal
Interest Of New Collectors, Government Support Growing As More Museums Mount Large-Scale Exhibitions Of Work By Top Artists
Wang Guangyi's work seems to be (finally) accepted and promoted by the Chinese government's cultural elites
Recently, we translated a speech presented at the first-ever conference of Chinese collectors of contemporary Chinese art delivered in Beijing by influential art critic Li Xianting. In this speech, Li called on Chinese collectors to get busy buying, preserving and presenting top-quality works of contemporary Chinese art in order to ensure younger generations in the country will be able to view and understand their artistic heritage. Li called art collecting “a form of cultural creation,” the responsibility for which lies in the hands of the country’s new generation of art collectors. From Li’s speech:
We can’t expect the government to establish, from top to bottom, an art museum system in such a short amount of time, not least because the construction of the “hardware” is so difficult, but what’s harder is [assembling] the artwork itself, because up until now the collection in the government’s museum of contemporary art has been really poor, and not only because in the past three decades the important works of Chinese contemporary art have flowed overseas. Can the government spend the money to collect contemporary art? Aside from lack of funds, the hardest thing is that within a considerable amount of time, could the government possibly recognize the value of a contemporary art value system?
Whether by coincidence or by design, a news item in China’s Global Times today announced a spate of high-profile museum exhibitions of two of China’s top contemporary artists, Zhang Xiaogang and Wang Guangyi. Although as recently as last month Li Xianting decried the Chinese government’s slow movement on arts education and investment in cultural capital, these two exhibitions seem to indicate that development is beginning in earnest. From the article:
While the recent inclusion of a selection of contemporary Chinese artworks in exhibitions held at state-run museums across the country has been considered by many as a sign that Chinese contemporary art has been officially embraced by the government, others in the art world are calling for more to be done to recognize the genre.
Posted in Art, auction, China, Chinese Art, Culture, Investment, Museums
Tagged Art, art collection, beijing, CCP, China, contemporary art, contemporary chinese art, CPC, government, guangdong, guangdong art museum, li xianting, national art museum, political pop, wang guangyi, zhang xiaogang
Growth Among Chinese Luxury Customers Pushes Them Beyond Japanese, Americans To Become Top Consumers Of LVMH Brands
Chinese drinkers have made the country Hennessy's top market, surpassing the United States
LVMH Moët Hennessy • Louis Vuitton S.A., the mighty global juggernaut, has had a bit of a rough year in the traditionally reliable markets of North America, Japan and Europe. Despite cutbacks in spending in these established markets, however, there have been bright areas for LVMH, namely in emerging markets like China and the other BRIC nations and pockets of Southeast Asia. In regions where LVMH has only operated for a few years, or a few decades at the most, newly rich consumers are opening their wallets and flaunting their wealth in a way never seen before — and all of this translates to high hopes for luxury’s standard bearer.
In the wake of the global economic crisis, China has leapfrogged its developed-world counterparts in many high-end segments, driven mainly by the country’s second-tier urban growth, which — fueled mostly by commodity industries like coal which have not been as badly affected by the downturn — continue to grow and attract foreign investment. Second- and third-tier cities, which have seen high-end foreign boutiques opening up only in the last few years, have been a boon to major foreign brands because customers in these smaller cities present virtually no signs of “luxury fatigue” and feel that expensive luxury brands are an excellent way of conveying their newly found status — the flashier the better.
Earlier this year, China surpassed the United States as the world’s second-largest luxury market, and the country has Japan, #1, firmly in its sights. Many analysts believe that China, given current growth figures, should overtake Japan as the world’s top luxury market within five years. So what does this all mean for luxury brands? Today, the Wall Street Journal’s Matthew Curtin looks into LVMH’s “China Syndrome,” and make the case that where LVMH goes, so goes the luxury industry:
Chinese customers, both at home and on holiday in the shopping malls around the world, have become the biggest buyers of Louis Vuitton clothes and handbags and Hennessy cognac ahead of the Japanese and overtaking Americans.
Posted in Business, China, Economics, Economy, Investment, Luxury
Tagged China, chinese, consumption, global economic crisis, japan, louis vuitton, Luxury, LVMH, LVMH moet hennessy, north america, southeast asia, united states, wall street journal
NPR Interview With Nicholas Lardy Of The Peterson Institute for International Economics Discusses How To Make “‘Made In China’ Mean Luxury”
High-end fashion brands like Shanghai Tang are part of the first wave of Chinese luxury brands from the mainland and Hong Kong
We’ve written before about domestic Chinese luxury brands, and the way these brands are working to appeal to luxury consumers in that country by resonating on a cultural level rather than simply promoting their exclusive price-points. In the next few years, as Western luxury brands lose a little of their initial luster in top-tier markets, although they’ll probably maintain their draw in second- or third-tier markets, many analysts think there will be a great opportunity for Chinese luxury brands to squeeze into the luxury market.
In an interview with NPR today, Nicholas Lardy, “a senior fellow at the Peterson Institute for International Economics, a non-profit, non-partisan group based in Washington, D.C,” discusses how China’s burgeoning middle class (which, at more than 200 million potential customers and growing, has the potential to revolutionize buying trends) — rather than the small proportion of “ultra-rich” — will be the customers who will lead to the ascendance of Chinese luxury brands.
SIMON: Now, some of us remember when the term made in Japan was synonymous with inexpensive, dare I say, cheap goods. And of course in our lifetime that’s changed entirely. Made in Japan now means quality, particularly in the car industry. Is China trying to expand in the manufacture of high-quality items itself?
Mr. LARDY: It’s not only trying, I think it’s succeeding and it’s succeeding much earlier than Japan did for the simple reason that they’ve allowed foreign firms to play a much bigger role. We buy computers that say Dell or Toshiba and so forth – they’re all made in China. They’re made by foreign companies operating in China, assembling all the parts and components there.
Posted in Automobile, Business, China, Culture, Investment, Luxury
Tagged branding, China, chinese luxury, chinese luxury brands, foreign investment, Investment, Luxury, luxury brands, NPR
Five-Bedroom Luxury Duplex In City’s Mid-Levels Area Sells for US $57 Million
The world's most expensive apartment was recently sold in this building for 57 million US dollars
We’ve written before about the Hong Kong real estate market’s relatively fast rebound in the face of the global economic downturn, with exclusive properties like The Masterpiece attracting the attention of well-heeled mainlanders and Hong Kong residents alike. This week, an apartment in Hong Kong’s Mid-Levels area sold for a record-breaking HK$439 million, or around US$57 million, and analysts expect a continued flow of money into the city’s luxury real estate markets as cash-rich individuals look to take advantage of the Hong Kong government’s recently lowered interest rates and the city’s appeal as an investment haven.
Today, the AFP writes on the recently sold duplex, noting that the massive flood of mainland money coming into the market is exciting developers but worrying some economists who think this year’s 40% leap in the luxury property sector portends that a property bubble could be forming:
“You may see some more record-breaking prices in the luxury segment,” said Buggle Lau, chief analyst for Midland Realty.
“We have all the ingredients for a bubble coming up… With low interest rates and ample liquidity people are inclined to put their money into real estate.”
Demand from mainland Chinese investors looking to diversify their new-found wealth and snap up trophy property assets was also likely to buoy the market, said Savills’ head of research Simon Smith.
“There is quite a lot of momentum out there. If you look ahead there’s a chronic undersupply of residential units for luxury and the mass market,” he added.
Posted in Business, China, Investment, Luxury
Tagged China, hong kong, Investment, Luxury, mainland, mid-levels, property, real estate, SAR, the masterpiece
Luxury Carmaker Builds Showroom On Jinbao Street In Response To Growing Chinese Demand
Bugatti's choice to open a showroom in Beijing shows the company's intention to expand in the China market
China’s growing automotive demand has been great for automakers of all stripes, from up-and-coming budget domestic brands to the world’s most expensive and exclusive marks. Already this year, companies like Japan’s Mitsuoka Motor Co have announced their intentions to build showrooms in China, Porsche debuted its Panamera Turbo at the Shanghai Auto Show, Ferrari created a China-only version of its 599 GTB Fiorano, and Rolls Royce received 20 orders for its $250,000 Ghost after presenting the automobile in Hong Kong.
Now Bugatti, the high performance French automaker, has opened its first-ever showroom outside of France, located on Beijing’s swanky Jinbao Street. From Alibaba News:
“The opening of the show room, the first one in the world, shows Bugatti’s confidence in China‘s luxury carmarket, “said Mr Kuo-chung, President of Bugatti China.
Kuo-chung said backed by sustained economic boom, China now has a significant number of billionaires, pointing to the annual Hurun Report which said China now has more known dollar billionaires than any other country bar the United States.
Posted in Automobile, Business, China, Investment, Luxury
Tagged auto, Automobile, beijing, bugatti, China, ferrari, france, Investment, Luxury, luxury automobile, mitsuoka, porsche, rolls-royce, showroom