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
Spending On Everything From Luxury Cars To Private Jets Shows Ultrarich Chinese Are Unleashing Their Inner Conspicuous Consumer
The exclusive club of "ultra-rich" in China are splurging amid the ongoing global economic doldrums
An interesting blog post today at the Wall Street Journal, where Robert Frank points out that the global economic downturn has turned a new spotlight onto a once-unlikely savior — the Chinese [ultrarich] consumer. While this group is exclusive to say the least, particularly in terms of the miniscule percentage of the Chinese population that can live up to this title, the staggering dropoff of the once mighty American, Japanese and even Russian luxury showoff has pushed the Chinese super-spender into the leading role.
Though Frank’s potential nicknames for this ultrarich group of big spenders — “Deng Xiaoblings,” for one — are a humorous take on the subject, the repercussions of an Eastward shift of conspicuous consumption and luxury shopping sprees could mean a great deal for established western luxury brands. Just as the increased buying power — and desire for diversification — seen among Chinese buyers of everything from gold to real estate to luxury cars to Chinese antiquities and contemporary arts has affected those markets and caused everyone from Bugatti to Sotheby’s to focus far more strongly on the China market than ever before, this China-bound luxury shift could very well change the nature and corporate strategies of the global luxury industry.
From the WSJ:
Purveyors of posh have a new mandate: Go East!
An updated forecast from Bain & Co. out this morning shows a stronger-than-expected rise in luxury sales for Asia–especially China. It said it expects luxury-goods sales in mainland China to jump 12% this year.
Posted in Art, auction, Automobile, Business, China, Chinese Art, Economics, Economy, Luxury
Tagged Art, auction, bugatti, China, chinese contemporary art, contemporary art, Economy, industry, Luxury, LVMH, robert frank, sotheby's, spending, ultrarich, wall street journal, wealth
Event Follows Other Recent Cultural Events And Partnerships In Germany And Belgium, And Upcoming Events In The United States
Following China’s National Day celebrations earlier this month, a wave of cultural events have taken place — or are slated to take place — around the world. From China’s position as guest of honor at the Frankfurt Book Fair to the many included works of Chinese contemporary art at the Europalia-China art festival in Brussels (co-curated by premier Chinese artist Ai Weiwei), the last few weeks have given Western audiences a good opportunity to get up close and personal with several aspects of contemporary Chinese artistic culture.
This week, Chinese culture heads to the Middle East, where the “Experience China in Israel” cultural exchange event kicked off this weekend at the Tel Aviv Opera House. The event will feature performances, film screenings and photo exhibitions, and follows similar “Experience” events held in the past in Russia, South Korea, Germany and the U.S. From Xinhua:
The event, jointly held by the State Council Information Office of China and Israeli Foreign Ministry, is dedicated to the 60th anniversary of the founding of the People’s Republic of China and the 17th anniversary of the establishment of diplomatic relations between the two countries.
Composed of a series of activities including performances, photo exhibitions, a film week and a symposium on China, Israel and the world economy, the event, which began earlier this week and will conclude at the end of this month, is expected to allow the Israelis to see Chinese culture and China’s development and achievements over the past 60 years and promote Sino-Israeli friendship.
Posted in Art, China, Chinese Art, Culture
Tagged ai weiwei, art exhibition, China, chinese, chinese contemporary art, chinese culture, contemporary art, Culture, europalia, europalia-china art festival, exhibition, film, frankfurt, frankfurt book fair, israel, tel aviv
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
Festival Will Bring Together Performing And Visual Arts, Music, And Film
Several top contemporary Chinese artists like Yue Minjun will be featured during Carnegie Hall's Ancient Paths, Modern Voices" festival later this month
This month is shaping up to be pretty exciting for China-watchers in Orange County, California and New York City, as Carnegie Hall presents a new festival celebrating Chinese culture, “Ancient Paths, Modern Voices.” Scheduled for both cities are a number of performances by top Chinese musicians, film screenings, contemporary Chinese art exhibitions and more. The festivals will take place from October 11 to November 24 in Orange County and from October 21–November 10 in New York. From a release:
“The immemorial culture of China has made itself felt throughout the world for many centuries-but its influence today is arguably more widespread, and more directly present, than at any other time in history,” stated Dean Corey, President and Artistic Director of the Philharmonic Society of Orange County. “That is the source of the richness and excitement of Ancient Paths, Modern Voices. The festival presents extraordinary expressions of the most venerable Chinese artistic traditions, then brings them into the here and now. This is Chinese culture in all its variety, from the deepest roots to the greenest branches.”
In New York, a number of partner organizations across the city will take part in the three-week festival, contributing venues as well as experts in the field of Chinese performing arts:
Posted in Art, China, Chinese Art, Culture, Museums
Tagged ancient paths modern voices, arario gallery, Art, art exhibition, aw asia, california, carnegie hall, chambers fine art, China, chinasquare, chinese contemporary art, chinese film, chinese music, contemporary chinese art, exhibition, festival, film, goedhuis contemporary, lang lang, max protetch, New York, ny, nyc, orange county, qi zhilong, stux gallery, sun xun, tan dun, wu man, yo yo ma, yue minjun
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
Producer/Director Appointed As President Of International Jury, To Be Held On Australia’s Gold Coast
Huang Jianxin is considered one of China's premier filmmakers, having established his reputation over the last 20 years
Chinese filmmaker Huang Jianxin (The Black Cannon Incident, Transmigration), fresh off the huge domestic success of his blockbuster The Founding of a Republic, has been appointed President of the International Jury for the third annual Asia Pacific Screen Awards. The awards will be held on Australia’s Gold Coast on November 26. One of China’s elite group of “Fifth Generation” filmmakers — alongside juggernauts like Zhang Yimou and Chen Kaige — Huang has won more than 60 domestic and international awards over the last 20 years and is widely considered one of his country’s most influential producers and directors.
From a news release:
[APSA Chairman Des Power said,] “China’s films are renowned for the way in which they express their culture and their rich and informative history and in a year when China celebrates the 60th anniversary of the founding of the People’s Republic of China, it is timely that a Chinese filmmaker presides over our International Jury.”
Posted in Art, Business, China, Culture
Tagged asia pacific screen awards, award, China, film, film production, filmmaker, huang jianxin, the founding of a republic
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
“Godfather Of Chinese Contemporary Art” Advocates Collections Develop To Ensure Art Can Be Seen In China
"The Godfather of Chinese contemporary art," Li Xianting (Photo: ArtZine China)
At recent events like the Global Collecting Forum and the Songzhuang Art Festival’s Conference of Collectors of Chinese Contemporary Art, a major topic of discussion among Chinese scholars and art critics has been the need for Chinese collectors of contemporary art (and Chinese museums and galleries) to acquire more top-quality pieces while educating the public on the history, subject matter, figures and current state of Chinese contemporary art.
At the Songzhuang Festival, Chinese art critic Li Xianting — who has been called the “Godfather of Chinese Contemporary Art” — gave a speech in which he said collecting Chinese contemporary art is a form of “cultural creation” which requires the urgent attention of Chinese collectors. Since the breakout of Chinese contemporary art in the late 1970s and its development over the years, the majority of major works of art have been acquired by Western collectors, and although that is changing gradually as Chinese buyers amass their own collections, Li still sees disequilibrium in the global marketplace. By building collections of Chinese contemporary art now, and continuing to patronize Chinese artists in the same way the Medici family did in Renaissance-era Italy, Li feels that Chinese art can reach the Chinese people themselves by building a new form of aesthetic education while stemming the flow of artwork out of the country.
Artxun (Chinese) posted the entirety of Li’s speech today. Translation of excerpts by ChinaLuxCultureBiz team:
Collection is a kind of cultural creation, and in collecting contemporary art one must face value standards, but value standards in a progressing era are of a very uncertain ideological form, and collectors — through their behavior — have to confirm whether they’re actually qualified to become the builders of value standards in the era in which we live. Every major collector who made an important contribution to art history, such as the Renaissance-era Medici family or the Guggenheims, Ludwig II…the famous American and Italian Guggenheim museums, and Germany’s Ludwig Museum — named after these collectors — because of these people and places collecting artwork, some of these works of art have become critical elements of art history.
Posted in Art, auction, China, Chinese Art, Culture, Investment, Museums
Tagged america, antiquities, Art, art history, China, Chinese Art, contemporary art, contemporary chinese art, Culture, dada, dynasty, guggenheim, ink, italy, li xianting, ludwig II, medici, modern art, Museums, qing, realism, song, songzhuang, surrealism, yuan
Forum Provides Opportunity For Western, Chinese Collectors, Curators And Artists Come Together To Discuss Future Of Art Collecting In China
Western and Chinese experts discussed a wide range of important issues in art collecting at the Global Collecting Forum in Beijing (Photo: CRI)
Although the last few years have seen the rapid rise of the New Chinese Collector of contemporary Chinese art, the relatively late arrival of Chinese collectors means that the vast majority of major works of contemporary Chinese art remain in the collections of Western art collectors (such as the former Swiss diplomat-turned-prolific collector Uli Sigg, who owns around 2,000 pieces) or Western art museums and galleries. Although buying trends are changing, as more Chinese collectors and curators start to bolster their collections and diversify the artwork they acquire, one of the unique challenges that art lovers in China must face is the dearth of contemporary Chinese artwork available for view in their local museums and galleries.
With these issues — the underdevelopment of Chinese art museums and the growing interest in private art collection in China — in mind, this weekend the Global Collecting Forum was held at Beijing’s Reignwood Theater. The forum brought together a number of prominent Western and Chinese art collectors, museum curators, gallery owners and artists, whose work was shown at an exhibition which included pieces by prominent Chinese artists like Cai Guoqiang, Xu Bing, Liu Xiaodong and Wang Guangyi. According to Cultural China:
[Chinese writer-filmmaker Sun Shuyun], who was a guest at last year’s ISD forum, has met some of the world’s best-known art collectors and museum directors there. But she was somehow left with the impression that many of these “leaders of art collecting actually knew very little about Chinese art.”
The situation is expected to improve as this year’s forum brings over 30 leading art experts from Europe, the United States and Russia to meet with their Asian counterparts in the Chinese capital. Those set to show up include Baroness Kennedy QC, a trustee of the British Museum; Alexandra Monroe, senior curator at the Guggenheim Museum; and Derek Gillman, director of the US-based Barnes Foundation, a top collector of Post-Impressionist paintings.
Posted in Art, auction, Business, China, Chinese Art, Culture, Investment, Museums
Tagged Art, art collecting, artist, barnes foundation, beijing, british museum, cai guo-qiang, cai guoqiang, CCA, China, Chinese Art, chinese contemporary art, conference, contemporary art, global collecting forum, guggenheim, met, metropolitan museum, New York, reignwood theatre, russia, xu bing