Hong Kong Becoming The Meeting Place For Art And Luxury
In the ongoing economic downturn, major luxury companies are getting more creative in their branding and marketing approaches, even in luxury-happy East Asia. With luxury sales projected to see their first recession in recent memory this year, with some figures expecting a decline of 7% in 2009, luxury companies are looking to emerging markets like China and India, which have vast consumer bases and plenty of newly-monied potential buyers who, unlike many of their counterparts in the developed world, are new to the luxury market and still willing and eager to part with cash. As Guo Zuli, director of the World Luxury Research Center, said in a recent interview, Chinese buyers are still very new to luxury products — therefore, they are not expected to display the same level of “luxury fatigue” of western or Japanese buyers in 2009. Luxury marketers see that potential already, and if they’re smart they will turn their attention to growing this revenue stream as western demand falters — since western demand will stay relatively weak in the near and possibly the long term.
The Chinese market shows remarkable resilience in the financial crisis because it has an increasing number of people able and willing to buy luxury goods, says Guo.
“Unlike the mature traditional markets, demand in China is far from saturated either materially or psychologically.“
The high-end market, which was once believed to be immune from economic downturn, has seen weakening sales growth or even declines in the traditional markets of the United States, Europe and Japan, analysts say.
Although positive signs from buyers in the mainland should hearten luxury goods makers amid the worst luxury environment in years, it’s not enough to simply sell to the newly rich in the BRIC countries. These companies are global, and they need to sell to global consumers. In other major luxury markets, we have already seen Louis Vuitton team up with artists like Takashi Murakami to create signature collections as a way to appeal to a younger market as well as more seasoned art buffs and luxury buyers. The Murakami designs for Louis Vuitton proved some of the most successful handbag lines in the company’s history, and were, in 2007, included in a retrospective of Murakami’s work at Los Angeles MOCA.
I bring up Louis Vuitton’s previous involvement with art figures as a new avenue for cross-marketing in more mature markets because this weekend brought the announcement of a partnership between Louis Vuitton and the Hong Kong Museum of Art, with the help of the French Consulate, to jointly develop a large-scale exhibition — “Louis Vuitton: A Passion for Creation” — which will be held at Hong Kong MoA between May 22 and August 9. According to the event’s press release,
This exhibition will bring the story of Louis Vuitton to life, illustrating the creative process through installations combining works of art and archive documents.
It will feature a selection of works from the Fondation Louis Vuitton pour la Creation, including a number of significant large-scale works, sculptures, photographs and installations by internationally known artists such as Jean-Michel Basquiat, Cao Fei, Paul Chan, Gilbert & George, Dominique Gonzalez-Foerster, Andreas Gursky, Pierre Huyghe, Jeff Koons, Bertrand Lavier, Christian Marclay, Richard Prince and Yang Fudong. Works by established and newly discovered international artists working in the medium of video will also be shown. With a contemporary presentation, these works reflect the artists’ talent and demonstrate the diverse creativity in art.
The Foundation has also invited seven Hong Kong artists to take part in this exhibition, showing its close ties with Hong Kong and enhancing cultural exchanges. They are Nadim Abbas, Lee Kit, Leung Chi Wo, Pak Sheung Chuen, Tsang Kin Wah, Adrian Wong and Doris Wong Wai Yin.
Louis Vuitton has been building relationships with artists, notably through exemplary collaborations with Stephen Sprouse, Takashi Murakami and Richard Prince. A selection of works from these collaborations will also be featured in the exhibition.
I will be interested to see if these art-luxury-fashion hybrid marketing techniques will pick up steam in the mainland market. While demand from a certain level of consumer — namely, the plenty-of-cash-to-burn segment — should show steady growth, simple steady growth won’t be enough to counteract the plummeting demand from Europe and North America that luxury companies are seeing. To reach a whole new audience, which would be young urban elites, marketing in the mainland will likely pull in more big-name contemporary Chinese artists, since they are rapidly gaining notoriety from younger audiences and, unlike foreign artists, will be able to reach domestic audiences more easily.
I foresee luxury companies who want to grow market share in the mainland turning to big-name Chinese artists and designers to create China-only collections for Louis Vuitton in coming years, much like the previous successful campaigns by Takashi Murakami and others. Marketing in the mainland requires pitching products that may have a foreign face, but have an unmistakably Chinese soul (to paraphrase Little Red Book). Enlisting the Chinese artistic elite to give luxury the Chinese soul it needs to reach a rapidly-growing demographic could just be the magic bullet for global luxury companies.