Daily Archives: June 13, 2009

China’s Luxury Market A Tough Nut To Crack (If You Don’t Know The Culture)

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

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.

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