Luxury Fans Born In The 1980s Quickly Developing Strong Brand Loyalty, Increasingly Sophisticated Taste
China's "80s Generation" has grown up completely within China's post-reform market environment
Much of the news we see coming out of China’s luxury market tends to focus on consumers in the 30s and 40s, if not older, but an interesting article from the Beijing Review (via Alibaba News) today looks at a younger demographic — the luxury crowd in their early- to mid-20s. While the number of young people in China who can afford top luxury goods is formidable, it is admittedly only a segment of a segment of this age group, as it is in most global markets. However, what makes them remarkable in China is the speed at which they have not only found and stuck with the brands they like, but have become immensely influential to marketers and designers around the world.
Ding Wenlei, writing for the Beijing Review, looks into the importance of the Chinese luxury market to global brands, who are looking to “glocalize” their products for emerging markets in China and India:
Posted in Business, China, Culture, Fashion, Luxury
Tagged alibaba, beijing, chanel, China, chinese, Culture, gucci, hermes, Luxury, mall, prada, shopping, youth
Relaunching Of New Max Mara Boutique In Shanghai And Gala Fashion Show Attract City’s Fashion Elite
Max Mara's flagship store in Shanghai is one of the brand's most important locations
The Italian fashion house Max Mara recently relaunched its flagship Asia store in Shanghai’s Citic Square to much fanfare, and this week the company put on a large-scale gala fashion show to promote two of its product lines. Held at the Garden Lane Creative Park in the city’s Hongkou District, the event was designed to breathe some new life into the unusually quiet late summer fashion environment, and by promoting the main Max Mara line as well as the company’s Sportmax sports line, Max Mara was able to reach out to a wide consumer segment in China’s most fashionable city.
According to the Shanghai Daily, the company took full advantage of the new venue to make an impact on the luxury and fashion crowds:
Female Luxury Shoppers Powering Growth Of Luxury Brands Throughout Country, From First To Third-Tier Cities
Shaun Rein sees the female demographic as one of the major drivers of luxury spending in China over the long term
Shaun Rein, founder and managing director of the China Market Research Group, writes an interesting feature today for Forbes, focusing on female Chinese shoppers, and the continued growth that this demographic has shown in the face of the global recession. Although female luxury customers have largely cut back in traditional luxury markets like Japan and North America, spending remains strong in emerging markets like China, where luxury brands are still new to some second- or third-tier cities — where much of China’s sustained growth will center in coming years, as we have written before.
As Rein sees it, the urban female demographic shows great sustained potential because of the speed at which they have become choosy — rather than simply profligate — spenders. Chinese shoppers are increasingly purchasing luxury goods because they like them, and have developed stronger brand loyalty based on style or quality, rather than simply spending for spending’s sake. This is a good thing for major brands, many of which take unique advertising or marketing strategies for the Chinese market to carve out loyal niches. Obviously, this strategy is working, as Rein notes, “Women [in China] are becoming less price sensitive and more sophisticated about the brands and products that they finally buy.” Unlike many male shoppers in the Chinese market, who are less apt to shop around or develop strong brand loyalty — mainly choosing based on status (for automobiles, mainly) or price (see success of Ferragamo and other high-end men’s luxury apparel brands) — women are more likely to become brand “connoisseurs.”
Posted in Business, China, Culture, Economy, Fashion, Investment, Luxury
Tagged China, demographics, ferragamo, Luxury, porsche, shopping, spending, women
Country Overtakes US In Luxury Spending, Purchasing Nearly A Quarter Of The World’s Luxury Goods Sold In 2008
China is now second only to Japan in annual luxury spending, and is expected to overtake Japan within the next five years
The World Luxury Association reports that spending on luxury products of all types in China has surpassed that of the United States, with wealthy Chinese spending $8.6 billion on luxury goods inside the country. Figures do not account for Chinese tourists buying luxury products overseas. These figures will no doubt please luxury retailers in China — both domestic and foreign — but there are signs that these companies need to work even harder to broaden their market and consolidate their brand position. This may sound strange, seeing as how China is second only to Japan, and rising fast, in luxury spending, but in order to maintain and grow these figures, companies are going to have to ensure “luxury fatigue” does not set in among some of their most active customers.
News by the state-run broadcaster CCTV put the figures published by the World Luxury Association into the context of luxury retailers trying to speed up their China efforts, as the country is seen in many ways to be on a similar consumer trajectory to that of Japan in the 1950s and 1960s:
Michael Michalsky Signs Development Deal With China’s Leading Sportswear Brand To Create China-Only Fashion Range
German designer Michael Michalsky sees China as a future fashion hub, rivaling Japan, France, and Italy
German designer Michael Michalsky, one of the country’s rising fashion stars, has recently signed a deal to produce a range of high-end sportswear, paving the way for other western designers to create China-only lines in partnership with China’s quickly-emerging domestic luxury brands. Michalsky has established himself as something of an iconoclast in European fashion, as he has set his sights primarily on the China market, rather than targeting traditional fashion centers like Milan or Paris.
As Michalsky told Deutsche Welle, his decision to focus on China’s fashion and luxury markets came naturally: “China is the most exciting market for fashion right now…The Chinese are really open to fashion, and let’s face it, the future of the world lies in this region.” Deutsche Welle’s profile of Michalsky shows a designer whose interest in the potential of the Chinese market is led as much by personal fascination as new business realities. As China’s position as one of the world’s top markets for luxury goods is heightened by falling consumption in developed countries, it seems likely that Michalsky is the first of many designers to work with Chinese luxury brands in coming years rather than an anomaly:
Posted in Business, China, Fashion, Investment, Luxury
Tagged adidas, berlin, bmw, cartier, China, Fashion, germany, gucci, jil sander, louis vuitton, Luxury, michael michalsky, uniqlo
Companies Appeal To Wider Range Of Customers With Affordable Yet Upscale Offerings
Taiwanese bakery chain 85c has successfully blended global luxury with prices and products that Chinese consumers find most appealing
Although we tend to focus on the higher-end luxury market, occasionally we notice an interesting news item coming out of the Greater China region that puts a distinctly Chinese spin on luxury. While Chinese luxury brands are still the underdog in their home market — particularly for fashion items or automobiles — coffee shops and bakeries often have a home-court advantage in China. Although Starbucks has had huge success in the Chinese market, opening over 350 stores and projecting that number to double in the next 10 years, home-grown entrepreneurs from Taiwan and the mainland are getting more creative in their approach to “luxury” foods and drinks. While it may be odd to think of a chain like Starbucks being considered “luxury,” in China, these foreign chains mainly draw well-to-do urban youth or professionals rather than high-school kids.
85c, a Taiwan-based coffee and bakery chain, has tried to bridge the gap between the cosmopolitan and the everyday through what it calls “Low Price Luxury” (平价奢华) or “Affordable Luxury,” a concept that has helped the chain expand throughout Taiwan and the mainland, and even into the Australian and US markets. In an interview with CHaINA magazine, 85c’s Assistant General Manager Peter Zhu explains the idea of “Low Price Luxury”:
Posted in Business, China, Culture, Fashion, Investment, Luxury
Tagged 85c, bakery, China, coffee, entrepreneurs, taiwan, tea
Brands Spending Heavily On Advertising, Brand Messaging To Maintain Strong Growth In Competitive Developing Markets
The Luxury Institute's results seem to indicate that luxury brands with a strong foothold in China will need to work harder to maintain their dominance
This week, the Luxury Institute published its list of the top luxury brands in China, as ranked by Chinese high-net-worth consumers. While the results are not terribly surprising — as the “Best of the Best” probably don’t differ dramatically from any other major luxury market — it is still important to see that traditional favorites like Louis Vuitton (for women) and Dunhill (for men) have slipped a bit. This (to me, at least) gives an indication that brands which have developed strong footholds in the Chinese market throughout the late ’80s and ’90s are giving luxury shoppers in China a bit of “luxury fatigue.”
Possibly driven by younger luxury shoppers in the cosmopolitan east (where consumers are generally more trendy as well as picky), the split between brand lust in first- and second-tier cities must be growing nearly as fast as the advertising expenditures. Unfortunately, the Luxury Institute’s results do not break the survey down into regional variations, so I’m basing all of this on my own observations and opinions.
Posted in Automobile, Business, China, Culture, Fashion, Luxury
Tagged armani, asia, bmw, China, ferragamo, gucci, hermes, Luxury, mercedes, paul smith, porsche, prada
Blending Of Art And Luxury Becoming More Common As Commercial Tie-Ins Prove Lucrative For Luxury Brands And Artists Alike
Will the Hermes-obsessed Chinese artist Zeng Fanzhi become the first in China to take part in a domestic luxury-art partnership?
Today, Art Market Monitor, by way of Newsweek magazine, looks into the phenomenon of art-luxury commercial tie-ins, which have existed in some form for decades but are becoming more common as well as more commercially viable. We have discussed the art-luxury tie-in before, in our profile of Hong Kong’s “A Passion For Creation” art/product exhibition, organized by Louis Vuitton. But the articles in AMM and Newsweek point out some interesting nuances about the art/luxury collaboration.
AMM summarizes the article very concisely as one in which the writer “wonders about Vacheron’s new line of $367,000 watches inspired by African and Oceanic masks, Ikepod’s Jeff Koons watches and Louis Vuitton’s association with just about everyone else. (Okay, just Richard Prince and Takashi Murakami.)” But building on some of the observations in our articles about the melding of art and luxury, and how much of these partnerships can be boiled down to market necessity (as many luxury and art buyers may continue scaling back amid the ongoing slow economy), Newsweek’s Nick Foulkes expertly breaks down how the separate spheres inhabited by the arts and luxury brands are, rather than being entirely separate, have a symbiotic, Venn diagrammatic relationship.
Posted in Art, Business, China, Chinese Art, Culture, Fashion, Investment, Luxury
Tagged Art, chanel, ferrari, frank gehry, gucci, hermes, hong kong, louis vuitton, Luxury, LVMH, maserati, mondrian, prada, range rover, rem koolhaas, seoul, yves saint laurent, zaha hadid, zeng fanzhi
Ongoing Negotiations Over Acquisition of French Brand Pierre Cardin Shows Chinese Luxury Brands Have Sights Set On Rapid Growth
Pierre Cardin has become one of the most recognizable and coveted foreign brands in China since entering the market in 1978. Photo (c) CRI English
Mixed signals surround the rumored takeover of the Pierre Cardin brand by two Chinese groups, which would — if true — illustrate the speed with which Chinese companies hope to attain global reach and influence. Early reports appeared to suggest that an acquisition of only Cardin’s China operations was imminent, but statements by the brand’s China director, Fang Fang, insinuated that the company was open to the idea of a wholesale takeover of its global assets. Although Pierre Cardin himself has denied these rumors, the story is making waves in the Chinese and global business press.
As one of the first western brands to enter the Chinese market after the government initiated its “opening and reform” policies in the late 1970s, Pierre Cardin carries significant brand equity in China, a point which gives this story extra importance in the grand scheme of Chinese luxury branding. As the AFP pointed out today, the acquisition of the Pierre Cardin brand by a Chinese company would be, in the mainland at least, considered a point of pride:
Posted in Business, China, Culture, Fashion, Investment, Luxury
Tagged beijing, branding, brands, China, chinese, Fashion, Luxury, pierre cardin
Bar, Part Of Dunhill Flagship Store At Plaza 66, Extends Dunhill’s British Style And Traditional Atmosphere
The Aquarium by Kee in Plaza 66, Photo © Shanghai Daily
Plaza 66, a sprawling office and mall complex in Shanghai’s Jing’an District, recently unveiled the new Aquarium by Kee bar, part of the Alfred Dunhill flagship store. Designed to be an after-work sanctuary for the area’s businesspeople, the 40-seat bar extends Dunhill’s sophisticated style to every aspect of its decor as well as its drinks list.Unique marketing efforts like this are nothing new to Dunhill’s China operations, which last year built the world’s fourth Alfred Dunhill “Home” in Shanghai, following London, Paris, and Tokyo. These “Homes” are designed to represent the sort of lifestyle promoted by Dunhill (as well as their products), and function as private clubs that, as Dunhill CCO Sven Gaede said, “are not just retail environments, but will also incorporate ancillary services such as a club, restaurant, spa, and barber shop, as well as bespoke tailor services and Bentley chauffeur services.”
In Shanghai, Dunhill is extending their exclusive marketing tack to appeal to many (primarily male) luxury buyers’ desire for “sanctuaries.” With few places remaining in this bustling city to have a calm drink or relax among other businesspeople, Dunhill is basically importing the old British model of the men’s club to Shanghai, where China has always had its own versions of this. Mixing them together — and throwing retail into the mix — Dunhill is scoring what I would consider a marketing coup. Brand-Lifestyle tie-ins have become incredibly successful in Asia in recent years (Just look at the “Passion for Creation” exhibition in Hong Kong), and Dunhill’s male-centric strategy will probably pay dividends. Their brand is already well-established in China among middle-aged luxury consumers, so they have to go beyond simple brand-building to brand sustainability and flexibility — what works in Shanghai may not work in Beijing or Chongqing.
Posted in Art, Business, China, Culture, Fashion, Investment, Luxury
Tagged alfred dunhill, asia, China, Culture, dunhill, ginza, hong kong, jing'an, London, louis vuitton, Luxury, LV, Paris, passion for creation, plaza 66, shanghai, sven gaede, tokyo