Luxury Retailer Notes That Stabilized Sales, Huge Growth In Greater China Have Fueled Asia Expansion
Italian fashion company Valentino is looking to expand quickly in Asia, with a focus on China & Hong Kong
Most global fashion houses have, over the years, worked hard to make something of a foothold in the Chinese market. As we’ve written before, one of the first major Western fashion companies to enter China following the “reform and opening” policy of the late 1970s was Pierre Cardin, who began selling in China in 1979. Since then, major fashion boutiques from around the world can be found in China’s largest cities, and some have progressed into smaller (but still large by most standards) second- and third-tier cities throughout the country. Despite major setbacks for some retailers in formerly reliable markets like Japan — where companies like French Connection and Versace have recently closed down operations — and a drop in demand in the American market (although that has, according to reports today, stabilized for many luxury companies), the surge in demand for certain designers in the Chinese mainland should soften the blow in revenue that these companies are experiencing as a result of the global economic downturn.
The Valentino Fashion Group — which includes the Valentino, Hugo Boss, and Marlboro labels, today announced that the company has benefitted from the quick rise in consumer demand throughout China. From Bloomberg:
Revenue in China and Hong Kong jumped 40 percent in the past month, and the company expects that pace to continue, Sassi said backstage after the show…
Although sales in Japan were described today by Valentino’s CEO as “not that bad,” the company’s major focus is store expansion in mainland China, Hong Kong, and Southeast Asian markets like Singapore:
[Valentino CEO Stefano Sassi] said the group is opening Valentino stores in Asia — Singapore, China and Japan. “These are not great times to open shops, but we are going ahead with what needs to be done.”
Posted in Uncategorized
Tagged asia, China, Fashion, hugo boss, japan, Luxury, marlboro, pierre cardin, singapore, valentino, valentino group
Growing Demand In China’s Interior, Other Asian Countries Should Counterbalance Tepid Consumption Elsewhere
Although Chinese consumers have shown a taste for foreign luxury brands, domestic labels will present stiff competition in coming years
As a result of the fast-paced development of China’s eastern coastline and special administrative regions, only recently have major luxury brands made it to the country’s vast interior region, where a number of second- and third-tier cities remain relative blank slates. Since so many companies are only reaching these areas now, the spread of luxury brands in China has become a regular news story. This has only intensified over the last year, as formerly free-spending Japanese and American customers have thought twice about luxury goods while emerging customers in places like the BRIC countries and relatively fast-growing economies like Vietnam become more regular (and brand-loyal) buyers. Nonetheless, the luxury sector is still experiencing only modest growth one year on from the onset of the global economic slowdown despite their best efforts at wooing new customers.
If many recent articles are correct, though, what we’ve seen over the last year — severe as it has been — should only prove to be a blip in the grand scheme of luxury revenues. From Financier Worldwide:
Sales of designer shoes, handbags, and beauty products have weathered the financial storm particularly well. At the end of August, French cosmetics company L’Oréal reported higher than expected profits of €1.37bn for H1 2009. In June, Hermès revealed it was farming crocodiles in Australia to feed demand for its coveted £4000 Birkin bag. Around the same time, Mulberry announced that its handbag sales had recovered, climbing 21 percent in the first 10 weeks of the new financial year. Shoe supplier Kurt Geiger, which operates in upmarket department stores across the UK, also reported double-digit growth in profits for the first five months of the year.
Bain & Company predicts that trading in the developed markets will remain tough for the rest of the year, with growth of around 1 percent in 2010 before a slow recovery. However, despite the recession slowing the pace of development in emerging markets, Bain believes that, as a consequence of increasing personal wealth, growth in global GDP, and rising tourism in Russia, China, India and Brazil, spending will surge between 20 percent and 35 percent over the next five years. This is expected to aid the recovery of the luxury goods sector.
Posted in Business, China, Economy, Fashion, Luxury
Tagged asia, asian, brands, brazil, China, chinese, consumer, customer, economic growth, Economics, Fashion, global economic crisis, india, Luxury, luxury goods, middle class, russia, spending, wealth
Auction Houses Combining Popular Lots To Attract Even More New Chinese Collectors
Up for auction next month at Borobudur's Singapore auction of contemporary Asian art and fine wine: Xu Bing's "Free Bird"
With emerging bidders like the New Chinese Collectors, seen in action at recent auctions of Chinese antiquities (and by other auction attendees throughout the summer), taking the spotlight and garnering the attention of major auction houses like Sotheby’s, smaller auction houses have taken the buying trends of these new bidders to heart and retooled their Asia strategies to appeal to these buyers and drive growth in the region.
In recent auctions, Indonesian auction house Borobudur has combined two of the Chinese buyers’ favorites — contemporary art and fine wines — into combination lots at their Singapore auctions. By undertaking this kind of Asia-centric initiative like combination auctions, Borobudur is likely to attract more mainland Chinese buyers, hoping to double up on good art and wine and bring back a decent-sized haul from Southeast Asia.
Astronomical Prices Paid For Historical And Quality Pieces In Recent Asian Auctions Defies Global Economic Woes As More Chinese Collectors Get In The Game
Since good works by historical artists like Yue Minjun are becoming more scarce, Chinese collectors are expected to continue to flex their muscles in upcoming auctions of Chinese contemporary art
Hardly any industry has escaped the global economic slowdown unscathed, and art is no exception, but recent auction results indicate that the art market — or at least pockets of the art market — are coming back to life. As the Wall Street Journal reports today, in some recent auctions some pieces have sold for exponentially more than their estimates, surprising collectors and market analysts alike. The common bond shared by most of these pieces? They were Chinese — or, if not Chinese, Asian:
Last week, the longest string of Asian art sales since the Zodiac clock dispute was held in the U.S.—and amid the most entrenched art-market recession in nearly two decades, the auction prices of many more than a handful of pieces went through the roof. At the Sotheby’s sale of works from the collection of Arthur M. Sackler, for example, the auctioneer sang out fast-rising numbers, first in English, then Chinese, as if he were rising in the elevator of some fantastically tall Hong Kong skyscraper.
The emergence of the New Chinese Collector is a subject we’ve followed pretty much since our inception, and is a subject that is endlessly fascinating simply because it’s such a new phenomenon. While, technically, Chinese people have collected art for a few thousand years — with the exception of a few Mao-era decades where the practice was virtually nonexistent but for a few elite art lovers here and there — the New Chinese Collector has only existed for around 20 years, and arguably even less than that. This collector base was out in full force in recent auctions of Chinese and other Asian art — in New York, London and Hong Kong — and the motivation, desire and intensity of the Chinese collector is becoming somewhat legendary right before our eyes.
Posted in Art, auction, Business, China, Chinese Art, Culture, Economy, Investment, Museums
Tagged ai weiwei, alexandra peers, art collectors, asia, asia week, asian, bronze, China, chinese, Chinese Art, chinese art collectors, chinese contemporary art, collector, contemporary chinese art, east asia, Economics, globalization, hai bo, hong kong, Investment, j. paul getty museum, London, Luxury, moma, new chinese collector, New York, phillips de pury, qing dynasty, sackler, sotheby's, wall street journal, wealth, yue minjun, zhou dynasty, zodiac
Company Developing Handset Aimed At Luxury Market In China, Featuring 3G and Operating System By China Mobile
Will Lenovo really be able to rival the iPhone in China?
As the world’s largest mobile phone market, constant innovation is a must for Chinese handset makers who want to compete on quality and features rather than low price. As we wrote several months ago, some of these high-end handsets — like the VEVA S90 — are designed to appeal to the luxury market more for their styling and exclusivity, but as Computerworld‘s Owen Fletcher writes today, Chinese tech companies like Lenovo are beginning to see the value in developing higher-profit models that use proprietary technologies.
With Apple’s iPhone expected to enter the Chinese market some time in the fourth quarter of this year, Chinese handset makers will have to intensify their efforts to create a touchscreen 3G phone with the features that consumers really want. So will Lenovo’s O1 be able to do what phones like the Palm Pre and Android G1 have not — topple the iPhone’s dominance in the smartphone market, if only in China?
Posted in Business, China, Luxury
Tagged android, Apple, asia, cell phone, China, china cell phone, chinese, handset, iphone, lenovo, mobile phone, palm pre, veva s90
Strong interest from Asian buyers expected to spark October sale in HK
As we reported recently, the Sotheby’s autumn auction of Asian art — which highlights important contemporary Chinese pieces — will take place in Hong Kong on October 6. With combined estimates at over $12 Million US (HK $98 Million), this sale is expected to be one of the year’s biggest and most-watched auctions. As we have noticed in recent sales — both in Hong Kong and elsewhere — one thing we can expect in this auction is a high proportion of domestic Chinese buyers in the room, and we can expect them to be motivated to buy. Today, in preparation for the upcoming auction season, Forbes published an article on the market for Chinese art, noting that it is becoming gradually more difficult for western collectors to buy a range of Chinese art because of the growing collector base within the country. Describing the increasing numbers of Chinese bidders at antiquities auctions, Sallie Brady writes, “there’s a new dynamic afoot that promises to drive up prices: Mainland Chinese are entering the market in ever greater numbers.”
So for collectors who are interested in making bids on lots in the upcoming Sotheby’s auction, what should they know before they go head-to-head with Chinese buyers? Aside from doing their research to stay up-to-date on recent developments and informed about the past work and possible future longevity of the historical artworks that are up for grabs, it pays to know which lots are the “all stars.” I have looked through the catalog, and here is my list of the “Top 10” lots up for auction on October 6:
1.) Cai Guo-Qiang: Money Net No. 2 (2002)
Estimate: US$ 605,000-705,000 (HK$ 4,700,000-5,500,000)
Cai Guo-Qiang (born 1957, Quanzhou, Fujian Province) was educated in stage design at the Shanghai Drama Institute from 1981 to 1985. Gunpowder is his trademark medium, from drawings and paintings made by igniting carefully monitored explosions on paper and canvas to massive explosion events like Projects for Extraterrestrials. He is also known for sculptural installation works such as Borrowing Your Enemy’s Arrows (1998), a massive wooden boat riddled with arrows that recalls a legendary tactic of an ancient Chinese general. Cai has had many solo exhibitions, including Cai Guo-Qiang on the Roof: Transparent Monument at the Metropolitan Museum of Art (2006) and Cai Guo-Qiang: I Want to Believe at the Guggenheim Museum in New York (2008). He was awarded the International Golden Lion prize at the 48th Venice Biennale (1999), and curated the first China Pavilion at the 51st Venice Biennale (2005). He was the Chief Special Effects Designer for the 2008 Beijing Olympics’ creative team. Cai lives in Brooklyn.
Posted in Art, auction, China, Chinese Art, Culture, Investment, Museums
Tagged ai weiwei, Art, ash head, asia, asian art, auction, cai guo-qiang, cai guoqiang, China, chinese, chinese contemporary art, contemporary chinese art, east asia, feng zhengjie, hong kong, huang yongping, liu ye, mainland, october, sotheby's, wang qingsong, yue minjun, zeng fanzhi, zhang huan
Asian Auction Houses Looking Forward To Major Sales Of Chinese Contemporary Art, As More And More People Join Chinese Art Collectors
Top Chinese artists like Yue Minjun remain popular among Asian auctioneers and art collectors alike
Earlier this summer, we profiled several major art auctions, which brought in millions more than expected, in both Hong Kong and Taipei. The success of the HK09 art festival and Ravenel’s 10th Anniversary Spring Auction gave the Chinese contemporary art market a vote of confidence in May and June, and this fall Ravenel hopes to continue its momentum while further cementing its reputation as one of Asia’s preeminent auction houses with two upcoming auctions, to be held in both Hong Kong and Taiwan.
Ravenel’s first autumn auction of 2009, set to take place on November 30 in Hong Kong at the Four Seasons ballroom, should attract a good deal of attention from local and overseas collectors — particularly as it will take place after many other western and Hong Kong auctions in October — but particular interest may be paid to the second autumn sale, which will take place on December 6 at Taipei’s Fubon National Conference Center. As Ravenel is celebrating its 10th anniversary with this sale, and Taiwanese art collectors are renowned for their enthusiasm and occasional aggressiveness, this sale might be a highlight of the season. This is not to say that the Hong Kong auction will be low-key. Trend-watchers will keep a close eye on the makeup of bidders in Hong Kong, and if the demographics follow what we saw in the spring and early summer, it looks like local Chinese buyers will maintain their spot as one of the world’s fastest-rising collector classes.
Clearly, momentum in the contemporary Chinese art market shows that the global financial crisis, while it has bruised nearly anything and everything that can be an investment, has not slowed the new buyers from entering the market. Although Chinese collectors have “joined the party” later than many of their western counterparts, they are more than making up for it now as they become far more prevalent at contemporary art auctions in Hong Kong and elsewhere.
Posted in Art, auction, Business, China, Chinese Art, Culture
Tagged Art, asia, asian, asian art, auction, China, Chinese Art, chinese contemporary art, guardian, hong kong, poly, ravenel, taipei, taiwan
Western, Chinese Brands Vie For Customer Loyalty As Emerging Middle Class And “Nouveau Riche” Demand Continues To Grow
Buick has capitalized on its reputation for quality and luxury in the Chinese market, enjoying massive success and launching China-only models like the Excelle
As demand for new vehicles has remained sluggish in developed markets over the past two years, major automakers have rightly looked to retool their strategies to draw customers and build their brands in new markets. As we’ve written before, selling your brand in markets like China, where customers expect different things — and derive status from very specific brand attributes — represents both a major opportunity and a new challenge. A good example of an automaker that has benefitted from the “blank slate” allowed it by entry into the young Chinese market is Buick, which has a reputation as a car for older, or middle-aged, drivers in its native market, the USA, yet has — through aggressive branding and advertising efforts — developed a reputation as a sleek, luxurious, youthful brand in the Chinese market.
So how can car brands optimize their brand equity in China? Depending on where they come from, their strategies differ greatly. While American car makers like Ford have had great success in overseas markets like Europe by pushing their reliability and value, in the Chinese market imported cars are, generally, chosen by buyers to be a status symbol, rather than “inexpensive.” Ford, then, cannot compete on price alone, as Chinese automakers like Chery and Geely — which have sizeable lineups of entry-level models — will always be able to undercut them. As a result, it is important for foreign car makers to not just build their brand in China, but to build a strong brand in China, one that speaks to Chinese consumers in a way that domestically-produced autos cannot. To break it down further, foreign automakers need to build a strong, distinctive brand — a German car must fit Chinese conceptions of German cars, Japanese cars Japanese attributes and so on.
In practice, how are foreign automakers faring in their Chinese branding strategies? Today, Reuters looks into the “uphill road” these brands are traveling in China, and how they have refocused their branding strategies to varying degrees of success. Using the example of a “nouveau riche” car buyers who has traded his BMW in for an Audi — since the Audi has developed a strong reputation in China as a car for bureaucrats or (comparatively) “old money” while BMW is considered a brand for the nouveau riche (a group into which the buyer in question is loath to be grouped) — the article provides valuable insight into the particularities of a market so new that even seasoned marketers and branding execs are often at a loss to develop long-term strategies.
Posted in Automobile, Business, China, Culture
Tagged america, asia, Audi, auto, bmw, brand marketing, brand strategy, branding, buick, chery, China, chinese, east asia, europe, ford, geely, japan, japanese, korea, marketing, nouveau riche, old money, south korea, strategy
Pudong Shangri-La Still Enthralls Guests And Sets The Standard For “Luxury With Chinese Characteristics”
The Pudong Shangri-La in Shanghai offers stunning views of the waterfront
The five-star Pudong Shangri-La, one of the crown jewels of Shanghai’s skyline, continues to draw accolades from seasoned global travelers, who are consistently struck by the hotel’s extravagance as well as its unique story. Having begun construction when Shanghai’s Pudong section was scarcely more than a marshland, the Shangri-La quickly established itself as one of East Asia’s finest luxury hotels. With the newest extension (finished in 2005) adding even more opulence to the striking building, travelers have even more reasons to make this coastal city a stop on their next Asian business or tourism jaunt.
Today, Robert La Bue makes the Pudong Shangri-La the target of his “Mr. e-Traveler” column, writing, “It’s always a pleasure to return to a hotel that feels like home. The fact that a 948-room property can pull this off is a credit to Pudong Shangri-la.”
As La Bue goes on to note, the hotel’s unique international and Chinese appointments set it apart, even among other world-class five-star luxury hotels:
Posted in Business, China, Luxury
Tagged asia, China, chinese, east asia, five star, hotel, Luxury, mainland china, pudong, shanghai, shangri la, shangrila
Fall Auction Season To Be Packed With Chinese Arts, From Antiquities To Contemporary Pieces
Arthur Sackler amassed an impressive collection of artwork in his lifetime, including rare Chinese furniture, ceramics, and paintings
Carol Vogel writes today in the New York Times about the upcoming Sotheby’s auction of pieces (to be held September 16), which includes many pieces of Chinese furniture and artwork from the collection of Dr. Arthur M. Sackler — “the psychiatrist and philanthropist who became one of the leading art collectors in the United States.” Vogel points out that this sale will offer not only Chinese works but valuable works from Sackler’s extensive collection of European Impressionists and sculptures as well.
Of course, to us, it is the sale of some of Sackler’s enviable collection of Chinese art and furniture that is the most interesting. According to Art Daily, this Sackler auction includes many rare and exotic pieces dating back as far as the 17th century:
Posted in Art, auction, Business, China, Chinese Art, Culture
Tagged arthur m sackler, artwork, asia, asian, asian art, auction, ceramics, China, Chinese Art, furniture, jade, new york times, painting, sale, sotheby's