American Retailer Looking To Target Lucrative (And Still-Growing) Chinese Tourist Market?
Is Macy's going to push for more brand recognition among Chinese shoppers?
For years, American retailer Macy’s has adopted several strategies to entice foreign tourists to spend more at its flagship location in New York’s Herald Square, from discount cards for international shoppers to promotions tied to free coupon books. As the global financial crisis bit down on New York tourism in the last year, there are signs that stores like Macy’s may be looking abroad to markets they have never before targeted specifically, namely China, where the number of tourists traveling overseas has skyrocketed in the last 20 years. Cities like New York, where travelers from places like mainland China tend to spend most of their time shopping, are expected to benefit the most from the oncoming wave of Chinese tourists, and since the relaxation of some travel restrictions last year, a noticeable rise in Chinese tourists has already been noted in New York — where Chinese spend an average of $2,200 each, making them the city’s most profligate foreign tourists.
With its size, midtown location and historical pedigree, Macy’s has always appealed to foreign tourists looking for a “New York shopping experience” (or those who just want to take advantage of a comparatively weak dollar to stock up on clothes). If Macy’s truly wants to target the Chinese market, and get a larger slice of the Chinese tourist dollar, they would be well advised to learn a few cultural particularities about Chinese tourists:
1.) Chinese travelers love giveaways…and will go out of their way to get them
Posted in China, Culture, Luxury
Tagged bus, China, chinese, ferrari, gray line, gucci, guidebooks, louis vuitton, Luxury, macy's, manhattan, midtown, New York, porsche, prada, shopping, sightseeing, tour groups, tour guides, tourism, tourists
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
Middle Class Estimated At Upwards of 150 Million And Growing; Consumers Hungry For Entry-Level Luxury Products That Offer Status As Well As Quality
Spending by China's middle class is expected to grow exponentially in the next 20 years. Graphic © Foreign Policy magazine
It has become a well-established fact that companies of all stripes are looking at the Chinese market as a source of sustainable revenue over the long term, as the country’s growing middle class increasingly becomes a consumer class on par with many more established markets. However, as many brand marketers — particularly from western countries — have found, reaching the Chinese consumer can be a complicated task, as the Chinese market differs greatly from other developing and developed markets…another well-established fact.
Today, Investopedia examines two strategies that have been adopted by western brands like Luxottica and Coach in their quest for market share in China’s huge, competitive entry-level luxury market. While it will be incredibly difficult for ambitious brands to unseat luxury powerhouses like Gucci, Louis Vuitton and Porsche in China, as this article notes, brands that adopt a specifically China-centric strategy when dealing with the middle class may create a strong foundation for future growth:
Posted in Business, China, Culture, Economy, Luxury
Tagged asia, China, coach, Economics, Economy, emerging, gucci, louis vuitton, Luxury, middle class, porsche, spending
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
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
As Ranks Of High Net Worth Individuals Continue To Grow, Luxury Marketers Need To Adapt Creative Techniques For Chinese Market
A number of reports released this year have identified China’s millionaire class as one of the world’s fastest-growing high-net-worth demographics, outpacing nouveau riche in other emerging economies like India and Russia. With China’s massive economic growth over the past 30 years, and vast population size, this is no big surprise. Unlike their non-Chinese counterparts, this group of wealthy individuals — who are rapidly becoming among the favorites of luxury brands — present unique challenges for marketers who have become accustomed to emerging luxury consumers simply springing for the most expensive items regardless of brand outreach.
Today, an article in PR Inside delves into the still-undefined world of the Chinese luxury consumer — a consumer segment that attracts lots of press but little new insight or clarity. Since China’s wealthy population remains highly stratified, with sophisticated, long-time buyers concentrated primarily in coastal, first-tier cities and newer, first-time buyers spread throughout second- and third-tier cities as well as the odd frontier town, the Chinese market presents a difficult challenge for brand marketers. One-size-fits-all marketing strategies simply will not do in a country the size of China, and the message for Shanghai or Beijing’s consumers won’t translate to other regions.
Posted in China, Culture, Economy, Fashion, Investment, Luxury
Tagged China, Culture, gucci, Investment, Luxury, prada
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
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.
Posted in Automobile, Business, China, Economics, Economy, Fashion, Investment, Luxury
Tagged bmw, China, china daily, gucci, LV, LVMH, panamera, porsche
Growth Of Brands Like Gucci, Burberry In The Mainland Shows Growing Faith In Chinese Consumer Among Western Luxury Retailers
Luxury brands like Louis Vuitton have stormed the mainland in the last five years, growing quickly even in second- and third-tier cities, as consumption rates in developed markets slow
As signs that the worst of the economic crisis may have passed are increasingly pointed out by Bloomberg, The Wall Street Journal and others, attention has spread to the beleaguered global luxury market. While growth in this market has come to a screeching halt in traditional markets like Japan and North America as consumers cut back, analysts have predicted that the corresponding rise of the Chinese consumer — a rise that has been expedited by the Chinese government’s rapid shift to promoting a consumer-based, rather than export-based, growth plan — helps luxury brands ride out the ongoing global slowdown. According to many luxury CEOs, the key to their brands’ continued survival and expansion in this market lies solely in emerging markets like Russia and China. So the question has become, will it be enough to keep these brands afloat?
Posted in Business, China, Culture, Fashion, Luxury
Tagged bloomberg, BRIC, China, chinese government, christian dior, consumer, gucci, hennessy, japan, louis vuitton, Luxury, LVMH, recession, russia, seeking alpha, versace, wall street journal
Macau, Having Already Surpassed Las Vegas As A Gambling Destination, Sets Its Sights On Cultural, Culinary Offerings To Lure Tourists
Macau has quickly established itself as the "Vegas of the East"
Read more here.
Since its handover in 1999, Macau has rapidly become one of Asia’s top destinations for gambling, luring thousands of gamers from mainland China and Hong Kong. If Macau’s tourism department has its way, though, the city will soon be as renowned as a cultural destination as well — playing on its unique blend of Portuguese colonial and Chinese culture, architecture, and culinary traditions. Although construction of luxury apartments and casinos has slowed somewhat due to the global economic crisis, the city looks at the continuing growth of the Chinese tourist as a way to buoy a relatively sluggish tourism season.
Macau is unique in that it has, much like neighboring Hong Kong, combined two disparate cultures over the centuries to the point where they no longer seem distinct but instead form the one-of-a-kind Macanese culture. The city has also combined the entrepreneurial, fast-paced culture of China’s biggest cities with a fascinating mix of people, cultures, and languages, making this one of the world’s most exciting, truly global cities. The city has also become one of East Asia’s luxury hubs.
Posted in Business, China, Culture, Fashion, Luxury
Tagged afrikana, asian, China, cirque de soleil, coach, Culture, european, gambling, gucci, Luxury, LV, macao, macau, manolo, MGM, portuguese, prada, shopping, tiffany, tourneau, venetian, versace