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
Company Predicts Continued Growth Throughout The Mainland In Coming Years, Despite Continuing Global Recession
Gucci opened its 28th China location this weekend; the company sees China as a cornerstone of its ongoing global strategy
We have written extensively over the past few months about western luxury brands continuing to grow in China despite difficulties in their traditional markets — North America, Europe, and Japan — and how second and third-tier cities are key to these luxury brands’ China strategies. This week, Gucci announced plans to open 2-4 more new China locations by the end of 2009 — while this may sound like a pretty insignificant number, given the size of the country, in these slower economic times it is big news. Currently, the brand has 28 locations in China — with their newest one opening this weekend — and Gucci appears undeterred in their growth plan by uncertainty in the global economy, as the company sees China as poised to lead future luxury consumption.
The Guardian posts this week on the company’s long-term China strategy, which sees the company projecting upwards of 40 stores within the next few years, as it scales back its presence in slowing developed markets and focuses more intently on cracking (and sustaining a presence in) China:
Gucci and Ferragamo Join Burberry In Opening New China Locations In ’09
Ferragamo in Shanghai: The Luxury brand hopes to add 7-8 locations in China this year. Photo © Time
The Mercury News reports today on hopes by luxury retailers that well-heeled Chinese shoppers, who have cut back less than their Western and Japanese counterparts, can buoy the luxury goods market enough to get them through the economic downturn. While China itself has been hit hard by the global economic downturn — particularly in its manufacturing and export sectors — a series of domestic stimulus packages and efforts to bolster consumer confidence have begun in earnest to take effect (as we have written before). Although a broader recovery, especially in the more rural or far-flung areas, will take some time, in China’s metropolitan centers like Beijing and Shanghai, the wealthy and upper-middle-class have continued to shop. And for that, luxury brands from around the world are looking at this consumer class as one of their few bright spots in the global economy.
Posted in Business, China, Economics, Economy, Fashion, Investment, Luxury
Tagged chanel, chateau lafite, China, coach, Economy, ferragamo, global economic crisis, gucci, hermes, louis vuitton, Luxury, porsche, shopping