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Dunhill Fuses Brand And Lifestyle In Shanghai

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

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.

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Martell’s $3,600 Cognac Sells Out as Chinese Splurge – Bloomberg

Demand For High-End Liquor Remains Strong In China, Following Massive Turnout At Wine Auctions Earlier This Year

Huge in China - Martell's $3,600 per bottle L'Or cognac

Huge in China - Martell's $3,600 per bottle L'Or cognac

Bloomberg reports that cognac brand Martell has sold out of its $3,600-per-bottle L’Or cognac, mainly because of strong demand in the Chinese market, where cognac has increased in popularity rapidly over the past 15 years. As developed markets like the US become less dependable in the face of economic concerns and consumer cut-backs, distillers have had to look eastward, and the growing popularity of cognac, wine and other liqueurs has counteracted the falling demand in other global markets.

In East Asia, much of the success of cognac depends on the China market, where Chinese drinkers have responded well to branding and marketing efforts of brands like Martell and Hennessy, and brand tie-ins have boosted the visibility and consumer recognition of major brands. And although Martell still lags behind Hennessy in the Chinese market, major initiatives like television sponsorship and bar promotions have significantly boosted their market share in the last few years. As an earlier Bloomberg article points out, “[Martell’s parent company] Pernod has established a strong foothold in the Chinese market, overtaking Rémy Cointreau Group for second place, with 26% market share, compared with Rémy’s 20%, as of 2007, the latest data available from Euromonitor. Both companies still lag behind leader LVMH Moët Hennessy Louis Vuitton, which holds a 44% market share.”

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China’s Luxury Market Expected To Avoid The Worst Of The Economic Crisis

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

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?

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Coach Appoints New China President, Eyes Rapid Mainland Expansion

Andre Cohen (LVMH, Swatch, Timberland) Responsible For Leadership & Results Of Coach China — Including Mainland, Hong Kong And Macau

Coach opened one of its largest Asian locations in Hong Kong last summer: The company is looking to expand quickly in the lucrative Mainland market as well

Coach opened one of its largest Asian locations in Hong Kong last summer: The company is looking to expand quickly in the lucrative Mainland market as well. Photo © Hong Kong Hustle

It is no secret that American luxury brand Coach has its sights set on the rapidly-growing Chinese luxury market — we have written before on the company’s long-term growth strategy in the Greater China region. As other luxury brands enter the Chinese market, many of them focusing on the country’s burgeoning second- and third-tier cities (where middle-class growth is expected to grow the fastest), Coach is retooling its marketing and brand positioning platform to become even more competitive.

The company’s newly-appointed China Region President, Andre Cohen, who is due to begin his job next month, has a great deal of experience building western brands in the Asia-Pacific region — having spent time in Singapore, Malaysia, and Japan working for Timberland, Swatch, and LVMH — and Mr. Cohen’s plans for the China market are shaped by his successes with these brands in other Asian markets.

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Luxury Brands Look To Shoppers In China For Cushion In Crisis

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

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.

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Will Chinese Consumers Rescue The World Economy?

Multinationals Hope Domestic Consumption, Inland Movement Will Counterbalance Drop In Exports

The world's target market

The world's target market

CNN reports today on the hopes of many western investors and CEOs for the rise of the Chinese consumer to help lift up the sluggish global economy. With slowly-increasing consumption rates in a country still highly populated by savers rather than spenders, redoubled efforts by western and Japanese companies to retain and expand their customer base shows that they understand that the Chinese market — with its vast potential but cut-throat competition — is critical for their global strategy.

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Chinese Consumers Keep Spending – Good News For Economy

More People Shopping Amid Positive Signs From Economic Stimulus Plan

Businesses and Politicians alike hope China's stimulus measures kick-start the economy and drive consumer spending as consumers in developed economies hunker down. Illustration © The Economist

Businesses and Politicians alike hope China's stimulus measures kick-start the economy and drive consumer spending as consumers in developed economies hunker down. Illustration © The Economist

The Wall Street Journal just posted an informative story about increased spending amongst Chinese consumers, as savings rates drop in younger consumer segments and more first-time car buyers take advantage of small-engine subsidies and overall lower prices on big-ticket items. These habits, of course, turn tradition upside down, as consumers in developed countries save more and hold off on purchasing new automobiles or real estate as the financial crisis continues. Although Chinese consumer confidence is tentative and somewhat fragile, consumers are responding to discounts and other moves by retailers to entice potential customers. Interestingly enough, the macro-level improvements in consumer confidence are boosting sales for companies who have not received any direct benefit from the economic stimulus:

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