Spanish Luxury Exporters Look To China As New Market For Rare And Expensive Ham, Jewelry
Spanish ham producers are hoping to get their products associated with wealth and sophistication in China
When people think of China — or the eating habits of urban Chinese — they probably don’t think of Spanish ham. But if Spanish ham producers have their way, China will be one of their top markets in coming years. Recently, after years of trade negotiations, Spanish ham was given the greenlight in China, after which they began a marketing blitz designed to get their products associated with wealth, luxury, and distinction among wealthy Chinese. To start off this marketing effort, a Spanish ham tasting event was held recently at Beijing’s LAN Club, one of the city’s most exclusive restuarant/nightclubs, along with a Spanish jewelry modeling show. Additionally, ham producers began a simultaneous effort to woo Japanese residents in China’s major cities, as these consumers — some of the world’s most seasoned luxury buyers — are already familiar with Spanish hams and require less dedicated marketing efforts.
As the Latin American Herald Tribune writes, as for every industry the Chinese market has great potential as a destination for ham producers, but it won’t be easy to convince Chinese buyers to spend top dollar on a culinary product with which they’re not that familiar — particularly in the age of swine flu:
The ham, produced in Extremadura by the Montesano company and distributed in China by the Olivarero Chinese Spanish Consortium, or COCE, was the star of a luxurious and glitzy evening at the distinguished club, although the jewelry of Madrid designer Paloma Sanchez, who has a store in Beijing, was also prominently featured.
“This is an event to launch the ham in Beijing, to see if there’s any demand and position (it) as an exclusive luxury product, for the upper class. Therefore, we’ve accompanied it with the jewelry show,” said Daniel Martin, COCE’s general director and the organizer of the event.
Posted in Business, China, Investment, Luxury
Tagged beijing, branding, China, COCE, extremadura, food, ham, japanese, jewelry, Luxury, marketing, montesano, olivarero, paloma sanchez, spain, spanish, trade, wealthy
Studies Indicate Sluggish Demand In Established Markets Will Continue As Buyers Remain Motivated In China
According to new studies, Chinese luxury enthusiasts may help buoy the global luxury market for the next few years, if not drive long-term growth
Luxury brands have had what can conservatively be called a tough year, with the global economic crisis putting a gaping wound in their profits in traditionally high-demand countries like the US and Japan, and recovery lagging behind expectations. These figures have been tempered somewhat by the potential of the Chinese market to soften the blow of falling demand elsewhere, if not counteract it completely. While it is still a bit quixotic to expect China to be the savior of luxury brands everywhere — since it is still very much a developing market — it does benefit luxury brands to plan ahead for the time when China is the world’s biggest luxury market, and start brainstorming on their long-term strategy for sustained growth as well as strong brand loyalty.
This week, Harvard Business looked into the Chinese luxury market, digging through statistics to discern whether this market truly is all it’s cracked up to be. While their findings suggest that hyperbolic enthusiasm about the Chinese consumer is unwarranted — as we’ve written before — they do remain bullish about the potential of this populous and fast-moving market:
New research from McKinsey & Co. indicates that, by 2015, China will be home to the world’s fourth-largest population of wealthy households, an estimated 4.4 million. McKinsey also reports that presently, about 80% of China’s wealthy are between the ages of 18 and 45 (versus 30% in the US). Jing Ulrich, the chairman of China equities at Morgan Stanley, was recently quoted in Forbes as saying of China, “With the global recovery unlikely to be smooth, domestic demand is likely to remain the primary engine of growth in the remainder of 2009.” In a Wall Street Journal op-ed last year, Zachary Karabell argued that “the rise of the Chinese consumer is the only thing standing between them [global companies] and a decline in their business.”
Posted in Business, China, Culture, Fashion, Investment, Luxury
Tagged branding, brands, China, chinese, consumer, Fashion, internet, Luxury, marketing, markets, online
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
Multinationals Hope Domestic Consumption, Inland Movement Will Counterbalance Drop In Exports
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.
Posted in Automobile, Business, China, Culture, Economics, Economy, Fashion, Investment, Luxury
Tagged Apple, Audi, branding, Business, China, china market, computers, consumer, founder, geely, JNBY, louis vuitton, marketing, panamera, porsche, shanghai, shanghai auto show, strategy
The Young Generation To Reject Frugality, Major Metropolitan Areas for Free-Spending Decadence?
Shoppers in Shanghai: Can We Expect Similar Scenes in China's Interior Soon?
While I’m iffy about Forbes’ China reporting, which tends to rival the Wall Street Journal’s for selective fact-finding and conjecture, I found this article on China’s young generation to be pretty interesting. While it is well-established that the under-30 crowd in China — who grew up in the post-Deng Xiaoping capitalist era and, as such, has no recollection of or interest in the staid, poverty-stricken Maoist period — is the polar opposite of their parents’ generation, not so much attention has been paid to their spending habits and rejection of traditional Chinese financial characteristics.
Posted in Business, China, Culture, Economy, Fashion, Luxury
Tagged China, chinese, consumer, demographics, deng xiaoping, kaifang, Luxury, mao zedong, marketing, shopping
American Luxury Brand Bullish On Chinese Consumer Demand For Luxury Goods
FT has a brief story today on comments made by Lew Frankfort, Chief Executive of Coach, about the potential for competition between foreign and home-grown luxury brands in the growing Chinese market:
Lew Frankfort said the worldwide economic slowdown was set to raise further China’s importance to the luxury goods sector, not just as a manufacturing centre but, more significantly, as a growing consumer market.
While Coach announced in January that it would halve its rate of expansion in North America, reducing the number of annual store openings there from 40 to 20, Mr Frankfort said he was likely to accelerate development plans in China.
Speaking at the end of a visit to China, he said: “I am leaving this trip with a view that our numbers might be conservative . . . We see sophisticated [Chinese] consumers shopping and international brands thriving.”
Coach estimates that China will represent 10 per cent of the $25bn global luxury handbag and accessories market by 2010. The US group currently has 17 shops in mainland China, in addition to eight stores in Hong Kong and two in Macao.
Posted in Business, China, Culture, Luxury
Tagged Business, China, chinese market, coach, competition, Luxury, mainland china, marketing