Friday, December 24, 2010

The Complex and Highly Lucrative Luxury Market in China

New Hermès Paris Flagship “A Way Station On A New Silk Road”
This week, Suzy Menkes of theNew York Times takes a look at the new, super-sized Hermès flagship in Paris, a temple to international commerce she describes as “a way station on a new Silk Road, designed as a destination for shopping tourists, who increasingly come from China.” ...
"...The lure of lavish flagships, in Paris as in elsewhere, to Asian luxury consumers hasn’t faded over the past 30 years, even as Japanese tourist-shoppers have been supplanted by South Korean, then Taiwanese, and now mainland Chinese. In their 2006 book The Cult of the Luxury Brand: Inside Asia’s Love Affair With Luxury — critical reading for anyone interested in the Asian luxury market..." >>Continue Reading

December 10, 2010 from Jing Daily

On the shortlist for “Brand of the Year” at the upcoming Cultural Heritage Awards in Beijing are Montblanc, Louis Vuitton ( LVMUY.PK , and Shanghai Tang, selected by judges based on the cultural activities and events each held throughout the year and the integration of cultural elements seen in their products. From theBeijing News (translation by Jing Daily team)....
...Q: Many brands are concerned with passing on their cultural heritage. What do you think this means in an era of reform and innovation?
A: Inheritance is valued, so the concept of each brand has value. Innovation is the new form of expression of these values. For me, tradition and innovation share a common path — if there’s no innovation, there’s no heritage. And without heritage, innovation has also lost its foundation. Those [brands] that can connect emotionally with the young will be the most bullish and are bound to stand out.
Q: What type of brand do you think can lead youth fashion culture?
A: I don’t think young people pursue luxury goods or extravagant spending, they’re more interested in collaboration and change. So I think practicality is important. On the other hand, I really like stylish pieces, for example H&M’s designer collaboration series.The recent collaboration with Lanvin really caught on among young people in China — it was very fresh and individualistic, and consumers desperately sought the collection out. So I think a brand that can lead youth fashion culture employ a combination of practicality and individualism."  >> Continue Reading

Related Reading: 

  1. The Brand Life Extensions for Swiss Montblanc , December 10, 2010 from 
  2. Montblanc Rides on Luxury Demand, November 16, 2010 from People's Daily Online
China's High Speed Rail Network by 2020
image from The Infrastructurist "Just How ‘Invincible’ Is
China’s High Speed Rail? It’s Hurting Air Travel
April 2, 2010 from Shopping In China Blog
Please note: this article was most likely translated from Chinese to English, as a result the sentence syntax is off... however, it is still filled with great info. So please have 'patience young grasshopper'....
"...Boston Consulting Group predicted China’s luxury goods consumption in 2015 will account for 32% share of the world, China, or in 2015 to become the world’s largest luxury goods market. So, who will become a major consumer of luxury goods groups in China? The future of the Chinese luxury goods in the end of spring will appear?...
"...Also attended the second China-EU Business School, the top brand Montblanc Summit (China) Limited, Mr Lu Xiaoming, (CEO said in an interview, “In my view, China’s middle class is developing, mature and grow. the next 30 years, they can become the backbone of consumption in low-end luxury goods. ' ..."
"....If you need to target in the next 10 years, “China’s rapid construction of high-speed rail will also have the layout of a luxury brand in China a tremendous impact.” ... city to city traffic circle between the 6 hours will be formed. This will reduce the first-tier cities and secondary cities... while such traffic conditions will change consumption in these areas who’s spending habits. in front of them, luxury goods and luxury goods stores of choice will be even richer. In this urban development situation, and choose to line the city or the second and third tier cities shop, compared to cities Which local shop seems more important..." >> Continue Reading

Bypassing Japan, Spanish Fashion Brand 'by basi' Makes Asia Debut in Beijing
December 14, 2010 from Jing Daily

While the trend last year in the fashion industry was to close down stores in stagnant markets like Japan and open new ones in emerging markets like China, it appears that the trend next year could be to bypass Japan altogether. Recently, the Spanish brand “by basi,” the leisure line by designer Armand Basi, opened its first-ever Asian location at the Gate (中关购物中心) in Beijing.
....Possibly enticed by the success of its Spanish fast-fashion counterpart Zara — which now operates nearly 50 stores in mainland China — by basi has apparently decided that greener pastures lie in China than in ultra-luxury-obsessed South Korea or in the tough Japanese market...." >>Continue Reading

Korean Cosmetic Brand Sulwhasoo To Enter China Market
December 15, 2010 from Jing Daily 

Along with pop music and soap operas, the “Korean Wave” also brought to new markets like China a flood of high-end cosmetic brands, intent on eroding the market share of established Japanese competitors and home-grown Chinese upstarts alike. Over the last 10 years, as China’s middle class has grown along with the premium placed on beauty, one of the South Korean brands that has benefited the most from increasing consumption has been one of the largest, Amore Pacific. Entering China initially with a mass-market focus designed to undercut more expensive Japanese, European and American brands, over the years Amore Pacific has introduced its more premium lines to capture a bigger piece of mainland China’s lucrative cosmetics market, which is expected to rake in about 80 billion yuan (US$12 billion) this year....
...Taking a marketing approach remarkably similar to the one employed by Hermes’ new China sub-brand, [see related news from 12/24/2010 regarding LVMH ( $LVMUY , $MC )and Hermès International here ]Shang Xia, Sulwhasoo promotes its line of high-end cosmetics with the phrase, “Made One with Wisdom and Sangseng” — sangseng (相生 in Chinese) meaning, “the opposite harmony between two energies.” ... >>Continue Reading

Related Posts on the topic of the Lucrative Luxury Cosmetic Market In China

Herborist:A Successful Chinese [Cosmetics] Brand , October 14, 2009 by Simon from Enovate
"...Herborist’s product range is not too dissimilar from it’s competitors, showcasing the usual creams, face packs and moisturisers. Where their strength lies however, is the specifically Chinese niche they have found  in a highly globalised industry whereby nationality and cultural references play a large role in marketing (Shishedo = Japanese purity, MAC = American sexiness, etc).
The brand cleverly distinguishes itself by “intergrating Traditional Chinese Medicine into the latest fruits of modern biotechnology”, as stated on their website. Imagery and even product innovation all make relevant nods to traditional Chinese, such as their nourishing and cleansing ‘Tai Qi Mud’, which promotes the Chinese aesthetic of balance through its yin-yang design and application process...."  >> Continue Reading

Beijing Sanlitun North Village- New heart of luxury brands in Beijing  By Tim  from LOokOut Beijing spots

63% of Beijing white-collar workers buy luxury cosmetics
, 48%  purchase luxury bags, 45% wear luxury watches, and 40% have premium-brand clothing" >> Continue Reading

New Chinese Nobility Crazy for Luxury Goods

March 2, 2010 From Global Times

According to the statistics from the World Luxury Association (WLA), by the end of December 2009, the total consumption of the luxurious goods in Chinese market had reached $9.4 billion, making up 27.5% of the world's total and becoming the second largest market for luxury groups in the world, after Japan.

The public eye has been drawn not only to how the rich in China became wealthy, but how they spend their money.

Rupert Hoogewerf, founder and compiler of the Hurun Rich List, said that he prefers to call Chinese billionaires the "new nobility"...." >> Continue Reading

World Luxury Association - here is what looks like an interesting association which is referenced on several blogs / sites including Jing Daily, China Daily, and Global Times ... however, once again, I'm too cheap to actually buy a subscription/membership to check it out :-)

Porky Pig

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