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    China'S Luxury Market 100 Points, Luxury Brands 0 Points

    2010/4/4 18:43:00 49

    Luxury Goods Market

    Under the influence of the international financial crisis, the international luxury market is weak, but the Chinese market is going against the trend. Last year, the total consumption of luxury goods in China amounted to 9 billion 400 million dollars, and the global share of 27.5% was the second largest luxury consumer in the world.

    However, in the face of the huge potential of luxury consumption in China, the luxury industry in China is facing an embarrassing fact that none of the global luxury brands is from China.


    Why does China not have its own brand as the second largest consumer of luxury goods?

    When will China's luxury brands reach the international stage, comparable to the top brands such as GUCCI and Armani?

    In March 27th, "China Europe 2010 second top brand Summit Forum" held by CEIBS, global luxury industry leaders and deep industry scholars explored the creation path of China's luxury brand.


      中國奢侈品市場有多大


    "There's such a story circulating among luxury executives."

    MicheleNorsa, chief executive of Ferragamo, told reporters that in a French luxury store in some place in China, a handbag valued at 999 thousand and 999 yuan, which was borrowed from the French general store as a treasure of the town store, was bought by cash in a few days after the exhibition.

    In order to clear a huge amount of money, the store was forced to stop business for a day, "this is the charm of the Chinese market."


    How big is China's luxury market?

    A set of data may be more clearly stated.

    The World Luxury Association estimates that last year, China's total consumption of luxury goods amounted to 9 billion 400 million US dollars, with a global share of 27.5%, becoming the second largest luxury consumer in the world after Japan.

    Boston consulting firm expects that by 2015, China's total value of luxury goods is expected to reach 248 billion yuan, replacing Japan as the world's largest luxury market.


    Not only is China's domestic luxury consumer market huge, but Chinese people also extend their spending power overseas.

    During the Spring Festival this year, thousands of Chinese tourists went to New York to earn RMB 30 million yuan.

    It is said that the largest department store in the United States, Messi department store, The Empire State Building in New York and Cartire, the top jewelry sales company, set up special programs for Chinese customers.

    The report of the global return group, a well-known French shopping rebate service organization, shows that Chinese tourists spent about 158 million euros last year in the global return group's shopping mall in France, accounting for 60% of the rebate shopping volume in France, and Chinese tourists became the largest tourist consumer group in France.

    According to statistics from Boston consulting company, 95% of the main activities of Chinese tourists in Europe and America are shopping activities, of which luxury consumption accounts for 70%.


    Even more encouraging to the luxury goods industry is that with the rapid development of China's economy, the consumption power of Chinese luxury goods will increase every year in the next few years.

    Morgan Stanley pointed out that when the per capita GDP reached US $2500, the consumption of luxury goods will rise sharply, while China's per capita GDP has exceeded US $3000. We can expect that China's luxury consumption will show "explosive growth" in the next few years.

    Lu Xiaoming, managing director of MontBlanc (China) Limited, told reporters: "a lot of luxury brands are rooted in the first tier cities of Shanghai, Beijing and Guangzhou. But 80% of the people who have strong spending power are living in two or three line cities, that is to say, 80% of China's luxury goods market has not yet been developed."

    Wang Depei, vice president of the China Economic Restructuring Research Association, said: "in the next ten years, China's pportation urbanization and the vigorous development of capital and finance will push the development of luxury brands in China."


      為何沒有中國品牌奢侈品


    Such an attractive market has attracted many international luxury brands to "grab" China.

    Luxury stores, which are opened in major cities in China, needless to say, even the international top private goods exhibition, which was originally held in luxury countries like Monaco, was held in China last year.

    But in the commercial battle that took place in China's local market, we could hardly see the accession of Chinese brands.

    "On the fertile soil of luxury consumption in China, the top manufacturers abroad are always the best singers, while local businesses are the most supporting actors."

    One participant said.


    Lu Xiao, an assistant professor of management at Fudan University and a luxury goods expert, told reporters that luxuries need six functions: absolutely excellent quality, perfect production process, long history tradition and legendary brand story, scarcity and uniqueness of articles, advanced aesthetic feeling, multi-level emotion and non functional design.

    "In terms of these six criteria, China does not have luxury brands."


    In fact, there are many luxury stories in ancient Chinese stories.

    Zhang Zhifeng, the founder and art director of the tiger tiger Fashion Co., gave three examples to reporters. First, in the Han Dynasty, Zhang Qian sent to the western region to open up the Silk Road, and then brought the best Chinese silk to Rome by the Persian, and caused the Chinese trend in Rome. Two, in the Tang Dynasty, the clothes were various and colorful, and had been spread abroad. Now, some dresses design can also see the shadow of the Tang costume. Three, in the Ming Dynasty, Zheng and seven went to the Western Ocean, sending Chinese porcelain and tea to overseas and attracted many foreigners.

    Only because of the restriction of the feudal system, Chinese tea, porcelain and silk have not yet formed a brand.

    Zhang Zhifeng explained.


    In the past 30 years since reform and opening up, China's economic system has been relatively perfect and its economic environment is relatively loose. Why hasn't China developed its local luxury brand?

    Lu Xiao believes that there are three main reasons: first, the luxury brands have reached the level through time, quality and capital accumulation, and since reform and opening up to 30 years, such a short time is far from enough to create a luxury brand. Two, because of China's long-term capital shortage, the capital allocation channel is not smooth, so that we do not have enough capital to enter into the connotation of the brand, luxury products and scientific research. The brand is hard to have enough life. Three, because the mode of operation of luxury goods is totally different from the general products, it is also "imported products", and at present, there are few management talents who really understand the operation of luxury goods in China.


    When will China's luxury brand rise?


    Then, when will China create its own international luxury brand?


    The international luxury management consulting firm once optimistically predicted that in 20 years' time, in the center of "luxury kingdom", Paris will see China's luxury brand.

    However, most industry leaders and industry experts are cautious about this. "Luxury brand building can not be completed by a generation of capital, so it can not be twenty or thirty years.

    Entrepreneurs need to invest in the money, time and effort needed to build a brand, and the government must have enough patience to create suitable soil for luxury growth.

    MicheleNorsa, chief executive officer of Ferragamo group.


    For the bottleneck of China's luxury brand development, Lu Xiao believes that the biggest problem now is the shortage of talent.

    "Some domestic Brand Company choose students to conduct directional training in Colleges and universities, so that these students can serve the company after graduation, but Brand Company is very scarce from the middle level to the senior managers.

    How to train local talents also needs Chinese local luxury companies to explore together.


    Experts suggest that China must give full play to its advantages in building local luxury brands.

    First, China's long history of thousands of years is the basis for the emergence of luxury brands.

    History has proved that luxury brands reflect a culture positively, such as champagne combined with the culture of French aristocratic lifestyle.

    Therefore, whether it is the silk culture in the clothing industry, the jade culture in the jewelry industry, or the inheritance culture in the liquor making industry is the cornerstone of China's own style luxury.

    Of course, in addition to cultural elements, we must catch the fashion trend and connect with the international situation.

    Wang Xingzheng, chairman of Cci Capital Ltd of Shanghai Yongfu Association, said.

    Second, China has superb manual technology level.

    The most important part of the luxury industry is exquisite handicraft. China has never been short of skilled craftsmen.

    Only by developing the handicraft technology can China's luxury brand's production and quality be lost to international brands and even beyond them.


    "China wants to launch its own luxury brand. At the specific operational level, it is necessary to establish a leader in the industry, and the two is to have a creative brand designer and promoter. Finally, the unique product creativity and lifestyle will be the driving force for luxury goods."

    Experts say.


    Source: Liberation Daily

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