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    A Contest Between Chinese Luxury Brands And International Brands

    2010/8/9 21:38:00 56

    Luxury Brand International Brand

    According to Hongkong media reports, with the growth of China's rich and middle class, many luxury brands are spared no effort to expand the Chinese market. The market expects that China will become the world's largest luxury market in 5 years.


    Therefore, many

    Luxury brand

    In the past ten years, China has entered the Chinese market through agents and joint ventures. Now they are turning to their own financial and marketing capabilities to attack the Chinese market, and many international first-line brands have seized the power of Chinese agency to earn more profits.


    According to Reuters, Burberry said in July this year that it plans to purchase 50 franchise stores in 30 cities in China with a price of 70 million pounds (about 753 million yuan), which can raise its operating profit by 20 million pounds (about 215 million yuan) in the 2011-2012 year.

    Longchamp, a French handbag manufacturer, is also planning to acquire its Chinese distribution channel and has formed a Chinese team responsible for its administrative business.

    In addition, the US luxury brand Polo Ralph Lauren also bought the right to distribute China from Disheng.


      

    Burberry Polo

    Redemption of distribution rights


    According to Bain & Co., China is now the second largest luxury market in the world. In 2009, sales of luxury goods amounted to US $9 billion 600 million, an annual growth of 12%, accounting for 27.5% of the global market. This figure is expected to grow to 14 billion 600 million US dollars in the next five years, and China will become the world's largest luxury market by 2009.

    A survey conducted by Boston Consulting Group Inc (BCG) in January showed that China will become the world's largest luxury market in five to seven years.


      

    Sumptuous

    William Lo, an analyst at Ample Finance, believes that many brands have been operating in mainland China for more than 10 years and have accumulated a lot of experience. Self marketing can reduce distribution costs and increase profit margins.

    Mirae Asset Financial Group retail analyst Selina Sia believes that the main market of luxury brands in China is coastal cities, but its population is only 5%, while inland and small cities will have huge market growth.

    Swiss brand Bally said last week that it plans to enter some of China's low-end cities and has opened stores in Hohhot, Inner Mongolia.


    Chinese brand is temporarily difficult to compete with famous brand


    However, analysts also pointed out that when catching up with the world's heavyweight luxury brands, China's emerging luxury enterprises are facing a long-term battle.

    Most of the world's most famous luxury goods enterprises have a long history and have a strong marketing tool.

    In addition, we must break the deep-rooted psychological barriers of consumers, that is, "made in China" means mass general popular products, and "made in Europe" is synonymous with aristocratic products.

    Marie Jiang, an analyst at JLM Pacific Epoch, believes that in the short term, no Chinese luxury brands can compete with international brands in terms of marketing, brand culture, design and quality.

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