Luxury China! New Money Dance! Are You Really Ready?

In the last month of 2010, we seem to have more need to look back on China's luxury consumer market than ever before: the confidence level of Chinese consumers has reached a record level. A joint study conducted by NBS and Nelson showed that in the first quarter of 2010, China's consumer confidence index reached its highest level since 2007.

And the whole world is concerned that China is now the fastest growing luxury market in the world. The most popular products are cars, clothes, cosmetics, wallets and watches. Now China is already the second largest diamond market in the world and the largest auto market.

What is worth mentioning is that China's Luxury goods The growth rate of the consumer market is amazing. If compared with some data, in 2009, Chinese consumers bought 27.5% of the world's luxury goods for $9 billion 400 million, while in 2004, the figure was only 2 billion dollars. According to the survey conducted by Goldman Sachs in December this year, China is the world's third largest consumer of luxury goods, accounting for 12% of the world's total sales. The development of the luxury market in China in the past 10 years seems to provide solid data support for China to become the world's second largest market in 2013. As China becomes the second largest economy in the world, there is no suspense.

But China is a new one. Luxury goods The uniqueness of the market is not described by those growth statistics. In the past ten years, the luxury industry has been developing vigorously in China for ten years. It is the ten year of the spanformation of the national attitude towards life, and the 10 year of its change of outlook on life and values. The craze for luxury consumption is not only an achievement of economic development, but also a national pursuit of quality, a return to the brand, and a spiritual and cultural attachment to fine life.

The development of luxury goods market in China in the past ten years, especially in the two or three line cities, is most impressive. "From counterfeiting and shoddy jumping to world famous brands, almost all of them are directly into the information age in the bronze age." Wei Guangwen, chairman of tin Lai Zhong Xing, who has worked in the luxury industry for more than 20 years in China, believes that "in the perspective of Maslow's hierarchy of needs, these ten years have spanned the development process of several generations."

Liu Zhao, China's honorary representative of the French Fine Arts Association, expressed the same concern for this great process, the unexpected rapid expansion of the luxury industry in China, the conspicuous purchase of young luxury consumers, and the leaping development in the two or three tier cities. All kinds of things that are happening and happening are being entangled together, so that people can ask themselves a question: is it really ready for the rational consumption of luxury goods and the new money dancing China?

Growing up in China Consumer

In November 5, 2010, Y-3 opened fifth new specialized stores in Beijing, and in November 6th, the Italy casual wear brand Paul & Shark held its grand opening ceremony in Ningbo and Yi Dao shopping center; in November 11th, the shoe shoe ECCO opened its 500th stores in China at the Shanghai national gold center in November 11th; in November 17th, Italy's classic menswear brand CERRUTI 1881 opened in Shanghai port Hui square in the Greater China region. Since 1987, for the first time in the Great China market, it has spread to 39 locations in China, including the first to four line cities. In just one month, nearly 100 famous international brands opened new stores in China.

In addition to the prosperity of the domestic luxury market, Chinese consumption in overseas markets is still eye-catching. Outside the luxury stores in Paris, Chinese people have asked other tourists to buy two bags with their passports. Louis Vuitton, in order to ensure that the shops are not broken at Christmas, has closed shop for an hour every day since the beginning of the day. Burberry has begun to consider offering shopping guides to Chinese tourists in the ten luxury market stores all over the world.

The famous Chinese strategy consulting firms Bain recently released the 2010 China luxury market research shows that roughly the same as last year, 56% of the consumption was carried out outside China, although the proportion of consumption in the mainland continued to increase, but the proportion was still only 44%. Ben Cavender, a senior analyst, points out that some of the second tier cities in China, such as Chengdu and Shenyang, are more interested in shopping locally. "Most of the shops in the second tier cities are crowded, and consumers in those areas are looking forward to the metropolis like Beijing and Shanghai," he added. "And they do not have the convenience of living in Beijing and Shanghai, so they know better how to enjoy the convenience of shopping in China."

In the end, what kind of consumers are pushing China's current super fast expansion of the luxury consumer market? This is undoubtedly a priceless issue for brand businesses. If the European and American luxury audiences are a group of Old Money (old money), then China's luxury audience is definitely a New Money group, and the expansion of luxury consumption in China is still temporarily unseen.

Charles de Brabant, an associate professor of luxury brand research at China Europe International Business School, pointed out that "many international brands do not know enough about Chinese consumers' motivation to shop." He added, "brands often make fun of them." these guests are different from us. They are upstarts, who spend billions of dollars overnight. In fact, there are no simple stories behind those Rolex, black sunglasses and high performance Porsche.

"Chinese consumers have very strong purchasing power. International retailers have achieved good sales results here. Regina Yang, director of research and consulting at Knight Frank China, said she also said that among many products, Chinese consumers are most keen on buying footwear and bags, followed by watches and jewelry.

Achievement and roughness under the easterly wind

"In the current situation, China's retail market as an investment tool has greater potential than other markets in the world." Andrew Weir, the managing partner of China's KPMG, said in a recent report by the company. "Despite the global economic crisis, retail sales in China are still growing at a rate of two digits. At the same time, the retail industry in many other markets has experienced an awkward situation of stagnation."

Take the newly built Shanghai gold center mall as an example, more than 1 million 100 thousand square feet of commercial space has been leased to luxury brand retailers, including Bally, Salvatore Ferragamo, Louis Vuitton, Chanel, Herm s, Gucci and Prada. Among the many dealers, about 15% of the luxury brands are making their debut in China. Prada Group's chief operating officer, Sebastian Suhl, said that the Prada and Miu Miu stores in Shanghai's gold center have already achieved good sales results. "This shopping mall is very luxurious, very suitable for luxury brands to enter." Suhl thinks so, he also said that Prada opened a store in Guangzhou's Tai Koo Hui shopping center this year.

However, compared with the mature markets in Europe and America, people in the industry are deeply impressed by the ubiquitous expression of the rapid development of luxury goods in China. Wei Guangwen, President of Teana Chung hang, analyzed that China has trained generations of New Money upstarts to trample on the noble spirit of Old Money at the same time. The value of luxury goods is seriously deviated from the price, because only the most expensive, the best consumer behavior is naturally like a farce "we pay for advertising, not for value, for showing off, not for life." We know that clothing, pens, bags, cosmetics, shoes and watches can display the brand of personal consumer goods, but do not know furniture, tableware, lamps, pianos and clocks. To a certain extent, the connotation of history, culture, technology and life value promoted by luxury goods has been drowned in the new money market.

Made in China and Design for China

Last month, 3.1 Phillip Lim held its first fashion show in China, which was founded in 2005 by Chinese designer Phillip Lim Lin Ping and his partner Wen Zhou (Zhou Xuanwen). At present, there are 400 outlets in 53 countries, and 80% of the products in some quarter are made in China. Zhou Xuanwen believes that the concept of consumers is very open now, they are more concerned about products rather than the origin of products, he said so far this year's sales have reached 60 million U.S. dollars, including the benefits of domestic manufacturers to reduce costs. At the same time, he said Hongkong's sales were very amazing. At present, its brand business in Asia has increased two times, and plans to open an Asian flagship store in Hongkong in 2011. {page_break}

The word "made in China" has different hints in different environments. Italy's luxury brand Prada was willing to borrow 360 million euros from the bank for three years, and refused to accept Chinese companies' capital injection. Chinese capital has become increasingly enthusiastic about buying shares or even acquiring Western luxury brands. Meanwhile, some traditional Chinese excellent brands have also been improved and revived in Europe and America. For example, canvas shoes, many young companies draw inspiration from traditional Chinese brands, and canvas shoes made in China also find their niche in the most avant-garde shops. At the autumn sports fair in New York this year, at least four brands with Chinese origin come to show their casual canvas shoes, including Huili, Shu long, liberation and brand. In addition, the leap has also created brilliant retail sales.

From the 2008 special edition of the luxury brands of the Beijing Olympic Games to the 2010 edition of the limited edition of Shanghai Expo limited this year, from "Made in China" (made in China) to "Design for China" (designed for China) is a marked change in China's strategy in the past ten years.

The most popular face for Chinese consumers should be Chanel Chanel. In December last year, the fashion Karl Lagerfeld launched the "Paris Shanghai" advanced handicraft workshop in Shanghai. When Hongkong and Tokyo did not receive such courtesy, the importance of Chanel to the Chinese market was obvious. However, in addition to the straightforward expression of the Chinese "Chanel" directly on the clothes, most of the Chinese people can not understand the application of the Chinese elements. However, the limited edition 2.55 of the Chanel flagship store in the Bund, Shanghai, was sold out quickly. No wonder fashion commentator Ian said: "this fully exposes the great conspiracy of this series - even if it is released from Chinese elements, it can still be sold."

In September 16th, Herm s launched the fashion brand Shang Xia ("up and down") for the Chinese market, and unveiled it in Shanghai. Many people hold reservations about whether the brand of "100% China design and 100% made in China" can be brilliant. Herm s global CEO Patrick Thomas believes that the launch of the project will not have any adverse effects on the performance of the group in this financial year. "We will continue to open stores and open enough stores according to the plan".

In the spring and summer of 2010, the most amazing commercials came from Dior: John Galliano, the brand design director, arrived in Shanghai and filmed a new Lady Dior advertising blockbuster with great director David Lynch and Oscar Marion Cotillard. The expression is nothing more than the emphasis on the Chinese market, and is expected to attract greater recognition from Chinese consumers. Of course, there is also a return on faster sales growth on this hot spot.