Burberry Leads Luxury Brands To Expand The Chinese Market

The 155 year old Burberry (Burberry) flagship store in Beijing is opening up. Burberry CEO Elenz said Burberry plans to increase the number of Chinese branches to 100 in the short term in response to strong market demand. At the same time, Hermes was withdrawn from the store in Tianjin due to poor management. One is in the Chinese market, while another is in the Chinese market. For overseas luxury brands, although the Chinese market is "fat meat", it is easy to become a "bone" after being dilated.

　　 Burberry China's market force

Catlett, Burberry's chief financial officer, said Burberry's sales in China have grown by 30%, and have continued to rise. Overview global market More and more consumers are buying brand-name goods, such as emerging markets such as China. purchasing power Especially amazing. In the coming year, Burberry will expand its stores in China, Latin America and the Middle East, and the retail area will increase by 12%-13%.

It is reported that Burberry's sales in China grow by two digits per year. In June 2010, the Burberry brand bought back the retail rights of the Chinese market at 7000 pounds, marking the beginning of Burberry's vigorous expansion of the Chinese market. Most of Burberry's distribution outlets are in Beijing and Shanghai, and 50 stores have sales of 75 million in 2009. In addition to the 50 outlets in the mainland market, Burberry has also recovered 13 stores in Hongkong, a store in Macao and 19 stores in Taiwan.

Luxury brands expand China's market

In 2010, many brands announced that they would open new stores and renovate stores in 2011, and investment will continue to focus on developing sales networks. "The shrinking of foreign markets and the growth of the Chinese market undoubtedly bring space for luxury giants to expand in China." One industry insider expressed this. In fact, as early as the global financial crisis has just arrived, Versace, Hermes, Louis Weedon and other world famous luxury brands have shown signs of expanding the Chinese market.

In Beijing and Shanghai, in just a few months, Tod, s, LouisVuitton, BottegaVeneta, Cartier, SalvatoreFerragamo, Zegna and many other flagship stores have opened one after another. These international luxury brands are competing to expand their territory in the Chinese market.

China's economic growth has provided a huge market space for the luxury industry. The volume of the market has not been fully revealed, which has long been coveted by luxury companies.

According to the market survey conducted by KPMG at the end of 2010 in China, 44% of respondents expected to maintain or increase the consumption level of luxury goods. More importantly, although 38% of the respondents are cautiously optimistic about the future, they still do not show up to reward themselves with luxury goods or improve their status. China will become the world's largest luxury market in 2015. {page_break}

Strong growth in China's luxury market

By 2015, China's middle class population will increase by 6 times, and their thirst for famous brand goods can not be ignored. The Chinese market is undoubtedly a "fat meat".

According to this year's Hurun fortune report, there are now 140 rich and 1900 yuan rich 1 billion yuan tycoons in mainland China. More than 55 thousand people are worth more than 100 million yuan. The rich have an average of 3 cars and 4 watches, with an average annual consumption of 1 million 700 thousand yuan. Undoubtedly, the strong growth of China's luxury market has led luxury brands to accelerate the layout of the market.

"The cultural and consumption patterns of different cities in China are different." Mason, executive director of the fashion brand "Shanghai", based in Hongkong, said: "the first tier cities are now in the stage of trying luxury." second tier cities "are still in the stage of consumption comparisons. Even in the first tier cities, there are still obvious differences. That is to say, successful experience in this city may not be easy to copy to other cities.

Don't let fat meat become a hard nut to crack.

For overseas luxury brands, although the Chinese market is "fat meat", it is easy to become a "bone" after being dilated. In March 14, 2007, the first store in Hermes was located in Tianjin. However, not long ago, Hermes sold the first and only store in Tianjin. Over the past few years, Hermes has opened 24 stores in 17 cities in China. Is it possible for Hermes to leave Tianjin or make a slight adjustment?

On the withdrawal of Hermes, consumers feel regrettable online: "too bad." Hermes started late in the Chinese market, and its recognition was not as good as that of LV and Chanel. Despite its creation of a brand new brand Shangxia for the Chinese market in January 2011, it aims to expand the Chinese market. However, the Chinese market expansion plan of Hermes still appears to be slower than other similar brands.

The withdrawal of Hermes from the Tianjin market may only be a strategic adjustment of the brand, rather than abandoning the market. It may be to retreat or move to another battleground. Beijing red children online mall official said. Some experts said: "withdrawal is understandable. The cost of a luxury brand entering a shopping mall is very high, so we need to consider input and return. Once the market is unable to meet its needs and can not bring profits to it, it will make corresponding strategic adjustment of its business way. In addition, in the process of operation, whether it can reach agreement with the market in the interest distribution is also a key factor. If you can't improve the business situation, you will choose to withdraw. "

Stacy Cartwrigh, chief financial officer of Burberry group, said: "the Chinese market has great potential." As for the risk of big expansion, she also said that Burberry itself is also improving, for example, adding more stocks to new franchised stores. Cartwright hoped Burberry could reduce inflation by negotiating with suppliers. At present, Burberry's electronic store mode has been tried in Beijing, and investment in the new global network sales platform will soon be made public.