Chinese Enterprises: Eager To Buy European Luxury Brands, But Not Yet.

Since 2008, the company's executive partner, Gao Zhen, has received almost every week a consultation of Chinese enterprises wanting to buy European luxury brands.

Recently, YGM has attracted many Chinese bosses' envy and "jealousy". The Hongkong listed trading company successfully acquired a 100 year luxury brand in the UK. Aquascutum (Aquascutum) to know that many Chinese bosses have long been eyeing the top brands abroad, and some have even worked secretly for many years, but they failed to succeed in the acquisition.

Wang Qiang (a pseudonym) is one of them. As chairman of a jewelry enterprise in Shandong, Wang Qiang has been engaged in the acquisition of foreign luxury brands in the past two years. He has negotiated three European brands, but for various reasons, he failed.

He first found a jewelry brand in Italy, but the conditions put forward by the other side were not acceptable to Wang Qiang because it not only demanded a high price but also needed a full reception of the staff in Italy; the second was the French jewellery brand, and the reason why the other side refused was that after Wang Qiang took over, it would vulgarization the brand that was handed down by his family. After the French brand visited Wang Qiang's company several times, the deal would be completely washed out.

Later, Wang Qiang decided not to be confined to the jewelry brand. At the end of last year, he began to talk about a French champagne brand. This time, both sides agreed on the purchase price and operation development, which made Wang Qiang very happy. Until the two sides signed the contract, the foreign brands worried about whether Wang Qiang could operate well in China.

Other Chinese bosses may not have the same tortuous and frustrating "acquisition history" just like Wang Qiang, but the outcome is almost the same. However, the impulse of domestic bosses' collective buying of foreign top brands has not been extinguished. They continue to actively seek and wait for opportunities.

The popularity of China's luxury market has made many Chinese bosses ready for foreign top brands. Chen Zhilong, chief executive officer of A&H luxury group and MATZO operation director of China, personally felt the collective impulse of Chinese bosses. Apart from the above Wang Qiang, many friends have found Chen Zhilong, hoping that their connections in the luxury industry can help them bridge the bridge.

"In Luxury sector The mentality of domestic consumers is still not a big brand. Apart from cultural reasons, China's long term and inexpensive products association stamp also hinder the affirmation and subscription of domestic high-end brands by domestic consumers. Chen Zhilong told reporters when he analyzed the motives of the collective acquisition of domestic bosses.

In addition, Chen Zhilong also saw that the motive of buying was related to the operation of enterprises. For example, in recent two years, jewellery sales have been faced with great challenges. In order to find new opportunities for development, there are more and more jewelry companies looking for European brands. Although there are many investors who want to really create luxury brands in China than in previous years, Chen Zhilong's view is that this collective impulse is not for this ideal.

"This is an inevitable choice under the changing market environment. On the one hand, the European economic downturn, many brands have the intention to sell, and the price is relatively reasonable; on the other hand, the Chinese market consumer worship of European brands, and this is a cultural phenomenon, cultural things can not be changed overnight. In such a market environment, the acquisition of European luxury brands is undoubtedly going along with the trend, improving sales and earning enough profits. Chen Zhilong thinks.

Since 2008, the company's executive partner, Gao Zhen, has received almost every week a consultation of Chinese enterprises wanting to buy European luxury brands. As an investment fund executive, Gao Zhen will look for brands that she thinks are very suitable abroad as partners and then put them together with potential entrepreneurs in China. But this seemingly easy thing has not been made yet.

Why is it so hard for Chinese entrepreneurs to buy foreign luxury brands?

Chen Zhilong believes that if Chinese enterprises want to buy European luxury brands, they should make preparations for three aspects. First of all, there must be a clear and practical development plan. Many luxury brands in Europe are family oriented. They have deep feelings for the ancestral inheritance, so they value not only the price but also the brand reputation. This is in Hermes. Louis Vuitton (Louis Vuitton) business disputes can be clearly seen.

Secondly, at the management level, Chinese companies must be guided by real experts who understand acquisitions. At present, overseas acquisition is a hot item. Chen Zhilong sees many consulting and advertising companies changing his mind to start overseas acquisitions, but their ability to deal with complex problems is very weak.

"The last thing to mention is that Chinese companies must control financial risks. Buying a luxury brand is just the beginning of a huge investment, not the end of investment. It's still early." Chen Zhilong emphasized.

In the view of Gao Zhen, the domestic owner's purchase of European luxury brands has not yet arrived. In the face of the consultation of domestic business owners, Gao Zhen usually asks them three questions: first, do you feel that everything you like about a foreigner will tolerate him? Second, can you treat him equally? It is difficult to see him neither too high nor too low; and third, are you willing to share his interests with him?

In addition, Gao Zhen will also examine how Chinese bosses are good at the team and whether they have a good incentive to the team, which is related to whether the business leaders can lead the team and motivate the team to make good products after the acquisition.

But unfortunately, in the past few years, Gao Zhen has not been able to find anyone who has the courage and ability to do this in China's elite enterprise groups. Not to mention that after the acquisition, we need to cross all cultural barriers and cultivate the culture after the brand.

"But will it happen in the future? I believe there will be." Looking forward to the future, Gao Zhen said.