Multi Level Breakpoints Break Out Of Niche Luxury Brands Tangle Chinese Market

As a famous contemporary French painter and chairman of the French artists association, Remy Ayyoung (Ramy Aron) has a business "big plan" besides the regular painting exhibition this year. This big plan is related to his other important status, namely France. Luxury goods Chairman of the board of directors of MATZO PARIS, Paris.

In late September, just finished the exhibition of personal paintings held at the Royal Museum of art in Beijing. Remy went to Nanjing to attend the project fair organized by Nanjing municipal government. He finally decided to enter the Asia Pacific Business Building in Nanjing, and authorized the establishment of Jiangsu creative Cci Capital Ltd to fully develop the business of Paris Mercure in China. The product line covers seven categories of high-end luxury goods such as jewellery, bags, perfume, cosmetics, watches and watches.

During the period from 2005 to 2011, when China's luxury consumption rapidly expanded and the major luxury groups began to rush to the beach, consumers in the Chinese market did not see the beauty of Paris. Remy also admitted in an interview with our reporter: "it is very passive to enter the Chinese market at this time. In the past, we have been hesitant and preparing for it. "

The "entangled" plan for many years to enter China has finally opened. What is the worry of Remy? How can the new luxury brands break through under the market structure of luxury brands in the first tier cities?

The "entanglement" of small luxury brands

Over the past few years, China's luxury market has enjoyed its most rapid expansion, accelerating at an annual rate of over 12%. As far as French brands are concerned, Cartire (Cartier), Louis Weedon (LV) and Hermes have entered the Chinese market in large numbers and have won a good market position.

Remy knew all this. In fact, as early as 2005, Remy had a plan to enter the Chinese market. Every year, Remy, who travels to China for cultural exchange, visits Beijing, Shanghai, Guangzhou and other major cities to learn about the development of China's luxury market and the performance of international luxury brands.

But the plan has not yet been opened. Reminiscent of reminiscent, Remy said, "at the beginning, I was really at a loss, because the position of the former Paris's brand was only for the Royal and upper class businesses in Europe. When we suddenly faced the huge new rich people in China, we didn't know what to do at the beginning."

But soon, Remy made it clear that if the Paris Meritas wanted to be like Louis Vuitton, Cartier Like brands, entering the Chinese luxury market, we must change our business philosophy and update the market service mode. Remy is afraid that if we fail to enter the Chinese market, we will have a negative impact on the original traditional family brand with hundreds of years of history.

Remy's concerns represent a lot of entanglements that have not yet entered the Chinese market and have a long history of niche luxury brands. Facing the sudden rise of China and the huge new rich crowd, how the minority luxury brands transform their past exclusive and customized business philosophy, how to serve the huge wealth of the emerging market, and ensure that the brand image is not affected is the reason why they are cautious and hesitant. To accomplish these internal changes, it will take a lot of time.

The breakthrough of "late life"

Over the past few years, Remy has made great preparations for these changes and found partners in China, which have strengthened his confidence in entering the Chinese market.

The next big plan is to enter the Chinese market in a big way: set up flagship stores and boutiques in Hongkong and Macao to meet the purchase needs of mainland visitors.

At the same time, we set up a representative office in Beijing and a city agency in the 45 most developed cities in China to jointly develop the regional market; set up two flagship stores and operation centers in Shanghai and Beijing to provide management skills and training support for investors, distributors and retailers throughout the country; with the help of partners from 45 cities, the brand counters were opened to nearly 70 two or three line cities.

Unlike the past strategy of luxury brands entering China, Remy took a multi-level approach. While the first tier cities are the marketing center, the Nanjing Asia Pacific business building will be responsible for the brand research and development center, which is responsible for brand management, promotion, and national financial settlement and customer service.

"As a focal point for Nanjing and Shanghai, Beijing is geographically the most advantageous. Nanjing, as a brand R & D center and consumer service center, is also most beneficial to the cost control of the company." Remy explains.

The ranking of the top 100 international luxury brands in the first tier cities is nearly saturated. The saturation of Beijing has reached 98%, and Shanghai's saturation is 87%. It is obvious that both Shanghai and Beijing are the most competitive places for luxury brands. With the high level of commercial leasing, luxury brands can hardly win the profit target.

Therefore, in Remy's view, the entry rate is only between 30%~50%, and has not reached 70% of the two or three line cities at most, such as Nanjing, Chongqing, Chengdu, Shenyang, Zhengzhou, Xi'an and other cities. Nowadays, luxury brands, especially new luxury brands, have great potential.

But Remy stressed that there is a reason for the importance attached to the second tier cities, but just like many countries will have the phenomenon of "brand dikes and dams". The brand's propagation will flow from Paris to Beijing and Shanghai, and then flow to the two or three tier cities like water flow. Therefore, the first big international brand will first appear in Beijing and Shanghai, otherwise it may be considered a fake by Chinese consumers.

In addition, the disparity in luxury prices between China and abroad and the grey sales behavior derived from it also inspired Remy. He hoped that after entering the Chinese market, the Paris Mercure could reduce the price difference between China and Europe through reducing logistics costs and reducing sales links.

Remei does not agree with the slowdown in luxury consumption in China. In his view, the Chinese luxury market will be bright in the next 20 years, because China will add millions of luxury goods consumers every year, while the original luxury consumers will pursue newer brands and more high-end products, especially the high-end products such as perfume, cosmetics, bags and accessories, watches, high-end jewellery and high-end dresses, wedding gowns and underwear. market Potential and opportunity.