Why Do Chinese People Do Not Accept Local Luxury Goods

A step back is the loss of the price advantage; further, the dilution of noble blood.

How much distance it should keep with Chinese manufacturing has become a proposition that Zegna has repeatedly weighed.

GiorgioDelpiano is puzzled by the fact that Chinese people refuse to accept luxuries made in China.

He is executive director of Zegna (ErmenegildoZegna) and CEO of global strategic alliance.

"The acceptance of Chinese made Zegna in the Chinese market is even lower than that in the European and American markets. It has both the design of Italy and the support of local manufacturing, and the price is more reasonable. I do not understand where the problem is."

He said.

In fact, he should know that the top men's wear brand in Italy, which he works for, sells not only design, texture and technology, but also taste and identity.

A popular story is that it costs 130 thousand yuan to customize a Zegna Global Limited Edition suit.

The craftsmen worsted 12 to 13 microns of wool, and the finished products looked even more delicate than silk.

Fabrics require climate and need to go to Switzerland for processing.

Italy's top technicians measure the genre, even buttons are made of the hardest horny hornet.

The whole production process lasted for 50 days.

In the past hundred years, the three generations of grandparents in Italy town have done their own work, which is the cultural part that Zegna often mentions.

Former US President Clinton, former French President Mitterrand and Prince Charles of the United Kingdom have shown people in Zegna in public. This is an anecdote to attract the media.

This is how Zegna is related to "nobility". In the joint venture with Zegna, Chen Xiaoxiang, a Wenzhou businessman from Xia Meng Yi Jie Garments Co., Ltd., said: "40% to 50% of customers in China buy Zegna suits as gifts."

In the concept of the new rich class in China, we should show our extraordinary taste and identity. The two symbols of "Italy origin" and "Zegna" are indispensable.

And "made in China" is obviously a loss in the expression of taste and identity. These four words are more likely to remind people of cheap shoes and hats and underwear.

Statistics from the global luxury Report 2007 show that 86% of Chinese customers are reluctant to continue buying because of the word "MadeInChina" marked by luxury brands.

This makes the luxury brands who want to look for factories in China have to be careful.

Freelance writer, clothing industry observer, said that many luxury brands are secretive about Chinese OEM, but in fact, many of their garments were born from some heavily guarded workshops in Dongguan and Wenzhou.

The workers in these workshops can not contact with the outside world, and the number of trademarks is counted every day.

PatrickThomas, the global president of French luxury brand Hermes, said in an interview with first financial weekly that it is absolutely impossible to put production in China.

But the temptation is so great.

"The cost of labor is only 20 times that of China," he said. "As a profitable company, the choice of production in China is more normal than that in Italy."

Said Rui Hong.

Zegna is more daring.

In fact, no matter in China or in China, Zegna is an early brand of "eating crab".

In 1980s, Zegna came to China in search of the world's best cashmere and silk. The biggest achievement of this trip was the discovery of the potential of the Chinese market.

In 1991, Zegna opened its first store in Wangfujing, Beijing.

In that era, the luxury brands of Chinese people were PierreCardin (Pierre Cardin) and Crocodile (alligator).

Zegna has almost become an extraterrestrial visitor. The Zegna suit of 8000 yuan foreign exchange certificate is almost equal to the total income of a Chinese ordinary worker in three years.

But the opening of this store obviously took the right time. For the Chinese market, Zegna has the sensitive touch to let the peers envy it, which makes Zegna one of the top selling men's clothing brands in China.

By the end of 2007, Zegna had nearly 60 stores in the mainland of China, and the overall sales revenue rose by 38%. China, including Hong Kong, Macao and Taiwan, gradually surpassed Japan to become the second largest market in Zegna.

With the gradual understanding of China's manufacturing capabilities, Zegna began trying to buy some leisure products on the southeast coast in 2002.

At this time, Chinese public opinion also began to focus on Chinese made goods in luxury.

Burberry, Coach and other brands open in China to become the focus of attention in the industry, then Armani, Chanel and other brands also rolled in.

The controversy aroused by them is still a strange connection between the two notions of "nobility" and "cheapness".

In this regard, Delpiano believes that, like T-shirts, China's design, manufacturing and service are second to none in the world.

"If Zegna does not buy in China, it will lose its market competitiveness."

For example, he said, Gucci did not choose to manufacture in China on such products, which directly led to shrinking sales of leisure products such as T-shirts.

In fact, Zegna, which started selling fabrics, has strong manufacturing capabilities. It has many partners in the fashion industry.

Some important designer brands, such as Armani, Versace, Gucci and so on, will hand over some of their products to Zegna OEM, which gives Zegna the foundries of Spain, Romania and Mexico all over the world.

In 2003, Delpiano came to China to try to identify a partner in China.

After visiting more than 1000 factories, he took a fancy to Chen Xiaoxiang and his Summer Clothing Co., Ltd., and then invested 50% in the original factory. He set up a joint venture company, Xia Meng Yi Jie.

"Until this year, the amount of our foundry still accounts for 60% of the total sales of Xia Meng Yi Jie over 300 million yuan."

Xia Meng Yi Jie, director of sales and marketing, said Chen Jianwei.

When Xia Meng Yi Jie came to celebrate the 5th anniversary celebration, Zegna was no longer responsible for the establishment of the ceremony. It was not only responsible for the planning and organization of the celebration ceremony, but also made the directors of the company stand on the stage, allowing the joint venture brand to "borrow light".

Delpiano said, "5 years ago, public opinion thought that we would let Xia Meng complete our formal dress, and time proved that they were wrong."

In his description, Zegna's survival suit will not move out of Italy because price factors have little impact on Zegna's regular customers.

On the contrary, products with Chinese made labels need to be reduced because everyone knows that purchasing in China is cheap.

"If you move the series with brand loyalty, the price drop will not be slower than the cost reduction, so it is foolish to do so."

I can't help but choose to make in China and not be too close. How to maintain this sense of distance, the way Zegna thinks is to distinguish product lines first, and the regular clothing series, including leather shoes and shirts, are placed in the place of origin carefully. 50% of the leisure products in sweaters and t-shirts are purchased from China.

The original category in Italy can be motionless, and the new product line can be considered in the Far East.

Secondly, the pricing strategy.

The commodities purchased from China will appropriately reduce the selling price on the premise of considering purchase price and freight.

Delpiano positioned the target customers of these products as "practical customers". They trusted Zegna brand, but did not think that high prices were the means to guarantee quality.

In terms of quality control, Zegna will assign two to three technicians to the factory to supervise the process and train workers before the samples are replaced by factories.

After the product comes out, there will be third party testing organizations to conduct special tests.

"Zegna's selection is strict and the elimination rate is very high."

Said Rui Hong.

Can the same version of garments be made in China comparable to that made in Italy?

The answer to Delpiano is that there are differences in product differentiation.

T-shirts and other products are not very different, and suits and other products that require high technology will be different.

The quality of the craftsman and the professional degree of the rival industry are still better than that of Italians.

Even in the same process, local production in Italy will also use some finer processing methods.

"If you look at the stores around the world, forty of the two thousand Zegna garments may be made in China," Delpiano knocked on his forehead. "The board of directors should repeatedly measure the location of the warning line. According to the economic situation, this line will change."

Since it is impossible to "lower the price" on the formal dress, it is better to launch another brand in the middle market.

5 years after playing the role of acting factory, Xia Meng Yi Jie began to launch his own brand "Xia Meng".

"As far as I know, this is the first time Zegna has promoted the private brand of foundries in the world."

Chen Jianwei said.

The keynote of promoting joint venture brands has been set 5 years ago.

At the beginning of the joint venture, Xia Meng Yi Jie introduced the ERP system and logistics distribution system recommended by Zegna.

With the actual operation of the OEM order, Xia Meng Yi Jie began to sharpen the processing technology.

The process of a suit has increased from 200 to 380.

The reasonable shift system has made the hand-made time more than doubled.

Project quality supervision also increased frequency and density.

The core team of Xia Meng Yi Jie is almost all Zegna's old minister. He served in Zegna for 15 years, and SilvioGalimberti, vice president of pnational operations, was hired as CEO.

The chief financial officer and factory manager are all from Zegna.

Chen Xiaoxiang became chairman of the company.

In 2005, Xia Meng Yi Jie also recruited Zegna stylist designer LeoRogna and Versace designer ChristopheFortis to ensure the originality and design concept of new products.

In the past 3 years, foreign designers gradually became dominant. Xia Meng Yi Jie also began to use more advanced fabrics in his own brands, and the price of his suit was adjusted from 5000 yuan to 4000 yuan in the Xia Meng period to 5000 yuan to 4000 yuan.

At this point, consumers also have softened the resistance made in China.

The Wall Street Journal said in a luxury report in 2008: "5 years ago, if shirts were not made in England or Italy, they would not be regarded as top grade.

This is not the case now. "

Wait until the launch of the joint venture brand coincides with the spread of the subprime mortgage crisis in 2008.

The first thing that people who begin to plan to cut down on is the luxury consumption.

According to the US media industry newsletter, more than half of the high-end consumers in the United States cut their luxury consumption in December.

In that month, the luxury brand in the US market dropped 22% in magazine advertising.

Zegna can't be alone.

According to Delpiano, the sales volume of the company has dropped sharply in the past 3 months. The backlog of stocks will be very sad in the first quarter of next year, and the new products will not dare to launch too much.

Sales in 2008 are expected to increase by only 7% compared to 2007. At the end of the two quarter of 2008, the company's target was set at two figures.

This makes Zegna pay more attention to the brand of Xia Meng.

Delpiano said the product line of the joint venture brand is exactly the same as Zegna, but the audience does not coincide.

The price of Xia Meng just makes up for the blank of Zegna in the field of formal dress, "just like the protective net under the tightrope walking program, someone down to a level, and can also be caught by Zegna's cooperation brand."

In the middle of 2008, when Chen Xiaoxiang and Zegna discussed the Xia Meng's brand strategy at the top level, they advocated that the joint venture brand should be promoted to the international market as soon as possible. The Italian side thought that it should be postponed. Xia Meng Yi Jie needed to verify his brand, quality and service in the Chinese market and then spread it to the international market.

Finally, the time to go abroad was initially set in 2010. Milan, Paris and London became the choice of store locations.

In order to match the brand image, Xia Meng began to follow the international first-line brand to promote advanced tailoring service in China.

Only 9 stores in the existing more than 80 stores will be changed. Xia Meng Yi Jie has decided to expand the summer store to 50 in 5 years.

When Zegna calculated the joint venture brand expansion plan, more luxury brands were still entangled in a hamlet problem: "go or not?"

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