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    Hermes Focuses On Technology And Equestrian Growth.

    2015/4/20 14:08:00 32

    HermesCraftsHorsemanshipLuxury Goods

    The European luxury goods company, which started with harness, is carrying out a seemingly impossible task in China: keeping the two digit growth. Its newly released 2014 financial report shows that the Asian market except Japan has increased by 13%. The LVMH, the world's largest luxury goods group, was driven by the Chinese market for the first time in 2014. Its profits from continuing operations declined for the first time in 5 years, or 5%, of which the Asia Pacific region is the only market with negative organic growth.

    The challenge of traditional luxury brands is severe: Hermes is also a brand that LVMH has always wanted to buy. In the bain consultancy survey, 80% wanted to try new brands such as Michael Kors. The survey also showed that the total consumption of luxury goods in mainland China in 2014 was about 115 billion yuan, down 1%, the first decline in 8 consecutive years.

    In the face of slower economic growth and a sustained anti-corruption policy, Hermes is one of the few luxury brands that continue to thrive in the Chinese market. Brand CEO and Hermes family successor Axel Dumas declared, "so far, there is no indication that our performance has been affected."

    Patrick Albaladejo, the vice president of strategic development and brand image, has resigned at the end of February. He served as the first senior non Hermes family for 9 years - but this does not seem to affect the performance of the family business.

    Not only in China, Hermes is also the fastest growing company in the global luxury industry. Over the past 5 years, Hermes shares have risen by 175%. In 2014, Hermes's revenue for the first time exceeded 4 billion euros, and the growth rate of 9.7% was far behind 3.9% of its biggest competitor, LVMH fashion clothing department.

    "Hermes also has to do business, but we hope to achieve this goal in a different way." Cao Weiming said. He was president of Hermes Greater China. He joined the French luxury goods company a year and a half ago, and the word "time" was repeatedly mentioned by him.

    Hermes spent a lot of time developing craftsmen, and a mature French leather artisan trained for at least 3 years to qualify for the production of Birkin bags. In order to get good crocodile skin and acquire 4 farms, he began breeding crocodiles himself. The fifth family of Hermes, which opened in Shanghai last September, has been in preparation for 7 years. 5 years ago, Hermes invested in the brand of Jiang Qionger, the designer of China, and never seemed to have made a profit forecast for it.

    Unlike many brands with a globally unified design and display concept, every Hermes store is designed to be completely different. Designers of the RDAI team responsible for the design of Hermes global store need to go to the local "feel" different seasons to design changes in one year.

    At the moment most of the luxury goods have been fabricated, Hermes still has a large manual workshop outside Paris. A handmade Birkin bag takes 3 months to complete. Although it is impossible for Hermes to do all the products entirely by hand, it still has a special department. This department will use a trumpet h to mark some special customized products.

    But as the top brand of luxury goods industry, Hermes has a long term premium capability because it is good at using these practices to maintain customers' desire for brand names.

    Hermes is priced more than most luxury brands. A 35 centimeter cowhide made of basic denim bag sells for more than 70 thousand yuan. It rarely appears in Hermes' website or store. It has been waiting for more than 5 years to register and wait for its Waiting List. If you want the custom of lizard skin or crocodile skin, the time may be longer. This scarcity creates the mystery of the brand.

    In Hermes stores, how to put and sell Birkin bags is a lever for stores to regulate their businesses. A former salesperson of the Hermes store in Shanghai told the first financial weekly that many stores were not out of stock, but when they did not sell them, "we usually do not display the treasures on the shelves. Only when the performance is not completed, will they put one or two out." Such sales are often done through private contacts with familiar customers. If they had not spent millions of dollars on these Hermes stores before, they would not enter the real list of purchasers.

    "There seems to be no second brands to imitate, because no product of any brand can make people so eager." Mario Ortelli, a senior European luxury analyst at Bernstein consulting, said on the first financial weekly. In his view, this particularity is particularly evident when the economic environment is bad, because consumers will only continue to have confidence in those high-end luxury goods. Hermes's "elite luxury" positioning can obviously help it be less affected by short-term economic fluctuations and market changes.

    Although Hermes has publicly stated that celebrities do not enjoy special treatment when buying, they always see celebrities around. It is said that Vitoria Beckham has a collection of more than 12 million yuan.

    Because of scarcity, birkin bag became a rare handbag that sold more expensive than handbags. If properly maintained, the value of a second-hand gold bag will rise by 5% to 10% annually. In 2011, a red denim bag made of crocodile skin, decorated with platinum and diamonds was auctioned at a price of about 1 million 300 thousand yuan, becoming the most expensive handbag in history.

    "Our business is to create desires." In May 2014, Axel Dumas said to celebrate the first woman fashion show in the United States. Of course, people's desire is changeable, but Hermes tries to slow down this trend with creativity. Sometimes this shows a different interest, humor and liveliness. The celebration was held at the Wall Street 23 corner building at Morgan chase headquarters. Hermes set up a photo booth for photographing celebrities on the merry go round. At the same time, there was a virtual synchronized swimming and a real fortune telling. A fortune teller at the scene would divination according to the different scarves chosen by guests.

    Last December, the top floor of the Shanghai Hermes house, which used to be a police station, turned into a temporary amusement park with different entertainment stalls. You can hold the pen with the slideway as if playing the "pen immortal", and draw an abstract picture as you like. The projection will turn your scribble into a rhythmic soundtrack animation. Later, a small French post office will stamp your work and send it to where you want it to be.

    "Modern life is stressful and fast-paced, and it will naturally require fun." Cao Weiming said, "we need to make things simple, but we are full of surprises in simplicity." Looking at the new luxuries who claim to be learning the Hermes culture, this new way of interaction is the focus of the Hermes market.

    You can see this from a App called Tie Break released by Hermes last year. In addition to teaching fast tie, it also has video games and a series of original GIF pictures. "It allows you to extricate yourself from tedious office matters, boring waiting time, boring public transport, and even a lengthy meeting or boring appointment." This also makes the image of its brand more lively and cordial.

    On the other hand, diversification has also scattered possible financial risks for Hermes. For wealthy Hermes customers, buying certain products is like a global treasure hunt. For example, only about 80 thousand yuan of Hermes leather basketball can be found at Beverly villa. It sells only ORANGE LEATHER bookcases that need nearly 700 thousand yuan in Costa Mesa stores.

    Every year, more than 1000 retail representatives from the Hermes world go to Paris to pick products two times. According to the rules, each flagship store must choose one product from 11 smaller categories: perfume, jewelry, watches and household products. So the product mix of each store is unique.

    stay Chinese Market The same is true. The principle of Hermes is to give every store full freedom of purchase. Cao Weiming said. Chinese retail representatives will have their own thoughts when selecting goods: they will not rush to grab dark clothing or scarves that are hot in European markets, because Chinese people prefer bright, rich colors. Super large Handbag Also give up, because the market prefers smart accessories.

    So far, Hermes There are 17 major divisions in the group, which are more abundant than many other industries. Some of them are even small enough to calculate separately in financial reports. But Cao Weiming said that any category that is now too small to be seen is likely to become a new growth force at some time in the future. At least for now, clothing and footwear sales increased by 12% last year, exceeding the traditional silk scarves and leather goods of Hermes.

    China's anti-corruption has brought irreversibly blows to some luxury brands, including Hermes. According to the financial report, the performance of the Hermes watches in 2014 dropped by 11%.

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