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    Luxury Goods Should Learn To Grab The Market Share Of The Middle Class In China.

    2015/6/12 15:11:00 41

    Luxury GoodsTaobaoChina'S Middle Class

    Where will the luxury brands go in China? Localized Chinese websites, payment through Renminbi and popular shopping platforms such as UnionPay and Alipay.

    Chinese consumers are now excellent buyers of luxury goods.

    Its purchasing power has brought most foreign brands into a passive response.

    Although nearly 1/4 luxury brands sell direct to China through the Internet, Chinese buyers are still flocking to Taobao, where 190 thousand Chanel products can be found.

    Luxury brands should ask themselves: how to effectively cope with the growth of the gray market and pform China's new luxury class into a loyal fan.

    The following is the Alibaba's initiative. Foreign brands can learn from it.

    1.

    localization

    All elements of brand attractiveness must conform to the unique local culture of China.

    Good brands know how to change the language, cooperate with local brands, adjust strategies with existing platforms to adapt to the market.

    2.

    Price competitiveness

    The major brands must start price competition with their products sold in other markets in the US, Europe and Asia.

    Chinese consumers will investigate and increase their price by 30% to 100% because of their geographical location. This will only enable them to find other ways to buy the products they want.

    3. Make real.

    Brand promotion

    Brand promotion will have a huge impact on Chinese consumers.

    At present, most brands are moving the hearts of Chinese consumers through commercial sponsorship, with poor results.

    Consumers are skeptical about the platform of the official media. They are more trusting of opinion leaders in micro-blog and WeChat.

    4, embrace mobile commerce.

    Alibaba and WeChat spoiled Chinese consumers, making them look forward to the simple and elegant mobile commerce experience.

    Big brands must compete and cooperate with these fashion makers.

    Related links:

    PamDanziger's research shows that light luxury brands such as RalphLauren, Coach and MichaelKors have always been highly sought after by 25 to 34 years old, but not wealthy but strong purchasing power groups.

    The consumer group accounts for 18% of American households.

    She defines a new name for such consumer groups: HENRYs (HighEarnersNotRichYet), which means that people who earn high but are not rich.

    Because of slow growth in income, this group is becoming more conservative in terms of spending.

    "This has led directly to the disappointing performance of RalphLauren, Coach and MichaelKor.

    Because of the economic downturn, the traditional middle class is increasingly cautious about buying these non essential items.

    The report pointed out that retailers such as Messi, J.C.Penney and Kohl 's were also affected and their performance was mediocre.

    The reasons for these companies are: inventory stagnation, delayed shipment, bad weather in February, and reduced international tourists.

    But there is another reason for not overlooking it: Americans are gradually reducing their spending on clothing and household goods.

    This consumption trend will impact the operation of these companies in the next few years.

    Theoretically, falling oil prices give consumers more disposable income.

    However, the latest report of the US Department of Commerce indicates that the US retail industry is depressed because consumers are more willing to spend in other fields than traditional retail.

    Morgan Stanley's latest report shows that compared with ten years ago, the millennials now spend more on leasing goods, smart phones and personalized services, and spend less on clothing and accessories.

    Messi, chief financial officer of department store KarenHoguet, blamed Netflix on the decline in sales.

    KarenHoguet pointed out at the recent meeting that electronic products and online subscription services gradually seized the market share from the clothing industry. "I think this is mainly because consumers' shopping tendency is beginning to tend to electronic products, cable TV services, Netflix and so on.

    Although some products such as cosmetics are still selling well among young people, consumers' preferences have shifted from clothing and household goods as a whole.

    Hoguet said helplessly: "consumers spend their disposable income on cars, health care, electronics and home decoration, which we do not sell."

    Even if consumers buy clothes, they may not be willing to buy them at full price.

    Retail expert RobinLewis summed up the reason on his personal website: consumers were in love with promotions.

    RobinLewis wrote: "with the promotion of coupons, discounts, membership scores, gifts and other promotional activities, the exception has evolved into a rule that consumers can spend less money on the same thing."


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