Consumption Is Changing With New International Luxury Brands In China.

In recent years, Chinese consumers have always been the biggest "gold masters" of international luxury brands. In 2018, Chinese luxury goods consumption amounted to 770 billion yuan at home and abroad, accounting for more than 1/3 of the total global luxury consumption. More reports predict that by 2025, 65% of global luxury consumption growth will come from China.

International luxury brands are seeking a new round of changes in how to serve the market with great potential. A few days ago, the "Beijing international brand development report" released at the 2019 Beijing international brand development strategy seminar showed that since 2018, many luxury brands began to transform and upgrade the store pattern and function service in the Chinese market. While opening up a large store, they became the main theme of luxury brand store operation. "One city, one shop" is a new strategy for many brands to open stores.

At the same time, with the contribution of non store sales to the sales revenue of luxury goods, even many jewelry watch brands have accounted for more than half of the total sales. The form of lively, people friendly flash shop, concept store, interactive experience, new retail and other marketing methods are becoming more and more popular with luxury brands.

　 Service value is more prominent

"Due to the impact of online retailing on physical stores, 94% of international luxury brands began to strategically shut down in the Chinese market since 2015, but this is not a signal for luxury brands to withdraw from the Chinese market. Instead, they are opening a new layout for the Chinese market. " Zhou Ting, a leading expert in China's luxury goods industry, co founder group CEO and Dean of customer research institute, said.

According to her observation, changing sales products to provide lifestyle services, changing brand centric and customer focused is the most significant strategic shift for all luxury brands since last year. Lifestyle aesthetics and life aesthetics advocated by luxury brands are the core promotion concept of all luxury stores. The original single small stores can no longer meet the needs of brands. Many luxury brands are seeking new outlets of more than 1500 square meters in the first tier cities, which mainly embody three functions, namely, the circulation center of the products, the exhibition center of brand culture and the customer care center.

The Beijing international brand development report also shows that 70% of the brand executives involved in the survey believe that the existing stores should be upgraded and the store strategy should be implemented in the high-level cities, including Beijing. Whether we should enhance the brand image, increase SKU, encourage consumers to interact with the brand in depth, and conduct lifestyle guidance, we should adjust the current situation of "1000 stores and one side" and parallel decentralization.

Luo Junwai, director of the commercial real estate department of DTZ, confirmed the trend in some cases. With the expansion of business in China World Trade Center Business District of Beijing, luxury brands such as Cartire are expanding their stores and upgrading. For example, Hermes opens the house of Hermes in Shanghai. Through the display of the museum, consumers can understand the brand history and handicraft, and the store of Paris and red shoes has been upgraded to flagship store in Taigu, Sanlitun, Beijing.

　　 Marketing mode is more renovated.

While upgrading and upgrading stores, luxury brands are better able to interact with Chinese consumers, and they are also putting down their sales experience. Whether it is Hermes, Prada, Chanel, or jewelry brand, Paris, Cartire and Bvlgari, apart from actively distributing online sales and social media marketing, they have also begun to try new marketing modes such as flash shop and cross-border cooperation.

"Last year's the Imperial Palace fair in Paris held nearly $400 million in sales for three days, and a flash store opened by Bvlgari this year sold 150 million yuan in 3 hours. Our 50 international brand sales directors in China agreed that sales of non stores have become an important contributor to brand sales, and brands will also focus more on non store activities. Zhou Ting said.

"Not only is the new brand favored, but the top brands are also promoting brands and launching new products by opening all kinds of flash shops. Such as Louis Weedon, Dior and other luxury brands in 2019 before and after the Seventh Festival in Beijing SKP first floor atrium launched Festival flash shop selling Tanabata limited products, attracted many consumers to visit. Talking about why the flash shop is popular with brands, Zhou Ting believes that while mining new sales growth, a large number of flash shops that use technology and aesthetic fashion elements can draw the distance between brands and consumers, create topics and flows to attract consumers to punch cards, so as to penetrate and interpret brand culture.

The spillover effect of the new offline sales mode has also been affirmed by the brand public relations director. According to the Beijing international brand development report, 90% of the brand relations directors interviewed believe that developing offline activities with rich forms is the best way to promote brand names. Some brands meet the theme of festivals, build shopping scenes and spaces, promote limited products, attract potential consumers to participate in brand interaction in a novel and lively way, break through the "high cold" image of regular brand stores, and expand consumer groups.

In addition, international luxury brands are also keen on cross-border and diversified businesses. For example, Louis Weedon's cooperation in attracting young consumer groups with SUPREME, Dior and designer KAWS, and Cartire and the Imperial Palace, as well as the creation of food and beverage outlets by luxury brands, all indicate that luxury brands are changing from buying goods to selling lifestyles and increasing their attractiveness in the Chinese market.