The Journey Of Luxury Goods In China For Decades

2020 is defined as the "worst year" by many media. The outbreak of the new epidemic at the beginning of the year has brought far-reaching changes to almost all industries in the world.

At the end of the year, China has become a major economy with positive economic growth in the world, and the Chinese market has become a bright spot in the development of global luxury industry.

Before looking at the top ten key words of luxury goods in China, I would like to pay tribute to a master, Pierre Cardin, who died on December 29, 2020 at the age of 98. He is one of the most famous fashion design masters in the 20th century. He is a controversial fashion business empire that popularizes "high-quality ready-made clothes". He is also a pioneer in China's fashion industry.

On March 19, 1979, Pierre Cardin held an internal fashion show in Beijing National Culture Palace. It was this performance that opened the "fashion door" of new China.

In the following 40 years, China's economic development has made remarkable achievements; since 2013, Chinese consumers have become the global luxury consumers (including domestic and foreign consumption).

New epidemic situation

On January 23, 2020, Wuhan was closed due to the outbreak of Xinguan epidemic.

LVMH, a luxury goods group in the world, announced on its official website that it would donate 16 million yuan to the Red Cross Foundation of China to help alleviate the shortage of urgently needed medical supplies in Wuhan; Kaiyun Group donated $7.5 million to Wuhan; Lifeng Group donated 10 million yuan to Wuhan; L'Oreal China donated $5 million to China Red Cross foundation, herm è s, Versace and Hugo Boss and other brands have joined the donation camp.

At first, when the epidemic only spread in China, major industry associations and brands paid attention and support to China, an important global market. Milan fashion week, British Fashion Association and Italian Fashion Association supported China on social media - "China, we are with you".

However, with the spread of the epidemic, Europe has fallen into a period of high incidence of the epidemic, which has brought great changes to the luxury industry. Herm è s, Rolex, Patek Philippe, etc. closed their factories and stores; LV, Dior, Chanel, Bulgari, ferra * *, Balenciaga, Saint Laurent and other brands have turned part of the original production line of clothing, leather goods, perfume and cosmetics into the production of masks, disinfectants and other anti epidemic products.

According to a report released by investment management company Bernstein at the end of February 2020, the new crown epidemic could cost the global luxury industry up to $43 billion in sales.

China's confidence

For luxury brands, the new crown epidemic is a "disaster" because the epidemic is affecting the consumption habits of Chinese consumers, the most important customer group.

According to Bernstein's report data, in 2019, Chinese consumers accounted for about 35% of the global luxury market expenditure and about 90% of the global luxury sales growth. But travel bans imposed by China and other countries in the wake of the epidemic mean that some of these shoppers are temporarily unable to buy luxury goods elsewhere. "This is particularly important because many Chinese consumers buy luxury goods abroad."

But it turns out that with the proper control of the epidemic by the government departments, China's strong rebound in consumption power has given the luxury industry shocking confidence.

In May, the price of Cannes bucket bag of LV in China rose from 17900 yuan to 19400 yuan, an increase of about 8%; Chanel officially announced that due to the impact of the epidemic, the price of handbags and small leather goods will be increased in the world, with the overall price increase of about 5-17%

On the contrary, the price rise has stimulated the enthusiasm of Chinese consumers. There are long lines of customers waiting for money outside the main stores of top brands such as LV, chanel and herm è s.

According to the website, the first day performance of Guangzhou Taiguhui store reopened by herm è s was as high as 19 million on the first day, which broke the daily sales record of a single store in China. The sales volume of LV in the first three weeks of May increased by 50% compared with the same period of last year, and the performance of a Swiss famous watch soared by more than 200% compared with the same period last year

According to Bain autumn luxury report 2020, the global luxury market will decline by 23% in 2020, and the size of personal luxury market will drop from 281 billion euro in 2019 to 217 billion euro. But mainland China is a year-on-year growth region, with its luxury goods market soaring 45% to 44 billion euros.

"Those who win China will enjoy luxury goods." McKinsey's "China luxury report 2019" has once again been confirmed in 2020.

Online marketing

With its huge demographic dividend and consumer market, China has become one of the most thoroughly transformed countries by the Internet. Under the epidemic situation, major luxury brands have accelerated the pace of online marketing in China in order to more directly face Chinese consumers.

In January 2020, Cartier, the top luxury brand, announced that it would set up an official flagship store in tmall, and put two new products on tmall worldwide, which caused an uproar in the industry. "The launch of tmall's official flagship store is a milestone in Cartier's long-term development in China, and this strategic move will provide Cartier with important opportunities to integrate into China's fast-growing new retail environment," said Sili Lok, its global chief executive

In March, prada opened a flagship store in tmall, which includes men's and women's ready-made clothes, bags and shoes; in May, Bulgari opened a store in tmall to sell perfume and cosmetics; in June, Dior's official flagship store opened to sell cosmetics and fragrances; in August, the official flagship store of Chanel perfume and beauty products was officially launched, and the brand side said that tmall was the third-party cable officially recognized by its * Business channels.

In December, gucci tmall's official flagship store officially opened, covering a full range of goods, such as handbags, leather goods, shoes and shoes, ready-made clothes, accessories, wristwatch jewelry, etc "Gucci takes" digital priority "as the starting point of brand strategic development and makes strategic investment, especially in the digital ecosystem developed in China in the past few years," bizarri said. Gucci has now reached an agreement with tmall and tmall luxury products, marking a further step in its strategic cooperation, aiming to provide Chinese consumers with an official and personalized online shopping experience. "

In addition to entering tmall, luxury brands have also tried more "people-friendly" online marketing.

On March 26, the commercial live show of the new season of Escale summer series was held in xiaohongshu, which took 1 hour and 10 minutes. The total number of viewers was 15000. Although the live broadcast was criticized by netizens that "the soil is drenched", "low to explode", and that big brands have sold their ground stalls, it also shows Lv's determination to "change for China".

In this year, almost all luxury brands familiar to consumers appeared in wechat circle of friends (advertising). My friends left a message saying, "how did you send it to me? Is there a mistake in wechat? " At the same time, he couldn't help but praise and comment.

LV, Dior, Cartier, Bulgari, Gucci and other brands have also joined the wechat video Number camp; Dior has also become a luxury brand in bilibilibili and tremolo platforms.

From April 25 to 29, sihh changed its name to watches & wonders, cancelled offline activities and chose to open online to the public. Based on the official flagship store of net-a-porter, it cooperated with tmall luxury products to present the "watches & wonders" tmall cloud watch exhibition, including several famous watches of Cartier, Vacheron Constantin, Jaeger LeCoultre and Piaget, as well as millions of watches sold or exhibited online.

In May, CHAUMET Shangmei Paris, which has a history of 240 years, launched a full series of online shopping platforms for global * * in China, including wechat applet and H5. It gathered a full series of jewelry and watch works of the brand, presenting the artistic conception and aesthetic concept of the brand, and penetrating various intentions of establishing deep emotional connection between the brand and Chinese consumers.

On July 31, burberry launched Burberry space, the first social retail boutique in luxury industry, which is located in Mixc, Shenzhen Bay. It integrates offline and online platforms to bring digital immersive retail experience

When domestic entrepreneurs say that they can't understand the post-95's, luxury brands with a history of 100 years and have served dozens of generations of young people have used the favorite way of generation Z to communicate with them and continue to open the next era of brands.

Generation Z

In 2020, China's new generation of high-quality star idols have increasingly become the spokesmen or close friends of luxury brands, especially male star idols.

Starting from the top stars of the post-90s generation, Wu Yifan is the first global brand spokesman of Asian face in Lv's 100 year history, burberry's first non British spokesperson, Bulgari global brand spokesperson, L'Oreal men's global spokesperson, Lancome Asia Pacific brand spokesperson; Lu Han is Gucci brand spokesman and Audemars Zhang Yixing is the first men's wear spokesman for Valentino Greater China and Calvin Klein spokesman for Greater China

After 00, Yimu Qianxi served as Tiffany's "Tiffany t spokesperson", Givenchy make-up spokesperson, Bulgari global fragrance spokesperson, Emporio Armani makeup and men's skin care spokesperson, Bottega Veneta's first Asia Pacific spokesperson and rimowa China's brand spokesperson; CAI Xukun is Prada's brand spokesperson; Song Weilong is Burberry's color makeup spokesman and Emporio Armani, Greater China and Asia Pacific men's watch image spokesperson; Wang Junkai as Guerlain skin care spokesperson; Chen Feiyu as Dior brand ambassador; Wu Lei as Michael kors' first men's spokesman; Ouyang Nana as L'Oreal Paris brand spokesperson and Roger Vivier's China region spokesperson

The deep participation of the stars themselves has become an important detonating node in the marketing offensive of luxury brands. For example, Bottega Veneta, the spokesperson of e-business Qianxi, was sold out of stock both online and offline on the day of official promotion of Bottega Veneta. According to media reports, the annual sales of Armani cosmetics he endorsed increased by 252% year-on-year, setting a single day sales record of the brand and breaking the sales record of high-end beauty makeup!

Why are luxury brands keen to choose generation Z young idols as their spokesmen?

Bain's report "China's luxury market in 2020: unstoppable" shows that: millennials (also known as generation Y, generally referring to the post-80s and post-90s) are the main force of tmall's luxury consumption, accounting for more than 70% of the total market share; the rising star generation Z is more accustomed to online shopping, and with the growth of income, its consumption growth rate is the highest. "Pursuing fashion" has become the main reason for them to buy luxury goods, so they prefer niche design and joint brand. From January to October this year, the consumption amount of luxury joint brand and limited edition after 1995 increased by 300-400%.

Where consumers are, luxury brands will go; where consumers like, luxury brands will embrace.

Hainan duty free

On June 1, the general plan for the construction of Hainan free trade port was released. In this policy, 60 items are selected (from the website of Hainan Provincial People's Government), and two of them involve luxury consumption——

06. The imported commodities purchased by the islanders are exempted from import tariff, import value-added tax and consumption tax.

07. The amount of duty-free shopping in outlying islands will be increased to 100000 yuan per person per year and varieties will be increased.

"This is to force Hong Kong to create a new shopping paradise!" Will it affect the consumption pattern of domestic luxury goods?

"Securities Daily" reporter calculated an account: take a luxury luxury watch as an example, the original price of 94800 yuan for a watch in the duty-free shop is 87500 yuan, saving 7300 yuan compared with the original price, and the difference is about 7.7%; the original price of another luxury jewelry necklace is 61500 yuan, which is 49250 yuan in the tax-free shop, saving 12250 yuan, and the price difference is nearly 20%; compared with the beauty products with lower price The price difference between duty-free and non tax-free goods is relatively large, and some can reach nearly 40%.

As a single duty-free shop with a global scale, Sanya International duty-free city (CDF) has ushered in the flow of shopping people from all over the world after the implementation of the overall plan. Various brand stores also attract a large number of shoppers (some big brand stores even need to queue up to limit the flow). Among them, Xianghua district is the most popular, perfume and cosmetics are tourists' favorite.

On December 28, with the approval of the State Council, six new duty-free shops were set up in Hainan Island. In addition to the existing four duty-free shops, there are five market entities and ten duty-free shops in Hainan Island. Behind the new stores is the increasingly popular luxury consumer market.

China big show

On July 28, Dior's 70th Anniversary Tour Exhibition - "Christian Dior: designer of dreams" was officially opened at Shanghai Dragon Art Museum (West Bank district). This is a heavyweight (offline) fashion exhibition in Shanghai and even in China after the new crown epidemic.

The exhibition is divided into 13 theme exhibition areas, from gorgeous dresses to classic works, from legendary past to extraordinary life, comprehensively and deeply reviews Dior's 70th anniversary legend with the public, showing Dior's continuous brand spirit in the past 70 years.

Different from the previous two stations, the exhibition also incorporates the works of eight Chinese artists and the design draft of the brand's chief designer to interpret Dior's creation story in the past 70 years from a Chinese perspective.

On the evening of August 6, LV 2021 spring and summer men's wear show with the theme of "message in a bottle" officially came to China in Shanghai oil tank art park near the Bank of Huangpu River. Virgil abloh, the artistic director of men's wear brand, integrates Chinese humanistic feelings into the show and strives to share the story of landing and native land from a global perspective. The "Dragon Dance" with Chinese local flavor has appeared on the Shanghai show.

From August 31 to September 1, prada mode Shanghai Cultural Club welcomed more than 2100 guests from various cultural fields in Prada Rongzhai, the historical residence in the center of Shanghai. They jointly attended the two-day conception of the famous director, producer and writer Jia Zhangke in Prada Rongzhai, and presented the creation of a specific field named "face Min". The club is synchronized with Prada's official wechat app. Through the three live channels of "eating noodles", "surface" and "meeting", the club synchronously broadcast the whole process, creating a unique digital experience for more than 200000 users.

On September 9, "watches & wonders" advanced watch exhibition was launched in China and presented in Shanghai West Bank Art Center. 11 exhibition brands presented a vast world of advanced watch making and new Masterpieces for all walks of life. This exhibition is also a continuation of the online release of "clocks and wonders" in April this year. In addition to enjoying the latest masterpieces of the participating brands, a series of activities will also provide guests with a 360 ° immersive tabulation cultural experience.

On October 31, "see Lv" global tour opened in Wuhan. The exhibition is divided into 7 themes and 5 exhibition halls, including "looking for Louis", "fashion universe", "handbag legend", "arty Capucines", "evolution road", "miracle birth place" and "walking into Damier".

Ramon ROS, CEO of Louis Vuitton group in China, said, "the first stop is in Wuhan, which is also the choice of the exhibition. Wuhan is a heroic city, which is in harmony with the spirit of Louis Vuitton. Since March, Louis Vuitton's Sino French team has started close cross regional preparatory work, in order to praise the heroic city of Wuhan with the power of seeing. "

Every show in China is not only a great opportunity for brand publicity, but also a communication attitude of the brand to Chinese consumers.

"Qixi" war

How much can luxury brands fight for China? Let's take a look at the marketing war launched by various brands for China's "Valentine's Day".

"Tanabata" advertisement of Balenciaga is popular with its unique "retro style". The special series of "hourglass bags" specially customized Chinese calligraphy graffiti art in the brand logo design to echo the traditional festival of expressing love, "just like a handwritten love letter". But that can not hide the "soil dregs" of the rural wind, set off the network of the whole people spit, but also for this "Chinese Valentine's Day" marketing war played a hot start.

In contrast, Emporio Armani and Hu Ge launched a short film with the theme of "love me for Hu I am". In the short film, Hu Ge sits elegantly, and the two well-known sentences in Guan Ju are displayed on the screen: "Guan Guan Ju Jiu is on the river island." Later, Hu Ge recited a modern poem "those that can't be said", which tells a moving story that has not been expressed and hidden love through his own interpretation.

Valentino, Yang Zi and Yang Yang jointly shot the heart methodology. The short film uses three scenes to interpret some interaction between male and female students in the ambiguous period, and expresses the subtle thoughts of both sides by means of spiral stairs and Rubik's cube, echoing the urban romantic nature of the brand.

Inspired by "epidemic isolation", prada shot a commercial film "modern love story" with the theme of "isolation". In the parallel world shooting technique, the details revealed by the fingertips and eyebrows of the models convey the subtle feelings between lovers one by one. Although they are in two places, they have never lost their thoughts. This not only combines the hot spots of current events of the epidemic, but also has a deep insight into the feelings under the special period, which can be called "off center marketing".

What is even more controversial is that Fan Bingbing, who had been away from the public for a long time due to "tax evasion" two years ago, formally returned with Guerlain lipstick advertising blockbuster and global brand spokesperson; and Dolce & Gabbana, who was boycotted two years ago because of the humiliation incident, appeared on the open screen interface of sina Weibo mobile client. Two virtual KOLs dressed in the brand's "Double Seventh Festival" series, to the sea Taking the beach as the background, the latest advertising blockbuster was shot.

It is worthy of respect for luxury brands to cater to Chinese consumers, but more sincerity and efforts are needed.

Luxury E-commerce

In 2020, the outbreak of new crown will accelerate the process of the layout of major luxury brands, especially in China.

As the most well-known e-commerce platform in China, tmall has a huge consumer group. The "double 11" every year is a phenomenal consumption miracle. Major luxury brands have seen the consumption potential of this online shopping platform. In the case of difficulties in further expanding the offline market, it is undoubtedly a very good choice to choose a high-quality online channel for sales channel expansion.

The arrival of global luxury brands can bring more high-quality brands to the luxury Pavilion, and provide consumers in the platform with more high-quality and comprehensive products.

As a result, as China has increasingly become the most important battlefield of luxury brands, the major brands have cooperated with tmall one after another.

But this does not mean that tmall can rest assured. Although topLife, an independent luxury e-commerce platform under Jingdong, officially closed in July last year, it has replaced a "vest" - topLife, which was incorporated into the Chinese business of British luxury e-commerce farfetch, which was founded in 2008, and farfetch has established a first-class entrance in Jingdong app. Before that, farfetch has obtained an investment of $397 million from JD Become its shareholder.

Farfetch, which holds brand resources, is a strong partner for JD to enter the luxury industry. It has established cooperation with more than 1000 luxury brands and boutiques. The investment group and Chanel group of Franois Henri Pinault, the boss of kering group, the world's second largest luxury goods group, are also among farfetch's shareholders.

Now, farfetch's development in China has entered a critical strategic period. In addition to confronting tmall, its global "rival" Yoox net-a-porter (ynap) is also constantly moving in China.

As early as October 2018, Alibaba announced the establishment of a joint venture with ynap, a luxury e-commerce company owned by Richemont group (the world's third largest luxury group); and just three months later, farfetch also received a US $125 million investment from Tencent. In a statement, farfetch was positioned as "the main gateway for luxury goods to enter China", which will help "Western luxury" Brands reach Chinese consumers through Tencent's wechat platform. ".

In November 2020, according to the "WWD international fashion news", Alibaba is in the process of negotiating with farfetch for investment, with an investment amount of US $300 million. The two sides are also discussing the establishment of a joint venture in China. According to people familiar with the matter, Alibaba's competitor's investment (meaning Tencent) does not contain provisions to prevent Alibaba's investment.

On November 6, farfetch, Alibaba and Richemont group jointly announced that the latter would jointly invest US $300 million to purchase the US $600 million worth of private convertible bonds issued by farfetch, jointly inject US $500 million into farfetch China, and establish joint ventures to establish a global strategic partnership, provide more opportunities for brands to enter the Chinese market and accelerate the global development Digital upgrading of luxury industry.

Surprisingly, Richemont is also considering a stake in farfetch.

Tmall and Jingdong and Tencent; Ma Yun and Liu qiangdong and Ma Huateng; ynap and farfetch; Lifeng group and Kaiyun group Is this "you have me, I have you" competition pattern, is it a harmonious business with "prosperity" or a capital game? Time is the only proof.

China International Fair

From November 5 to 10, 2020, the third China International Import Expo (hereinafter referred to as "ICIF") was held in Shanghai National Convention and Exhibition Center, attracting more than 3800 enterprises from more than 180 countries, regions and international organizations. The exhibition area exceeded 90000 square meters, highlighting China's strong consumption power under the background of consumption upgrading and overseas consumption accelerating return.

For luxury companies, this is a great opportunity to show off.

With the theme of "ingenuity and innovation", Lifeng group, together with its 11 brands, demonstrated outstanding ingenuity and innovative achievements. Gu Jialin, the chief executive officer of the fair in China, said: "this is a very shocking experience for us. The fair has built a business promotion platform for multinational enterprises, which has brought far-reaching positive impact on the development of exhibitors in the Chinese market. Here, the exhibitors are able to show their advantages and strengthen their close relationship with the Chinese market. "

Kaiyun group, with its full brands, will show its achievements in sustainable development this year. Cai Jinqing, President of Greater China, said, "Kaiyun group cherishes this important opportunity to participate in the Expo again this year. We will share our vision for the future development of the luxury industry and the role of Kaiyun group in the process of "weaving a sustainable fashion future". In addition, we hope to expand cooperation with business partners and stakeholders in China and continue to jointly portray the vision of modern luxury. "

As the "veteran of the Three Dynasties", L'Oreal, a global cosmetics group, said that the fair has become a 360 ° window to fully demonstrate L'Oreal's efforts in innovation, development, science and technology, digitization, and sustainable development. In his speech at the opening ceremony, "under the guidance of the new development pattern of" double cycle ", the China International Fair is undoubtedly an important link to improve the high-quality supply of" internal circulation "and promote the high-level opening of" external circulation ". With the excellent platform of entering the Expo, L'Oreal will complete five new brands in mainland China this year, setting a new record in terms of quantity. "

China capital

"Is it possible (how long will it take) for China to produce a boutique / luxury brand?" This long-standing old problem seems to have a new clue in 2020.

On December 9, 2020, EXOR group of Italy and herm è s group of France announced that they had reached an agreement. EXOR group will increase the capital of SHANGXIA by about 80 million euro and hold a majority share of the brand. Axel Dumas, executive chairman of herm è s group, said that he would continue to work with EXOR group and brand founder Jiang qionger as an important shareholder of "SHANGXIA" for a long time in the future, so as to add wings to the future development of "SHANGXIA".

"SHANGXIA" was founded by French herm è s and Chinese designer Jiang qionger in 2008. Its brand positioning is to perfectly integrate Chinese traditional handicraft and brand's unique interpretation of contemporary luxury. Inspired by Chinese culture and aesthetics, SHANGXIA presents elegant and innovative product series: starting from home, it gradually expands to ready-made clothes, leather goods, jewelry and even tea business space.

However, "no fashion Chinese website" directly wrote in the report that "Hermes will sell the controlling rights of its jointly founded Chinese brand, Shang Xia, for 80 million euros, which means that the French giant's entrepreneurship in China has failed."

In a short period of ten years, "SHANGXIA" has developed into one of the first batch of Chinese brands on the international luxury stage, and its development trend has also been interpreted by the industry as one of the answers to "whether China can be born into a boutique brand".

Looking back on China's capital and luxury brands in 2020, it is also a mixture of sadness and joy.

Two years ago, Ruyi group offered us $600 million to acquire the controlling equity of Swiss luxury brand Bally. However, two years after the two sides reached an agreement, Ruyi group still failed to raise the required us $600 million, and the outbreak of the new crown epidemic has made it more difficult for Ruyi group to raise funds. If the financing problem further worsens, it will lead to more problems in many brands it invests in.

In September, baccarat, a French luxury crystal brand, said it had entered the court's "Interim governance arrangements". After the announcement raised concerns, it was urgently clarified that the Provisional Administration's responsibility was to comprehensively assess the situation between its Chinese owner Fortune Foundation and its creditors, not to initiate bankruptcy proceedings.

Fengyuanhong group, which belongs to the company, promised in its acquisition two years ago that it would "revive baccarat's market position based on the Asian market's demand for luxury household goods such as hand carving, chandeliers and tableware." However, after two years, baccarat said that it had not yet received an additional investment of 20-50 million euros from fengyuanhong group at the time of acquisition.

On November 5th, Clarks, a 100 year old British shoe brand, agreed to sell a majority stake to Lane capital, a Hong Kong based private equity firm, in a deal of 100 million pounds (about ￥ 860 million). This is the brand's founder family in its 195 year history, and the current chairman of lane capital is Mr. Li Ning, the founder of domestic sports apparel giant Li Ning. "Clarks is one of the most famous consumer brands in the world, and we look forward to working with the founding family to continue to provide excellent products and services to consumers," he said

Chinese consumers have become the purchasing group of global luxury goods industry, and made in China has become the production base of global luxury goods industry. But where are the Chinese brands?

Strong Chinese capital is not everything. The rise of Chinese brands still needs more efforts.

The surging 2020 has passed. What kind of 2021 will China present for the global luxury industry? rub one's eyes and wait!