The Challenge of the increase demand for luxury brand from Chinese market

Presented by Huang Jing 06, December, 2011

In UK, retail value is from £ 1950 to £ 2250 during 2011

Iconic bag LADY DIOR

Lady Dior Average weekly Sales Figures 2011

The Consumption of Lady Dior by Chinese is much higher than either European or others.

Economics Environment

The tables show China GDP has been incredibly growing while European area went down oppositely.

In China

Skylines in Shanghai

Million private car ownership

In Europe

soaring unemployment rates

Bank Crisis

Shops were closing down

Question Marks:

Are economics the only reason for high Chinese demand, or is it more complicated than that? And is it all good news for luxury brands?

More Reasons are…

Culture Focus and Lifestyle Dress Code Consumer Promotion Events Brand Appeal

The Comparison between China and

Europe

Culture Focus and Lifestyle

Success defined by what you have, you do, what your social position is

In China

In Europe

more focus on the life they want

Dress Code

In China There is no strict boundary of dress code to require women wear in different occasion.

In Europe People follow the dress code to identify themselves and fit in the different social life.

Consumer Promotion events

In China

Lady Dior bag of light

In Europe

Brand Appeal

Luxury brands for both of the markets convey a quality standard of excellence, it acts as social codes indicating access to the rare, exclusive and desirable.

Chinese people enjoy the visible and direct

definition of being high social status which luxury brand value could bring to them. They

are desired and willing to pay for the big ticket luxury they want.

European people would like own the luxury to suit their lifestyle. Also they are paying to be part of the story and brand culture.

We need to think again…

are Chinese (former famous money saver)

the only luxury big spender for luxury fashion brand nowadays?

Is there worry for destroying the brand value or luxury exclusivity?

One Case Analysis

Christian Dior, Gucci, Jimmy Choo, three boutiques in Birmingham are all stocking and selling Bag and other accessories, the different strategy of product and price management shows different sales performers.

Birmingham Selfridges Concession Sales Figures January to October, 2011

Price and Product Range and Sales Percentage

Nationality Consumption Figures

According to the figures above, they show British surely spend in Luxury brand as a European market, no less than Chinese. Chinese are more prepared to invest in one-off big ticket items, or actual more items.

The challenges..

deliver the brand value globally

Maintaining the exclusivity or global brand reputation

Conclusion

Luxury brands need to balance their wish to expand in new markets without abandoning their traditional markets to avoid the possibility of brand value and exclusivity damaging, even the business growing.

They should concentrate on promoting brand values that are compatible across these markets. But continue to deliver the brand message in a tailored way.

Discussion

Why do you think Chinese

like to buy luxury brands so much?

Thank you !

Reference Lady Dior Average weekly Sales Figures September,

October2011 from Christian Dior internal information Oct, 2011

China GDP, Euro Area GDP Figure Tables from Trading Economics

http://www.tradingeconomics.com/ Christian Dior, Gucci, Jimmy Choo Sales

figures/Transaction detail Birmingham, January to October, 2011 collected from sales figures,2011, Selfridges, Birmingham

The percentage figure of nationality consumption from Christian Dior, Gucci, Jimmy Choo, Selfridges, Birmingham collected from staff interviews, 21st, Nov, 2011

Luxury Brands in China by KPMG http://www.kpmg.com.cn/en/virtual_library/

Consumer_markets/CM_Luxury_brand.pdf