Luxury sales are down in China due to a variety of factors: from the economic slowdown to the corruption crackdown, and even the changing tastes of the Chinese consumer. Luxury brands that relied on China sales to prop up their numbers are scrambling for solutions even as they are being forced to shut down stores. Is this the end of luxury’s dream run in China? What strategy should brands deploy to regain lost ground in China’s luxury market? CKGSB Knowledge spoke to Benoit Garbe, Senior Partner, and Nicolas Derville, Analyst, Millward Brown Vermeer, to diagnose what’s wrong with China’s luxury market and offer possible prescriptions.
Luxury brands have never had it this bad in China. For most of them, China is no longer the cash cow it once was. Multiple reports suggest that the luxury retail business in China is shrinking. The top 10 global luxury brands as per Millward Brown’s latest BrandZ report—a list that includes names like Louis Vuitton, Hermes, Gucci and Chanel—saw 6% of their total brand valuation evaporate in 2015, and China is partly to be blamed. Already the likes of Louis Vuitton, Armani, Prada and Chanel have started shuttering stores in China. But all is not lost and luxury can still make a comeback in China.
Ogilvy & Mather Chief Knowledge Officer Kunal Sinha believes that China’s lower tier cities hold the key to the country’s growth If you thought that China is all about big cities like Beijing, Shanghai and Guangzhou, think again. The next big areas of growth are lower cities in China’s interiors. With 200 million households, rising incomes […]
What luxury clothing retailer Shanghai Tang’s ascent means for made-in-China luxury brands that play up their Chinese identity. Nestled in a three-storied building on Hong Kong’s hip Duddell Street is Chinese luxury clothing retailer Shanghai Tang’s 1,400 square meter flagship store, the largest it has globally. ‘Shanghai Tang Mansion’ as this store is called is, in […]
What is luxury brand management all about? How do you define a luxury brand? Is it only about price? Or is there more to it? Vincent Bastien, former CEO of Louis Vuitton, and currently Professor of Marketing at HEC School of Management in Paris, believes that luxury is a much misunderstood term. A product that […]
Luxury brands change tactics to drive sales in tier-two and tier-three cities Just a decade ago, Jiefangbei Pedestrian Street in downtown Chongqing was a bustling hub of cheap goods and low-end domestic brands. To see a woman stroll down the street toting a Louis Vuitton bag wouldn’t have been unbelievable: everyone would have just […]