Where is the Chinese premium market heading? Will we see the emergence of Chinese Prestige brands?

Lacoste Porcelaine detailThese were the questions I got from an industry analyst the other day.  In fact, these are the questions being posed constantly in the press covering the business of luxury.
Full of myself, I thought that maybe more than one person might want to read my take on the subject and engage in the discussion…

“I think you will see the growth of one might call the “sophisticated” luxury segment in China over the coming years – and there will be a few locally created Chinese- as well as Western labels acquired by Chinese companies in the mix.   I see it as a natural market evolution.  The first phase we are still in is all about chasing generally recognized, ostentatious symbols of success and power.  What are perceived as ‘safe choices’ also when it comes to good taste.  LV, Dunhill or Château Latour have made brisk business with the frenzy of copying and out doing each other that developed.   

But now, there is segment of the population that is maturing and a second generation of high net worth/upper middle class individuals who want to differentiate themselves from a crowd they consider rather ‘primitive’ and bling.  They want to show their professionalism and sophistication by choosing lesser known brands.  Brands that require some searching for and deeper understanding.  This trend will also be ‘helped along’ by the new communist government policy of ‘toning down the blunt exhibition of wealth’ as well as ‘helping emerging Chinese industries’.  A policy put in place to soothe ‘unease’ about the ever-increasing social disparity.  Small, more subdued Chinese luxury brands might particularly Exception First Ladybenefit from these two overlapping dynamics.   You might have read about the buzz the new Chinese first lady created in China (and said press) by wearing clothes and handbag by “Exception de Mixmind’ a niche Chinese label from Guanzhou, rather than the typical Chanel or Prada.   You might also have read about Chinese (incl. Hong Kong and Taiwanese) investors scooping up niche luxury labels from Lanvin to ST Dupont and Kent & Curwen and investing in their revival.  At the same time, Western groups are looking to own Eastern Brands (eg. Hermes and Shiang Xia, L’Occitane  and Korean Erborean, etc.) or at least are seeking collaborations with cutting edge local artists or celebrities (eg. Lacoste/Li Xiaofeng or Botteg Veneta and Jinjun Di).   The consumers, the government and Chinese investors, all want to see a local sense of sophistication and luxury to emerge and homegrown brand to succeed.  …  They just don’t trust themselves – yet. 

Your own take on the subject and comments are welcome!

Lacoste Porcelaine

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About JP Kuehlwein

JP is a proven business leader, recognized strategy expert and global brand builder. He has a 20+ year track record of successfully creating, re-staging and growing brands and their organizations around the world. Before co-founding Ueber-Brands Consulting, JP served as Managing Director of Global Strategy & Innovation, Premium Consumer at Procter & Gamble and was Executive Vice President of Frédéric Fekkai, a global prestige brand and fully owned subsidiary of P&G. He is also an External Director of Smith & Norbu, a Hong Kong-based luxury optical frame maker. JP has co-authored the bestselling “Rethinking Prestige Branding – Secrets of the Ueber-Brands” with Wolf Schaefer, which is quickly becoming a marketers reference book. JP is regularly involved in public speaking and teaching across industries and markets in English, French or German language. JP and Wolf’s blog and podcast ‘Ueber-Brands’ and related events are sought-after by brand builders and marketing leaders around the world. He has been named ‘Inspirational Marketer of the Year’ by the Association of National Advertisers/The Internationalist among other awards. Based out of New York City, JP is on the advisory board and a guest lecturer at the Masters Program in Cosmetics and Fragrance Marketing and Management at the prestigious Fashion Institute of Technology (NY), an advisory board member of the CMO Council (San Jose), L2 Inc. (NY) and L2 Inc. (NY).
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2 Responses to Where is the Chinese premium market heading? Will we see the emergence of Chinese Prestige brands?

  1. Mário F. says:

    Non related to this specific post: Just to very kindly ask you to keep posting on this blog! The quality and content of your posts and case studies is incredible!

    Like

  2. Found this insight that totally made me smile: Eddie Law, chairman of Princess Yachts, contrasted the Chinese take on yachting, which was typically more social than the European:

    Chinese customers typically say “I want my family, my business partners, I want a boat with a lot of people. Let’s do barbecue together”. But Europeans were more likely to think “I want my wife and myself go to somewhere for three months without anyone knowing where I am”.

    From WARC, May 3rd 2013: China’s yacht market booms
    BEIJING: The Chinese luxury goods market is set for further diversification, with some 50,000 yachts worth a total of 100bn yuan expected to be sold over the next 10 years.

    Like

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