Chinese Luxury Brands On The Move-Dscount Handbags
China s growing affluent consumer segment has been attracting worldwide luxury brands for a long time. Gucci, LV, Zegna, and many other top brands tapped into the Chinese market in the early nineties, long before it started generating revenues1. And quite rightly so, as more than 300,000 Chinese now have a net worth of more than US$1 million. The mainland s millionaires control about US$530 billion in assets and more than 170 million Chinese can afford to buy top-tier brands2. Indeed, it seems clear now that the Chinese luxury consumer market, which did not even exist a mere 20 years ago, is on the path to dominate top end retail.
But what about domestic luxury brands
China has a long history in the appreciation of luxuries for example, tea, jade, and silk - and given the impressive growth of domestic consumption of luxury goods, local brands should have plenty of opportunities to grow.
Despite Chinese consumers thirst for luxury, very few local luxury brands have taken off. In fact, several analysts have observed that when it comes to luxury Chinese consumers are more likely to buy products made outside of China3.
Previous Labbrand research has confirmed that consumers esteem towards luxury products is heavily influenced by the brand s country of origin. Indeed, a foreign/westerner origin seems a given for many luxury product categories.
Still, if it is true that in industries like top fashion garments and accessories that foreign top brands dominate, in other industries, and specifically those having deep roots in China s heritage and tradition, Chinese brands have good chances to gain the upper hand.
In fact, in a recent MasterCard survey, Chinese top spenders have been found to prefer Hong Kong born Chow Tai Fook over Cartier and domestic Wu Liang Ye and Maotai over Spanish, Australian and German liquors4.
Indeed, the same survey has found that high-end Chinese consumers rank quality ahead of other considerations with a notable 92.7% of respondents citing quality as the first criteria when buying luxury, well before brand recognition, still scoring a good 68.3%, or fashion design, with 58.5%5.
Whereas until a couple of years ago it looked like Chinese brands had no chance to tap into the luxury market6, under these circumstances a window of opportunity seems available.
So the key issues now are:
1. What are the domestic brands that are already perceived as top luxuries by domestic consumers
2. What are the challenges and opportunities they have to face in order to win consumer preferences at home and abroad
Labbrand has set to investigate these questions. We have interviewed a few people, both industry insider and outsider, and have drawn the list of the 10 top Chinese luxury brands:
1. NE Tiger - established in 1992
2. Chow Tai Fook - founded in 1929
3. Kweichow Mao Tai - established in 1999
4. Omnialuo - set up in 1998
5. Erdos cashmere - started in 1979.
6. Wuliangye - founded in 1959
7. Changyu - established in 1892
8. Yunnan Pu er Tea established in 1975 and privatized in 2004.
9. Dorian Ho - established in 2004.
10. Xiangyunsha Silk - established in 2003
We have asked people what made them feel these brands were luxurious.
The heritage brand
Interestingly enough, the most commonly cited attribute was Chinese heritage . In fact, many of these brands draw or are deeply rooted in Chinese culture.
- Kweichow Mao Tai, Wuliangye, Changyu, Yunnan Pu er Tea, Xiang Yun Yarn Silk all are deeply rooted in China s cultural heritage as they brand traditional products of China. Indeed, there is no foreign competitor that could challenge these brands on the same position domestically. For traditional products such as bai jiu liquor, tea, ginseng and handcrafted silk, there is no other country that has the same expertise as China does. Take Yunnan Pu er Tea for example: in 2005, 500g of 64-year-old Pu'er tea sold at auction for one million yuan, making it six times more expensive than gold7.
The young fashionable brand
- NE Tiger, Omnialuo and Dorian Ho are all relatively young brands, and they all compete in a field where Chinese brands are relatively weak: fashion luxury. Their strength, however, is rooted in the fact that they source, even if in different ways, from Chinese culture by combining Chinese traditional elements with western style craft techniques and quality manufactures.
Still, when it comes to buyer preferences, none is yet able to compete on equal terms with foreign fashion luxuries. None of them enjoy the same brand awareness of European top luxury brands - even though both have participated in top fashion shows in China and abroad - and they are generally not regarded as luxurious as their foreign counterparts. Generally speaking, the common reasons given to justify this conception were:
* they are not as status-making as foreign fashion brands
* consumers did not trust the quality standard to be on the same level of
foreign brands
The quality experts
- Chow Tai Fook and Erdos Cashmere, on the other hand, are brands of a different kind. Their brand equity is rooted in their capabilities to match quality and precious products with good targeting, capacity that has helped them be known and highly regarded domestically.
For instance, Chow Tai Fook is one of the most famous luxury jewelry brands in China. Founded in 1929 in Canton and then acquired by Hong Kong entrepreneur Mr Chen Yu Tung in 1956, it combines luxury with fashion and high quality products to appeal to mature customers in higher income groups8.
Chow Tai Fook illustrates the value that word of mouth has in Chinese culture. The company developed its brand name more by reputation and word-of-mouth than any formal business plan. They have managed to win consumer preferences thanks to their long history and sound capabilities (Chow Tai Fook has been the first jewelry brand to use gold 999,9 in pure gold ornament, which has become an industry standard today).
Building Chinese luxury
So what are the challenges and what are the opportunities Chinese luxury brands have to face in order to win consumer preferences at home
On the one hand, it seems that Chinese consumers highly esteem domestic brands if their status and quality standard are well accounted for. Chinese heritage, cultural elements and traditional skills seem to be key characteristics of every top domestic brand in luxury. Indeed, for those product categories where China has historically developed a long tradition, Chinese brands seem to be unrivaled.
In the first instance, we believe that Chinese brands can successfully draw from their heritage in order to build a sound customer base and eventually raise brand awareness.
Even though there are still a few obstacles hindering the development of Chinese luxury brands:
1. Lack of expertise and marketing capabilities
Among our top ten, only a few brands invest consistently in branding. Many of them rely only on their own heritage to attract consumers and do not really invest in any communication activity. Brands such as Xiangyunsha Silk or Yunnan Pu er Tea do not even have a well designed website, nor do they protect their trademark properly.
1. Made in China label
Chinese consumers do not easily view brands made in China as luxury and Chinese brands are generally associated with low quality. Apart from the product categories where China is traditionally strong, respondents of Labbrand s survey clearly showed that:
* The concept of luxury is strongly associated with the question of brand awareness. The more brand is know, the better it will support and show the status of the buyer.
*Esteem toward luxury brands seem generally higher for brands that are not labeled Made in China .
*The brand is an indicator of the quality and design. Foreign fashion luxury brands are assumed to guarantee not only the exclusivity of the design, but also the originality and safety of the product.
Creating strong brands is a difficult endeavor. Producing strong luxury brands in a market that is affected by a horde of fakes and cheap products is even more complicated.
There is still a long road ahead for Chinese luxuries to compete in the global arena with already well established brands.
However, given the fast pace of development of the domestic luxury market and the changing purchasing attitude of Chinese consumers, Chinese companies now have the tools to understand how to position their brand and how to build luxury identities to satisfy the needs of high end buyers.
1. 2007 October Issue, Cafolla L., China Luxury , A Plus magazine
2. 2006, Dec. Issue, Schwarz B. and Wong V., Money Talks , Insight
3. The top 10 brands preferred by China richest are all made in Europe or USA by Hurun Report 2007 Best of the Best Survey Preferred Brands of China's Richest http://www.hurun.net/bestofbest2006en.aspx
Also cfr:
- note 2
- 2008, Debnam N., Svinos G., China luxury Consumers: Moving up the Curve KPMG
- 2006, Chadha R., Husband P The Cult of the Luxury Brand: Inside Asia s Love Affair with Luxury
4. 2008-02-21, MasterCard Worldwide, cited by Chen Shu-Ching Jean in China's High-End Consumers Seek Quality Over Status , http://www.forbes.com/markets/2008/02/21/china-luxury-survey-markets-equity-cx_jc_0221markets02.html
5. MasterCard Worldwide, cited by Shu-Ching Jean Chen in China's High-End Consumers Seek Quality Over Status , 02.21.08 http://www.forbes.com/markets/2008/02/21/china-luxury-survey-markets-equity-cx_jc_0221markets02.html
6. 2006, Martin Roll, Asian Brand Strategy, how Asia builds strong brands
7. http://www.telegraph.co.uk/news/worldnews/1555518/Tea-in-China-costs-six-times-as-much-as-gold.html
8. A Glittering Legacy - China". HKTDC. 10 July 2008 .
Chinese Luxury Brands On The Move
Previous：Casual Burberry Drawstring Leather Tote
As you know.Louis Vuitton Handbags.Chanel and Gucci HandbBags.popular all over the world.Louis Vuitton Handbags:hundred and fifty years to advocate refined, quality, and comfortable "travel philosophy", as the starting basis for the design.Last year, Louis Vuitton once again in line with the modern women's lives, is simple and elegant design
But what about domestic luxury brands
China has a long history in the appreciation of luxuries for example, tea, jade, and silk - and given the impressive growth of domestic consumption of luxury goods, local brands should have plenty of opportunities to grow.
Despite Chinese consumers thirst for luxury, very few local luxury brands have taken off. In fact, several analysts have observed that when it comes to luxury Chinese consumers are more likely to buy products made outside of China3.
Previous Labbrand research has confirmed that consumers esteem towards luxury products is heavily influenced by the brand s country of origin. Indeed, a foreign/westerner origin seems a given for many luxury product categories.
Still, if it is true that in industries like top fashion garments and accessories that foreign top brands dominate, in other industries, and specifically those having deep roots in China s heritage and tradition, Chinese brands have good chances to gain the upper hand.
In fact, in a recent MasterCard survey, Chinese top spenders have been found to prefer Hong Kong born Chow Tai Fook over Cartier and domestic Wu Liang Ye and Maotai over Spanish, Australian and German liquors4.
Indeed, the same survey has found that high-end Chinese consumers rank quality ahead of other considerations with a notable 92.7% of respondents citing quality as the first criteria when buying luxury, well before brand recognition, still scoring a good 68.3%, or fashion design, with 58.5%5.
Whereas until a couple of years ago it looked like Chinese brands had no chance to tap into the luxury market6, under these circumstances a window of opportunity seems available.
So the key issues now are:
1. What are the domestic brands that are already perceived as top luxuries by domestic consumers
2. What are the challenges and opportunities they have to face in order to win consumer preferences at home and abroad
Labbrand has set to investigate these questions. We have interviewed a few people, both industry insider and outsider, and have drawn the list of the 10 top Chinese luxury brands:
1. NE Tiger - established in 1992
2. Chow Tai Fook - founded in 1929
3. Kweichow Mao Tai - established in 1999
4. Omnialuo - set up in 1998
5. Erdos cashmere - started in 1979.
6. Wuliangye - founded in 1959
7. Changyu - established in 1892
8. Yunnan Pu er Tea established in 1975 and privatized in 2004.
9. Dorian Ho - established in 2004.
10. Xiangyunsha Silk - established in 2003
We have asked people what made them feel these brands were luxurious.
The heritage brand
Interestingly enough, the most commonly cited attribute was Chinese heritage . In fact, many of these brands draw or are deeply rooted in Chinese culture.
- Kweichow Mao Tai, Wuliangye, Changyu, Yunnan Pu er Tea, Xiang Yun Yarn Silk all are deeply rooted in China s cultural heritage as they brand traditional products of China. Indeed, there is no foreign competitor that could challenge these brands on the same position domestically. For traditional products such as bai jiu liquor, tea, ginseng and handcrafted silk, there is no other country that has the same expertise as China does. Take Yunnan Pu er Tea for example: in 2005, 500g of 64-year-old Pu'er tea sold at auction for one million yuan, making it six times more expensive than gold7.
The young fashionable brand
- NE Tiger, Omnialuo and Dorian Ho are all relatively young brands, and they all compete in a field where Chinese brands are relatively weak: fashion luxury. Their strength, however, is rooted in the fact that they source, even if in different ways, from Chinese culture by combining Chinese traditional elements with western style craft techniques and quality manufactures.
Still, when it comes to buyer preferences, none is yet able to compete on equal terms with foreign fashion luxuries. None of them enjoy the same brand awareness of European top luxury brands - even though both have participated in top fashion shows in China and abroad - and they are generally not regarded as luxurious as their foreign counterparts. Generally speaking, the common reasons given to justify this conception were:
* they are not as status-making as foreign fashion brands
* consumers did not trust the quality standard to be on the same level of
foreign brands
The quality experts
- Chow Tai Fook and Erdos Cashmere, on the other hand, are brands of a different kind. Their brand equity is rooted in their capabilities to match quality and precious products with good targeting, capacity that has helped them be known and highly regarded domestically.
For instance, Chow Tai Fook is one of the most famous luxury jewelry brands in China. Founded in 1929 in Canton and then acquired by Hong Kong entrepreneur Mr Chen Yu Tung in 1956, it combines luxury with fashion and high quality products to appeal to mature customers in higher income groups8.
Chow Tai Fook illustrates the value that word of mouth has in Chinese culture. The company developed its brand name more by reputation and word-of-mouth than any formal business plan. They have managed to win consumer preferences thanks to their long history and sound capabilities (Chow Tai Fook has been the first jewelry brand to use gold 999,9 in pure gold ornament, which has become an industry standard today).
Building Chinese luxury
So what are the challenges and what are the opportunities Chinese luxury brands have to face in order to win consumer preferences at home
On the one hand, it seems that Chinese consumers highly esteem domestic brands if their status and quality standard are well accounted for. Chinese heritage, cultural elements and traditional skills seem to be key characteristics of every top domestic brand in luxury. Indeed, for those product categories where China has historically developed a long tradition, Chinese brands seem to be unrivaled.
In the first instance, we believe that Chinese brands can successfully draw from their heritage in order to build a sound customer base and eventually raise brand awareness.
Even though there are still a few obstacles hindering the development of Chinese luxury brands:
1. Lack of expertise and marketing capabilities
Among our top ten, only a few brands invest consistently in branding. Many of them rely only on their own heritage to attract consumers and do not really invest in any communication activity. Brands such as Xiangyunsha Silk or Yunnan Pu er Tea do not even have a well designed website, nor do they protect their trademark properly.
1. Made in China label
Chinese consumers do not easily view brands made in China as luxury and Chinese brands are generally associated with low quality. Apart from the product categories where China is traditionally strong, respondents of Labbrand s survey clearly showed that:
* The concept of luxury is strongly associated with the question of brand awareness. The more brand is know, the better it will support and show the status of the buyer.
*Esteem toward luxury brands seem generally higher for brands that are not labeled Made in China .
*The brand is an indicator of the quality and design. Foreign fashion luxury brands are assumed to guarantee not only the exclusivity of the design, but also the originality and safety of the product.
Creating strong brands is a difficult endeavor. Producing strong luxury brands in a market that is affected by a horde of fakes and cheap products is even more complicated.
There is still a long road ahead for Chinese luxuries to compete in the global arena with already well established brands.
However, given the fast pace of development of the domestic luxury market and the changing purchasing attitude of Chinese consumers, Chinese companies now have the tools to understand how to position their brand and how to build luxury identities to satisfy the needs of high end buyers.
1. 2007 October Issue, Cafolla L., China Luxury , A Plus magazine
2. 2006, Dec. Issue, Schwarz B. and Wong V., Money Talks , Insight
3. The top 10 brands preferred by China richest are all made in Europe or USA by Hurun Report 2007 Best of the Best Survey Preferred Brands of China's Richest http://www.hurun.net/bestofbest2006en.aspx
Also cfr:
- note 2
- 2008, Debnam N., Svinos G., China luxury Consumers: Moving up the Curve KPMG
- 2006, Chadha R., Husband P The Cult of the Luxury Brand: Inside Asia s Love Affair with Luxury
4. 2008-02-21, MasterCard Worldwide, cited by Chen Shu-Ching Jean in China's High-End Consumers Seek Quality Over Status , http://www.forbes.com/markets/2008/02/21/china-luxury-survey-markets-equity-cx_jc_0221markets02.html
5. MasterCard Worldwide, cited by Shu-Ching Jean Chen in China's High-End Consumers Seek Quality Over Status , 02.21.08 http://www.forbes.com/markets/2008/02/21/china-luxury-survey-markets-equity-cx_jc_0221markets02.html
6. 2006, Martin Roll, Asian Brand Strategy, how Asia builds strong brands
7. http://www.telegraph.co.uk/news/worldnews/1555518/Tea-in-China-costs-six-times-as-much-as-gold.html
8. A Glittering Legacy - China". HKTDC. 10 July 2008 .
Chinese Luxury Brands On The Move
Previous：Casual Burberry Drawstring Leather Tote
As you know.Louis Vuitton Handbags.Chanel and Gucci HandbBags.popular all over the world.Louis Vuitton Handbags:hundred and fifty years to advocate refined, quality, and comfortable "travel philosophy", as the starting basis for the design.Last year, Louis Vuitton once again in line with the modern women's lives, is simple and elegant design
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