“The upcoming Chinese Lunar New Year will be the next important indicator to the Chinese economy and consumer confidence,” said Andrew Khan, the Vice President of Marketing at Moët Hennessy Diageo China.
Khan acknowledged the negative impact of the current economic environment and trade disputes on the brand following double-digit sales growth in China in 2018. He said, “That is why this [pre-Chinese New Year] campaign is so important for us.”
Like many other luxury brands, Moët Hennessy Diageo China, a joint venture between the French luxury conglomerate LVMH and the global spirits group Diageo, has launched a nationwide, multichannel marketing campaign this month to welcome the Year of the Pig.
Amid marketing missteps made by brands like Burberry and Bvlgari that showcased various levels of cultural appropriation, insensitivity, and misinterpretation, what sets Moët Hennessy Diageo's campaign apart is the brand’s continued bet on the power of Chinese artists to deliver authentic messages that can truly resonate with a Chinese audience.
“Last year, we worked with [acclaimed Chinese artist] Jiang Shan, and this year, we chose Zhang Guangyu,” said Khan. “We work with Chinese artists for the particular reason that the Chinese element and culture perhaps can only be accurately interpreted by Chinese,” he further explained.
Zhang Guangyu, a London-based Shanghai native, is an emerging artist who graduated from the Central Saint Martins College of Arts and Design. He was featured in Saatchi Art's “One to Watch” list for his colorful paintings, mixed media works and digital collages blending the two cultures -- China and Europe -- in beautiful collections.
For the collaboration with Hennessy, “He spent some time in the cognac house where we taught him what Hennessy is -- story, history, and craftsmanship. And he took a lot of inspiration from the trip,” said Khan.
Zhang created a special design filled with Chinese cultural symbols including but not limited to boars, cranes, goldfish, and lanterns. This scene presents a “dream of past and present, heaven and earth -- the natural and beautiful cycle of life. The circles also represent fulfillment and perfection. The two concentric circles are meant to set the scene, an artistic presentation of Hennessy’s double distillation,” according to a statement by Hennessy. Zhang’s design will appear on all Hennessy product packaging in celebration of the 2019 Chinese Lunar New Year.
To introduce its Chinese New Year special edition to shoppers and to boost retail sales during this particularly festive season, Hennessy has pushed forward a number of online and offline initiatives. On WeChat, for example, it launched an HTML5 page that invites users to play a fortune-telling game to reveal what the year holds in terms of wealth, love and health. The brand also has organized two offline events in Xiamen (Jan 10-13) and Shanghai (Jan 24-27).
Hennessy hopes that its efforts will pay off. Not everyone is as upbeat on the market at this time.
Globally, the cognac consumption market is facing a plethora of risks beyond just waning Chinese demand. Investment bank Morgan Stanley noted on January 16 that "while cognac sales have remained healthy in recent years, cognac's high and concentrated exposure to two regions [the U.S. and China] has increased, and previously material consumption in some markets [mostly Japan, the UK, and France], has now become negligible. This creates a risk, as do global trends toward health and wellness."
In what may be a silver lining amid the negative investor sentiment, the latest sales figures from the French spirits group Remy Cointreau, Hennessy's key rival, remained strong. On January 22, the maker of Louis XIII reported sales grew 8.7 percent year-on-year in the three months to Dec. 31, beating analysts' forecasts. Meanwhile, the group maintained its full-year profit forecast in spite of recognizing slowing demand from China.
The slowing demand isn't deterring Hennessy's optimism for the Chinese market either.
"Hennessy has been in the Chinese market for quite long time and we take a much longer view," said Khan. "China's potential is tremendous in the long term, and our potential is far from being realized. In 2019, we will continue to improve [the brand] and be culturally strong and relevant."