Prestige Brands Forum: Insight Into The China Luxury Market
Over the weekend, Jing Daily attended the 2011 Prestige Brands Forum hosted by the China Europe International Business School in Shanghai. Held on Saturday, April 16, the event consisted of numerous panels and speeches by luxury executives regarding the current state, and the potential future, of the Chinese luxury market.
Attendees mainly consisted of student alumni, media, and VIP guests from luxury labels. The forum mainly served as crash course on China’s emerging luxury consumer, and confirmed the observations of many industry insiders on the trends currently shaping the Chinese luxury market. The country’s younger consumers were prominently highlighted during the forum, with several speakers discussing the role of new media in reaching this increasingly coveted demographic. Additionally, the relationship between luxury and status was a question often raised, with panelists confirming that there is a correlation between luxury and status in China, yet they are not one and the same.
Many attendees wanted to know what was needed to build a successful luxury brand in China, with the most common answer being time; Time is necessary for a given brand to establish a name, a heritage, and to grow. Mark Ritson, associate professor of Marketing at Melbourne Business School, doesn’t foresee a homegrown Chinese brand becoming an international brand any time soon, but others remarked on the potential of “new” luxury categories, such as tea or Chinese wool.
Michel Gutsatz, Director of the MBA & EMBA Programme at Euromed Marseille Ecole de Management, gave a presentation on the critical dimensions of building a luxury brand: cultural background, the essential role of creation (creativity), quality, time and heritage, serving elites, high relative prices, and universal appeal, adding that true luxury is about occupying a niche rather than appealing to the general population. Additionally, Mark Ritson and Jean-Claude Biver, CEO & Chairman of Hublot, heavily emphasized the importance of a brand’s starting executive team, exemplified by Biver’s team, who has worked together for nearly two decades under his passionate direction.
Overall, the event was well-attended and once again confirmed the potential that the global luxury industry sees in China. Over the course of the forum, speakers broke China’s evolving consumer market down into six trends to watch: increased domestic shopping; second- and third-tier cities as the new battleground; comprehensive service expectations; the growing importance of online platforms; brand-building localization; and increased and more diversified gift-giving. China has a unique potential to grow due to its gift-giving culture, which Ritson observed adds an additional 30 percent of revenue over purchases made for oneself. Additionally, speakers noted that there is ample room for growth in China, as luxury brands will continue to step up the products offered and their levels of customer service.
Check back on Wednesday for Jing Daily interview clips and quotes from Jean-Claude Biver, CEO & Chairman of Hublot, and Mark Ritson, associate professor of Marketing at Melbourne Business School.