Chinese Luxury Buyers Becoming Increasingly Discerning About What Sets "First Tier" And "Second Tier" Brands Apart#
Earlier this year for Jing Daily's "10 for '10" expert feature, Patricia Pao and Nels Frye discussed China's rapidly developing luxury consumer market, which last year surpassed the United States to become the second largest in the world. As several experts have noted in recent months, Chinese luxury consumers -- particularly in first- and increasingly second-tier cities -- are becoming far more savvy and picky in their purchases.
Today, a (somewhat lighthearted) article on Hexun's luxury site essentially validates the idea that top-tier luxury buyers are, indeed, becoming ever more fickle. The author excoriates Western brands that position themselves as top luxury brands when entering the Chinese market but are considered "normal" in the countries of their origin. While some of the author's choices (e.g., Coach, which is considered a luxury brand -- if only at the "entry level" -- in the United States) are questionable, others (such as the Gap) make sense.
In addition to the "Top 8 brands that are overrated by Chinese people," the article includes an interesting checklist of what exactly constitutes a "true" luxury brand.
From the article (translation by Jing Daily team):
At high-end shops, do the brands hanging alongside Chanel and Lanvin really count as luxury? Of course no one can regard Gap or MANGO as luxury brands, but when they use celebrities to hawk their goods in ads and advertise them as high-end, some brands punch above their weight. When lots of foreign brands crossed the ocean to come to China, they transformed themselves into "top" brands even though they were second tier in their own country. Now, I'm going to identify those "pseudo-big" brands.
1. Coach
"Sorry if you've got a Coach bag on your shelf. Take look and see, is it 'Made in China'? Coach can be called, at best, a fashion good rather than a luxury good."
2. Calvin Klein Underwear
"...I'm sorry, but overseas [Calvin Klein's] status is barely higher than Baleno (a Chinese mass-market brand -- JD), that is to say, ordinary underwear. Foreigners don't worship CK like people in China do, and won't envy you for wearing CK underwear."
3. Gap
"...[The Gap] and McDonald's are the same, in a short amount of time they had the greatest expansion. Is that clear? McDonald's is the same -- fast food that you buy, scarf down and toss in the trash..."
4. MANGO / MNG
"...[Despite Penelope Cruz appearing in MANGO ads,] this can't change the fact that in Europe MANGO is considered low-priced. When this cheap Spanish brand came to China it was suddenly considered fancy. People here had no idea that if they were on the other side of the ocean, the value of MANGO's clothes would drop 40-60%..."
5. Levi's / Lee / Adidas Original
6. Y-3
7. Vero Moda / ONLY / Jack & Jones
"...[These brands are] very popular among young men and women. How popular? When a girl from some third-tier city (hinting that shoppers from smaller cities are unrefined -- JD) comes to Beijing to go shopping, right away she'll ask her boyfriend, 'which shopping mall has ONLY?!'"
8. Swarovski Crystal
"...Overseas, only people who can't afford natural crystal or diamonds like this kind of 'bling bling' crap."
Characteristics of "Real Luxury"
1. Rarely Discounted
"...They insist that as long as the goods are geniune that there will always be someone willing to pay for it..."
2. Won't Open Big Stores In [Mainland China]
"...Chanel currently only has two stores in China. When people ask why the company has been so slow to expand here, the answer is: China's consumer groups have not yet reached Chanel's high standards..."
3. Seldom Publicized
"It's rare to see television advertisements by "real luxury" brands, and if you do it's just to showcase their products, rather than trying to make a 'hard sell'..."
4. True "Big Brands" Have Haute Couture
"Do you know what Haute Couture is? Custom-made ultra luxury! It's the pinnacle of fashion, created to display the brand's design principles. Production runs are extremely limited, and the price might shock you -- easily well above £100,000!"