Hans Helmuth Hennig: In Luxury Market, China "Has Made Substantial Progress"

Hennig, Managing Director Of The Jebsen Group In Hong Kong, Discusses Luxury Trends, Developing Consumer Culture In China In the wake of the global economic crisis, many major luxury brands have shifted their focus towards China and the country's growing numbers of luxury consumers. In an interview with the China Times (Chinese), Hans Helmuth Hennig, Managing Director of the Hong Kong-based marketing and distribution organization the Jebsen Group, discusses what it takes for companies around the world to resonate with Chinese consumers and what Chinese luxury brands can do now -- in their infancy -- to become the strong global brands of tomorrow. (Translation by Jing Daily team) China Times : It's been said that since the outbreak of the global financial crisis, Chinese luxury consumers have led the global luxury consumer market. Do you agree with this viewpoint? Hennig : I do agree with that viewpoint. When people buy luxury goods and high fashion, that means that they've satisfied the necessities of life and have disposable income to spare. In addition, purchasing luxury goods also reflects a positive and optimistic view of the future. Since consumers in China are optimistic about the future, they're finding it an opportune time to buy luxury goods. In 2008 and through the first half of 2009, people weren't optimistic about the situation in western economies, but the viewpoint of Chinese consumers toward their future economic situation hasn't changed, so the momentum of the Chinese consumer market is expected to continue there throughout 2010. China Times : What products, specifically, are selling the best in China right now? Hennig : In the last five or six years, we've seen two industries in China expand rather quickly, one of which is the luxury service industry. The other is high-end auto sales. Growth there is really impressive. With China becoming the world's most important auto market, the brands owned by one of our clients, such as Porsche, have seen some great results in China. China Times : China wants to establish Hainan province as an international tourist destination. Since your company has clients who own boating brands, is this an opportunity for you? Hennig : I personally think [the Hainan development plan] is a great idea. To position Hainan in this way is really smart. Because Hainan has advantages that other places in China don't have -- for example it's in the Tropics and the surrounding environment is extraordinarily good, it has good beaches, etc. Of course in this regard I think a great opportunity has opened up for us. I think Hainan has done well so far and will continue its momentum going forward. If the Chinese government continues to promote the development of the yachting industry and works out the relevant rules (for example, how to use boats in Hainan, parking, etc.) we will see an even greater opportunity. ... China Times : Do you have any suggestions for domestic Chinese luxury brands? Hennig : Regarding Chinese brands, I think they're in the same position as Japanese companies were 50 years ago and Korean companies were 20 years ago. They must insist that quality comes first. A low cost strategy is a very interesting and is the kind of strategy that can attract the interest of some people, but ultimately whether a consumer chooses to buy a product or not depends on its quality. China Times : As the new darlings of the luxury industry, Chinese consumers are considered, to some extent, not yet mature. How do you feel about this? Hennig : Several years ago, Chinese consumers were buying high-priced wine, but were putting some sweet mixers in it, for example Sprite -- something that's unimaginable in the West. They were doing this to change the original flavor of the wine. If you're doing this kind of thing, you don't need to purchase such an expensive bottle of red wine, unless you're only doing so to show off. But after a few years, in terms of the sophistication of wine consumers in China, the country has made substantial progress. So another aspect of what we do is to try to bolster brand image in the eyes of consumers to ensure they have a positive image of the brands we work with. The work we do doesn't only include advertising and public relations, but at the same time is meant to ensure the consumer has a positive experience and also shares that experience online. We don't want consumers to think that our companies are something different from what they promise to be. That way, our brands can have a huge impact on the market.

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Hans Helmuth Hennig: In Luxury Market, China "Has Made Substantial Progress"