China’s luxury brands, a new playbook for global success

The global luxury market is undergoing a transformation that presents challenges for many European and American brands. Increasingly, these brands also face competition from emerging Chinese luxury brands. While Western giants like Louis Vuitton and Chanel have long dominated, Chinese brands are rapidly gaining ground, though not yet at a global scale. With their rapid innovation, cultural sophistication, and deep understanding of client preferences, Chinese luxury brands could grow much faster into global mega brands than Western brands have over the past decades. The speed and scale of Chinese luxury In a recent presentation to my Pepperdine Luxury MBA class, Patrick Kaminski, one of the most successful Western managers in China, called the country an “ecosystem of speed.” In my luxury masterclasses, I frequently remind top management of Western luxury brands that underestimating the client-centricity and speed of action in China is fatal. Chinese brands excel at quickly adapting to evolving consumer expectations. In China, where success is tied to speed and scale, brands like Shang Xia, Qeelin, and Comme Moi are combining traditional craftsmanship with modern design, representing the unique essence of Chinese luxury. Shang Xia blends traditional Chinese craftsmanship with contemporary design, creating high-end furniture and accessories, with boutiques in Hong Kong, Taipei, and Singapore. Qeelin, part of the Kering Group, takes inspiration from Chinese heritage and mythology, offering whimsical yet elegant jewelry. Comme Moi, founded by supermodel Lu Yan, offers fashion for modern women with high-quality materials and contemporary style. From government vehicles to luxury cars Hongqi, China’s oldest automotive brand, is a prime example of speed. The brand has rapidly reinvented itself, shifting focus from producing government vehicles to luxury sedans and SUVs. With rapid expansion into markets like the Middle East and Europe, Hongqi is positioning itself as a premium automotive brand. Chinese luxury wine For those who still believe that the best wines in the world are from France, Italy, California, or Chile, take notice: Ao Yun, a luxury wine produced in the foothills of the Himalayas and owned by LVMH, is gaining recognition for its excellent hand-crafted wines. The unique terroir, similar to Bordeaux, produces high-quality wines that highlight China’s growing potential in the luxury wine sector. While the brand is not yet well-known outside of China, this may change quickly. The shift from 4P to 4E: the new rules of luxury For Chinese luxury brands to become globally relevant, they need to shift from the outdated product-focused 4P marketing model (Product, Price, Place, Promotion) to the client-centric 4E model: Experience, Exclusivity, Engagement, and Emotion. While client-centricity is a particular strength of Chinese companies, many need to focus more on holistic brand building and powerful brand storytelling, as luxury shifts towards creating emotional connections and unique, inspiring experiences. The end of transactional luxury Today, luxury clients see quality and craftsmanship as a given. Therefore, even at an exceptional level, these are no longer enough to appeal to discerning clients worldwide. What truly matters is how a brand makes clients feel. This requires a shift to excellent brand storytelling and a deep understanding of the psychology of luxury purchases. Luxury clients seek emotional inspiration, stories, and personal engagement that resonate with their identity. A recent mystery shopping study conducted by my team in China showed that, despite good service, clients wanted more—specifically, a deeper emotional connection. The strategic advantage Chinese brands have is that they are already exposed to some of the world’s most discerning clients in their home market, where service excellence is expected even from entry-level brands. Chinese brands that can take these lessons in client excellence globally and deliver a brand-specific, highly curated experience will succeed outside of China. Client-centric storytelling: emotion and engagement The future of luxury is tied to emotional connections. Chinese brands (like all brands in today’s reality) need defined stories that outline the role they play in clients’ lives. Since most Western brands still operate with a brand storytelling model that is internally focused (I call it the "we we we" model: “We create the best products, we create the highest quality, we offer the best services,” etc.), those brands that can express themselves through the eyes of the clients will win in the future. Authentic storytelling aligned with clients’ values is key to building strong emotional bonds. Clients also expect a community, including a two-way dialogue with luxury brands. Social media platforms like Instagram, TikTok, and WeChat offer unique opportunities for engagement. Chinese brands, already operating in a more advanced digital ecosystem, have the ability to leverage these platforms to create meaningful conversations with their clients, especially in markets like the U.S. The goal is to build a community where clients feel a sense of belonging. Creating transformative experiences Luxury experiences must be immersive, personalized, and aligned with clients’ passions. For Chinese brands, the opportunity lies in going beyond the ordinary, whether through exclusive events, hyper-personalized service, or creating memorable interactions. This builds emotional connections and enhances brand value. Simply offering what others already do will not suffice. China’s rich cultural heritage is one of its greatest assets in the luxury market. The challenge for Chinese brands is to frame their cultural heritage in a way that makes it relevant and aspirational to global clients. By doing so, they can leverage their unique cultural capital to differentiate themselves from the offerings and experiences of Western competitors in an increasingly homogenous luxury market, where many brands operate in a "sea of sameness." A new playbook for global success Chinese luxury brands have a strong opportunity, fueled by cultural heritage and being rooted in the most competitive market in the world, exposed to a clientele that already demands radical client-centricity. However, to succeed on the global stage, they must shift from a product-centric storytelling and experience approach to one focused on client-centric brand storytelling that inspires the brand experience, client emotions, and all aspects of client engagement. By creating transformative, client-centric experiences, Chinese luxury brands have the potential to redefine the future of global luxury. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders to Watch.” He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others; Daniel holds an MBA and a Ph.D. in luxury management, and has received education from Harvard Business School. Sign up for his masterclasses at the Jing Academy. Follow him: LinkedIn and Instagram. All opinions expressed in the column are his own and do not reflect the official position of Jing Daily.

China’s luxury brands, a new playbook for global success

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Published August 25, 2024

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China’s luxury brands, a new playbook for global success