Week In Review: October 21-25, 2013

In case you missed them the first time around, here are some of Jing Daily’s top posts for the week of October 21-25. How LVMH Adapts To China’s Evolving Luxury Market Chinese model Liu Wen. (Louis Vuitton) Despite discussion that China’s economic growth may be picking up again after several months in slowdown mode, LVMH still posted lower-than-expected sales growth numbers for the third quarter last week that was due in large part to stagnant China numbers. “Growth in mainland China for the group in Q3 was about 5 percent in local currency, which is better than what we had in Q2 but which is in line more or less in line with what we had in the first half of the year,” said LVMH CFO Jean-Jacques Guiony in a conference call last week. CCTV’s Starbucks Attack Backfires As Weibo Users Sound Off After going after Apple earlier this spring, state-run media outlet CCTV set its sights on Starbucks on Sunday with a hard-hitting exposé on an issue that it deemed of crucial importance to the lives of Chinese consumers: latte prices. According to the report, a medium-size latte in Beijing costs roughly one-third more than it does in Chicago in the United States, a price policy that Wang Zhendong, director of the Coffee Association of Shanghai, said on the program was a result of the “blind faith of local consumers in Starbucks and other Western brands.” 4 Challenges Facing Foreign Luxury In China (And What Brands Can Do About Them) As the Chinese state media’s recent attack on Starbucks’ coffee pricing in China demonstrates, the business environment for a foreign company in the country can certainly be tricky. In order to analyze just what the obstacles are for international brands in China, the U.S.-China Business Council recently released a report listing the top 10 challenges for foreign businesses. This list, which includes problems with cost, intellectual property, competition with Chinese companies, and uneven enforcement of laws is meant to cover a wide range of industries, but several items on the list ring uniquely true for luxury companies in particular. What Luxury Can Learn From Starbucks In China A Starbucks in Shanghai. (bitslice cipher/Flickr) There has been a great deal of media attention on Starbucks in China over the past few weeks, stemming from a Wall Street Journal article comparing Starbucks’ pricing in China and the United States and culminating in CCTV’s recent exposé of the American coffee company’s China pricing. Although price differences between China and the rest of the world are a major driver of consumer spending behavior, consumer perception and support for Starbucks has been remarkably resilient in the face of the recent media onslaught and the brand may actually benefit from CCTV’s free PR campaign. Jia Zhangke Endorses ‘Rebellion’ In New Johnnie Walker China Ad Scotch whiskey brand Johnnie Walker garnered mixed reactions when it released a somewhat creepy ad featuring a CGI-animated zombie Bruce Lee this summer, so for its newest video campaign, the Diageo-owned company has opted for some real-life celebrities. In an event at the Shanghai Film Plaza on October 11, the brand released three short films as part of its “Game Changer” campaign featuring Septwolves Chairman Zhou Shaoxiang, MAD Architects founder Ma Yansong, and Cannes Best Screenplay winner and director Jia Zhangke.

Week In Review: October 21-25, 2013

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Published October 25, 2013

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Week In Review: October 21-25, 2013