The icon of private clubs, M1NT, will open its doors in Hong Kong this fall. M1NT possesses everything important to customers at this level — a private catamaran, limousine services, secret VIP rooms.
Like a Fortune 500 company, M1NT's invitation-only shareholders will own the club — an immediate, personal connection between the brand and its customers. For Asia's wealthy niche, it's a brand experience worth its hefty price tag.
Indeed, Asia's super-rich are in search of something new as once-prestige brands become so widely affordable that luxury labels themselves are battling to differentiate truly luxury items.
"Everyone wants to own their own club, bar or restaurant," explains M1NT founder and CEO Alistair Paton. "Being a M1NT shareholder is a grade above that and what everyone aspires to be. It's all about the delivery and customer satisfaction. At the level we play at, which is the top, there are no sacrifices."
And, more consumers in Asia-Pacific not only want to join in the game, but are able to do so.
"What I think is interesting is the profile of the Asian affluent that is emerging through the years," says Doris Ho, director of Hong Kong's Sprout Brands. "On the one hand, the working class in developed markets like Japan, Hong Kong and Singapore are getting rich and the already wealthy in these markets are getting richer.
"On the other hand, you have a potentially huge market of new rich emerging from less traditional markets like China and India which cannot be ignored."
According to American Express' 2005 study — Inside the Affluent Space in Asia— 42 million people are considered the mass affluent with liquid assets between US$50,000 and $300,000, and this figure is projected to rise to almost 48 million by 2008. Individuals with more than $300,000 in liquid assets number more than five million and are expected to increase over a million by 2008.
The emergence of the middle-class in China and India, coupled with soaring new levels of wealth reached by the already-rich, is forcing luxury brands to reassess their marketing strategies and interest both groups at the same time yet in different ways.
However, as strategies segregate, the definition of luxury is becoming blurred. If more people can get their hands on an exclusive brand, is it still exclusive?
"That is the dilemma," explains Dave McCaughan, executive vice-president, director, strategic planning, McCann Erickson Japan. "Luxury is so personal now that it has become too difficult to define. If suddenly a new mass can afford a luxury brand, is it still a luxury for those that could already afford it?"
It is, but only under one condition. "Brands must stay true to what is fundamental to their message," says Andrew Thomas, managing director of Ogilvy PR Worldwide in Singapore. "Good brands are not led by fads, and they always keep to the original integrity of the brand."
As a result, it has now become more appropriate to tier premium products between those at the top-end of the average consumer's spending power and those that appeal only to the super-rich. "It is important that as brands widen their target consumer catchment, they do not deteriorate in image and quality. Brands have to be smarter as there is considerably more competition in this market," notes Helen Willerton, managing director, Chloé Asia-Pacific.
As a result, brands are also reinventing themselves to keep this fickle group of consumers interested.
Jimmy Choo is widely known as a label that makes beautifully-crafted and expensive, shoes. It entered the handbag market, extending its brand while maintaining the fundamental brand feature of using superior quality leather.
Mila, a maker of high-end kitchen appliances, is known for its bold colours and eccentric designs; however, the brand capitalises on macro-trends such as using titanium in a line of products. Macro-trends allow brands to take part in the trend of the moment and also lend themselves nicely to limited-edition products.
"Customers are smart," explains Thomas. "They will pay high prices because of the extra labour going into an original product line, not simply because the brand is using 'limited edition' as a marketing ploy."
For the luxury consumer, what's important is the relationship with a brand. High-spending consumers seek an experience from the moment they hear of the brand to the point of purchase. The service they get, the knowledge of the salespeople, the store environment and its product range is almost more important than simply buying the product and wearing it.
Which makes it essential for brands to connect to their customers on a personal level. Take Ralph Lauren — the company has opened its flagship store in Tokyo this year. "The building is a hallmark of the Ralph Lauren brand experience," says Ho. "Every detail is carefully considered down to the huge floral displays."
Hand-applied Venetian plaster walls, Ottoman limestone columns and one-of-a-kind antique pieces illustrate the brand story on a lifestyle level. There is also a VIP floor where the super wealthy can receive extra personal attention while shopping. It's also the only store in Asia to carry RL's exclusive Black Line and the only location globally where consumers can purchase an orange 'Ricky' bag.
"Consumers are expecting excellent service more and more as they spend their money," says Willerton. "If they do not get it, they will go to the next brand. There is a lot less loyalty as the luxury market expands."
However, less loyalty does not necessarily mean customers look at brand competition the same way marketers do. The Bvlgari Resort Bali, which opens at the end of the year, will bring together a luxurious jewellery brand with the Luxury Group, which manages the Ritz Carlton Group, for the opening of a small group of hotels and resorts in key cities and resort destinations.
"What it has helped the Bvlgari brand do is move into a more lifestyle arena, and also demonstrate on a more visual platform, Bvlgari's definition of luxury," Ho adds.
Willerton, however, warns that this type of crossover may sometimes do more harm than good. "I think we will see elite luxury brands moving away from this in order to protect their exclusivity."
But marry 'exclusive' with 'personal' and you have a high-end match.
Cash-rich consumers want a product they feel is made just for them and they are willing to pay for it. Rolls- Royce, for instance, provides 'personal' service as opposed to 'personalised' service for owners and potential new car purchasers. "I used to handle a very expensive Swiss watch brand that I had never heard of, because it was so exclusive. I soon noticed a friend of mine owned one," says McCaughan.
"When I asked him how he knew about it when I had never seen an ad for it, he laughed and said, 'If there was an ad for it, I wouldn't buy it'."
For high-end labels what sells is word-of-mouth, VIP PR events and sponsorships that work in the same way by exposing a small set of consumers to the product, yet staying under the radar of the masses. Traditional advertising is just so mass.
American Express, for example, shunned above-the-line advertising to promote its ultimate status symbol, the black Centurion card.
Rather than target a large number of consumers, the credit card was promoted to an A-list group through a subtle direct marketing campaign.
With privileges such as arranging after-hours shopping at Valentino, the card's customers have access to brand experiences that the masses don't. They are where they want to be — one step ahead.
