Shanghai-based APAX Group is capitalising on China's luxury boom. Terence Chu, founder and managing director, thinks that this is because the agency integrates the offline and online experience.
“Most of the time the (online) content originates from offline,” Chu tells CEI. “Compared to other agencies, we are different in a way that no matter how 'luxury' an event is, in the end it’s all about integrating the marketing strategy, CRM, brand experiene and benefiting the online experience.”
The proliferation of pop-up stores by various brands underlines Chu’s conviction that offline experiences surpass what consumers experience online. Yet simple economics—the high cost involved to set up stores on Tmall, for instance—are often what motivate mid-range luxury brands to focus more on events.
Furthermore, the end game is about new user acquisition and loyalty building rather than mere transactions, says Chu. “The online experience encourages fickle behaviour through price comparison, but offline, they compare experiences. This is how we want to approach the market."
While APAX Group’s involvement in high-profile events—the most notable of which includes the 2007 Fendi catwalk on the Great Wall— has helped to elevate its own brand, other plans are brewing from its other revenue streams. The agency ventured into the theme park business through APAX Recreation, its outoor lifestyle experience offshoot. The group launched Discovery Adventures Park in Moganshan last year which offers corporate teambuilding facilities.
“When we think about a new business model, we hope to incorporate a well known IP and develop a new business model as a brand owner, and offer something to our clients,” says Chu, adding that its APAX Recreation unit and the agency’s events business has 80% of crossover clients.
“Part of our growth strategy has been to create a new business model that is related to our existing resources. We work with many brands and sponsorships, as well as developers and the authority, and there are many ways that we can collaborate together for our Discovery brand."
Likewise, the APAX Group is on the lookout to acquire more IPs of shows and agencies beyond China as the company seeks more investment in the future. The agency falls back on its luxury fashion DNA to launch the Shanghai International Fashion Showcase with Shanghai Fashion Week.
“The industry now operates more on the independent model. But for the future, the best way to expand should be similar to the international way, like the other agency network, through merger to increase our market share,” says Chu.