For all its hype as the promised land for global luxury brands, Asian agencies have appeared a little slow to capitalise on the opportunities afforded by the category. But perhaps not anymore, with the news that IPG has launched specialist luxury marketing agency Luxury Box in Shanghai.
The mainland placement marks only the fifth Luxury Box office in the world, after London, Paris, Milan and New York City, primarily launched to service McCann’s newest account, Cadillac, and China-hungry Tiffany & Co.
In China, rampant piracy hasn’t hindered domestic appetite for real luxury goods one bit: China accounted for 11 per cent of the world’s luxury goods market last year, and Goldman Sachs predicts this to exceed 29 per cent by 2015, turning China into the world’s number one luxury market.
“We expect change in the way China is rapidly inviting luxury. Why doesn’t Prada have a Chinese collection? That fusion design can be an interesting for the rest of the world, and we believe this will happen very soon,” says Pratik Thakar, McCann’s China-based EVP and chief planning officer. He says a key proposition of Luxury Box is proprietary insight into Chinese luxury culture.
Historically, luxury clients out East farm out adaptation and execution of global creative to ‘regular’ ad agencies. “Most luxury marketing is kept in-house because it is a very private, very competitive industry. Things must be planned a year in advance,” says Hugh Kwan, a professor of retail management at Ngee Ann Polytechnic in Singapore and former manager of Club 21’s Calvin Klein operations in Singapore and Hong Kong.
Gavin Heron, group CEO of TBWAChina says that for the ‘super high-end’ luxury brands such as Cartier and Christian Dior, which his agency services, the advertising creatives are tightly controlled. “In fact, the ads are usually created by the actual design director,” he says. “For instance, Tom Ford would do his own branding.”
But Garina Tan, communications manager of Jaeger-LeCoultre Southeast Asia, says a specialist luxury marketing shop has much to offer. “It’s good that the agency recognises that luxury is a niche market, that not everyone understands how to manage it.”
Heron concedes a need for a luxury events team which TBWA China operates under a subsidiary called Auditoire. “On top of advertising, which is usually absorbed from headquarters, most luxury marketing is done through VIP and PR events that talk directly with their VIP clients,” says Heron.
Aliana Ho, SVP of marketing for the Venetian Macau, thinks a consolidated effort like Luxury Box is long overdue. “The China market is so dynamic. The more information we can collect about trends, behaviour, net-worth and so on, the better it will be for the development of all luxury brands,” she says.
But how is this different from what a ‘regular’ agency offers? After all, luxury marketing expertise hasn’t always created magic. Last year, the Shangri-La Resorts hired BETC, Euro RSCG’s highly-decorated luxury marketing group in Paris, for a global brief. But the union dissolved within months, and the brief eventually went to Shangri La’s incumbent, TBWA.
Heron agrees that an agency can handle luxury and lifestyle clients without a formal separation from other category advertising. “Most luxury brands have a very singular view of themselves. To a large extent, they are the first global brands in the world,” he says.
