Jenny Chan 陳詠欣
Oct 27, 2014

Luxury brands of Chinese origin to rule the roost: Added Value

SHANGHAI - Selling luxury in China will require getting 'beyond bling' and connecting with the cultural zeitgeist of Chinese consumers, according to an Added Value report that looks at how luxury brands of Chinese origin are getting cultural innovation right.

Qeelin's 'Mogaoku in Paris' exhibition
Qeelin's 'Mogaoku in Paris' exhibition

Sales of luxury goods are hitting hard times as brands such as Mulberry, Giorgio Armani, Gucci, Prada and Louis Vuitton reported sales decreases impacted largely by falling Chinese demand and tougher competition.

However China is still producing more private-sector millionaires than the rest of the world, so the country is still a focus for luxury retailers. It's just that the tastes of Chinese consumers are rapidly evolving, according to the report.

In its recent luxury study among 600 luxury targets (see infographic below), the firm found that 84 per cent of those surveyed believe that in the future, Chinese luxury brands will be "just as good" as Western luxury brands. Added Value sees "significant growth potential" for luxury brands with Chinese origin.

Openness to Chinese brands is also reflected in attitudes to purchasing, with 22 per cent buying both international and Chinese brands, plus another 51 per cent buying Western first and considering Chinese. This percentage may slowly tip the other way, argues the report.

The parameters of luxury in the eyes of the Chinese consumer are authenticity, customer service and craftsmanship, but Western brands have as their defining elements being "expensive, reflecting the latest trends and [being] exclusive".

Chinese luxury brands differ, with "long history, strong heritage and authenticity" standing out. This further reinforces Added Value's belief that Chinese brands will be increasingly successful in the future.

Here are some of the examples that Added Value cites, and their cultural secrets:

1. Fusing tradition with modernity: Qeelin, by using a qilin (a mythical animal) as its vehicle of communication adopted into digital formats, acknowledges the respect of tradition combined with awareness of contemporary conditions such as female empowerment.

2. Experientialism: Mixmind’s retail spaces provide a multisensory experience where smell, sight and touch are aroused, creating an almost spiritual experience that transcends a normal walk-in shop.

3. Nature branded: The products of Shang Xia use raw natural materials to communicate superior aesthetic and unsurpassable beauty.

4. Idealized representations: The ‘models’ for Shanghai Vive are perfectly and eternally beautiful; they never grow old, promising the ones who use it similar long lasting, dreamy and flawless beauty.

5. Understated minimalism: Moving away from luxury clothing with large logos and shiny surfaces, Mixmind creates products with simple design and almost no branding, communicating luxury for those who know and don’t need to show off.

6. The art of luxury: The K11 mall's shopping environment among artworks creates a sense that the purchases borrow some attributes from the artworks themselves and hence higher emotional and aesthetic value.

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