In the past two weeks Armani and Burberry have announced strong growth figures in China, despite the slowdown in luxury the country, but their sources of success were not the same. While the pivot Armani second and third tier cities, as an important factor in its profit gains 39 percent have been cited, the growth of Burberry has been attributed to demand been, in large centers such as Hong Kong and Shanghai after the company has a more upscale approach to promoting . Meanwhile, when Louis Vuitton LVMH owner disappointing figures reported this year, said CEO Bernard Arnault, despite an earlier rise in second-tier cities, Louis Vuitton is to prevent its expansion in the lower class "slow down too much on the agenda . "
Sure, a growing number of fashion brands on the market opportunity across Beijing, Shanghai and Guangzhou in the second and third level places in China, the search is expected to see the fastest growth rates in China in the coming years.
It is difficult to exaggerate the importance of the retail markets at approximately 460 seconds, and the third largest population centers of China. The Boston Consulting Group predicted that both asset accumulation and consumption in these places that surpass of the first level in the coming years. More than half of the country's economic growth should, 60 percent of these cities come until 2020, while 80 percent of the country come to market in the medium to high-priced fashion there. Significantly, foreign policy, "75 most dynamic cities in 2025", 29 in China.
In fact, in the not too distant future, the ability of consumers in these cities is luxury companies also gain important growth in China, as growth in China has to be its total global sales. Despite the numbers, and the fact that the second floor has helped some businesses beat the downturn, some high-end brands like Louis Vuitton, Chanel, Dior and stuck with or switched to a more conservative model of development. Chanel, the opening of stores in second-tier cities began only two years ago, hopes to "remain exclusive" because "it strategically not be everywhere," said Global CEO Maureen Chiquet, the company said in January.
To be sure, the lower tier retail expansion is not without challenges, including real estate issues, logistical difficulties and different habits. In contrast to the hustle and bustle of commercial real estate in urban centers such as Shanghai and Beijing, many lower-tier cities are actually a glut faced building downtown, with high vacancy rates should brands be discouraged until they can guarantee that the situation will develop . The average vacancy rate of shopping centers in second-tier cities is currently 10.5 percent, and much higher in some cities such as Shenyang, where the rate of 17 percent. Moreover, despite population growth in these cities have not been described in detail about the forces working upscale luxury to leave traces carefully diluting their images with poor service.
Another challenge is different and unknown behavior of consumers. Several recent studies have shown that consumption patterns in the lower levels do not correspond with those in larger cities, and different strategies are necessary for brands to be successful. Specifically, research has found that buyers tend to be more impulsive of the second rank, more visible and less brand-conscious as the first line.
According to a study in mid-May by the advertising agency Publicis Groupe, which is a group of people who at least $ 10,000 per year to spend on luxury consumers in second-tier cities surveyed published yet in the interest buy "luxury obviously" in the form of logos and shrill as the first heavy focus speed on the sophistication and quality elements. Practices donations were found to remain in the second-tier cities high, with 40 percent of respondents said they had been luxury goods as gifts to employees or acquaintances. Brands celebrities sheet for approval at major events in Shanghai or Beijing might also note that more respondents in the second tranche said she would be willing to make a purchase if the product has been approved by a famous person.
These properties of the second-tier cities are not without benefits, they are not very different from those facing the first luxury brands to enter the big cities. Consumers who may have less knowledge about the brand serve as a "clean slate" for companies to raise awareness of the heritage of the label and real estate is cheaper and easier to find than in larger areas. The input of these early cities also avoids the risk of the market is saturated before any branded a challenge facing many companies can impose in the top group. In addition, two small Chinese and foreign brands more leeway in these cities with less competition from the giants of world fashion.
The labels remain vigilant to identify the right time to expand to the lower levels, the rapid growth of e-commerce market in China remains an alternative always popular brick and mortar stores. According to a study by Ogilvy & Mather China conducted online purchase options are important in areas where luxury products are not yet commercially available. Although consumers go to these cities in the first stage to make purchases, is the speed at which it is growing its e-commerce. E-commerce is not always a perfect alternative in the short term, however, because a different set of logistical problems make e-tail in China, with the assurance of quality and reliability count significantly in the provision of luxury goods for wealthy Chinese clients with high expectations .
This complicated field does not enter the market the second, third or fourth level, or plans to do so prevented in the future. And even the more conservative brands, it is not a question of "if" but "when" - and more importantly, "how". Despite a Tier One strong growth of Burberry, the brand is far from absent from the second level and still wants 25 new stores in China in 2014. The challenges, however, are numerous: you must enter before the market becomes saturated, but not too far, they will have opportunities for consumer appeal remarkable small towns without alienating clients craft based in larger towns to find and they must clear digital marketing strategies and e-commerce, while educating consumers and maintaining a strong sense of the heritage of the brand. Although a good expansion strategy is certainly to be a balancing act, the long-term gain is so high that the challenges do not keep the luxury brands of the lower-tier cities in China for a long time.
没有评论:
发表评论