The modern day Chinese society has revolutionized the luxury industry as the Chinese consumer is receptive to luxury brands unlike any other consumer in the world. As a society that is fueled by Urbanization, with a myriad of cities that are economic centers of the world, China is now a country that has made great strides through industrialization to become an influential leader with purchasing power that transcends beyond gender and age as younger consumers are aspiring for luxury products, in which companies worldwide are marketing their luxury products in order to appeal to the Chinese consumer who is enamored by quality despite cost.
Beyond the depths of Communism, and governmental control the modern Chinese consumer has accessibility to earn higher incomes, provide for their families, enjoy leisure and have amenities that were once rare in a country that was once rural land. Now, with technological advancements and modernization of cities the Chinese consumer is able to live a lifestyle of luxury unlike the past, where luxury was once only possessed by those who were rich.
Through strong family structures, and high educational standards, the middle class in China has gained strength in order to aspire for an improved lifestyle.
China is now the forerunner in the luxury sector with a society that is fueled by productivity, with a growing economy, an increasing population, and a demand for luxury products as those who were not able to attain wealth once before have gained access that was once rarity in the past.
According to the World Luxury Association, China is the world’s second largest luxury market only surpassed by Japan. With 1.3 billion consumers and double-digit growth rates, Chinese consumers were responsible for 1...
... middle of paper ...
...s to the finer things. Niche markets have to be determined in order to reach the Chinese consumer who is unafraid to purchase goods that appeal to the senses, covey status, wealth and higher quality.
According to the Best of the Best Hurun Report, Luxury brands such as Giorgio Armani, Louis Vuitton, Boss, Dunhill, Hermes, Prada, Zenga and Chanel are amongst top favorites for the Chinese consumers in China. Also Jewelry brands such as Cartier, Piaget, Tiffany, Bulgari, Dior and Van Cleef & Arpels have gained market share in China as well as the Chinese are well aware of these brands than ever before (Chadha, 2006).
In China the key consumers are the 700,000 households with assets of more than 1 million dollars. Although the 700,000 households are just 0.2 percent of all households in the country, they control over 48 percent of its wealth (Silverstein,2012).
desire for the opulence of the Chinese silks, gold, perfumes, and other high end products. The
Choose several countries to enter that is suitable for the luxury market and in order to develop the strategy of the company
In 2011 when ASOS entered China, Nick Roberson, the CEO of ASOS decided to consider China as the fifth largest strategic market. In spite of how serious the company took it, it is undeniable that ASOS made mistake on business strategy as well as the reality of embarrassing market position. When ASOS first entered China, they can not understand Chinese market and not be able to see the difference compare to European, American and Australian markets. They should be aware that they were not only opened a huge potential market, but also facing a fierce competition from fast fashion giants like ZARA and H&M which have been running successfully in China for a long time, and at the same time other e-commerce
Before doing business in China, there’s a few things needed to know about this to-be home away from home for the company. A completely different world from that of the United States, this second largest supplier is as simple as our own in business etiquette, and a few simple things can go a long way. Social-cultural, economy, legal-political, and managerial differences are just a few categories of information to be taken into consideration when pursuing a business agenda in China.
As there are many different types of people, different standard of success are existing. High education level could be one of the standards of success for someone and excellent reputation could be other standards. Patriarchal period, which dominated by religion such as Christianity or Catholic, people taught various elements for success in life including morality and ethics. However, Capitalism and its market only focus on property and money so the visible wealthy becomes the only one important element for success. In fact, Hochschild illustrates the study which proves the changing of people’s preference in life. According to Hochschild, “between 1975 and 1991, the role of family in people’s idea of “the good life” declined while the importance of having money increased” (187). In this study, it is proved that having a lot of money is more important than family for the quality of life. In other words, people might be satisfied when they become rich in terms of the successful life. The money is not only productive conclusion for success, but capitalism forces to make people think in this way. For instance, Chua indicates the Chinese parents’ parenting style which might be great example how the capitalism takes important role in family and how it represents in parenting. In Chua’s article, she claims that “the Chinese believe that the best way to protect their children is by preparing them for the future […]” (56). Because of this reason, Chinese parents requires their children to get perfect grades and they cannot accept A minus or B as a children’s academic result. For Chinese parents, having excellent skill might be able to lead their children to successful life in the future. In the view of capitalism, Chinese parents’ parenting styles seems based on capitalism market system. Capitalism market system divide only ‘useful’ and ‘useless’ and its influences
From the 1970s, there has been a wave of liberalization in China, which was introduced by Deng Xiaoping. This is one of the key reasons to the rise of China to be one of the economic giants in the world. In the last 25 years of the century, the Chinese economy has had massive economic growth, which has been 9.5 percent on a yearly basis. This has been of great significance of the country since it quadrupled the gross domestic product (GDP) of the country thus leading to saving of 400 million of their citizens from the threats of poverty. In the late 1970s, China was ranked twentieth in terms of trade volumes in the whole world as well as being predicted to be the world’s top nation concerning trading activities (Kaplan, 53). This further predicted the country to record the highest GDP growth in the whole world.
Kapferer, J., & Bastien, V 2009, The luxury strategy: break the rules of marketing to build luxury brands. London: Kogan Page.
For one, luxury can be defined through good health. For another, luxury can be defined through comfort. To many, luxury is defined through lavish possessions such as cars or jewelry. Regardless of how we perceive luxury, there is a journey behind how we achieve it. Cartier produced an exquisite commercial to celebrate the brand’s history. With the worldwide icon, the leopard, we went through the odyssey of Cartier’s history. The commercial started with a leopard statue of diamonds and jewels coming alive which symbolized the birth of the legacy of Cartier, the start of the odyssey. Then we start watching the leopard visit significant places of Cartier’s history: China, India, and France. All these places are important to the luxury industry. After the journey across different continents, we finally arrive in Paris where Cartier was founded, where
...who have no connection or access to the fashion industry directly, and people who are not interested in fashion even the people from upper class who consider it trivial. Secondly, it can be seen that in ancient China, it was mainly caused by social structure (traditional four classes), conservative cultural atmosphere (specific division of gender’s work) and economic situation (natural economic and agrarian society), trickle-down theory works in a limited range within imperial family indeed. In contemporary China, trickle-down theory works in an untypical way which means trend from the ‘powerful class’ to the ‘weak class’ in China. Thirdly, it was due to historical and sociological problems, that Chinese fashion is basically feminine, even in contemporary fashion. Lastly, the western fashion force is still a dominant power which impacts the Chinese fashion industry.
The social values and history have shaped and formed the economical developments and the current environment of business in the People's Republic of China. They have determined the patterns for negotiation and the Chinese perceptions of business, and their feelings towards westerners. The implicit and explicit rules that the Chinese society has on the development of businesses, and the economy in general, are very important issues for any person going into China to understand and consider. In order to achieve a successful partnership between Chinese and Western cultures it is essential to have a basic understanding of history and cultural developments that have shaped the current environment of business. The three pillars of China are economy, culture, and society.
The high pressure luxury brand industry has evolved over the last few decades from a small and selective to a multibillion dollar arena offering significant potential and growth opportunity for the luxury brands that compete within its realm. With many luxury brands competing for over $225 billion (The Economist, 2009) in revenue each year it is easy to see how strategy plays an important role.
The company’s target market appears to cater to every type of person in the luxury sector. This is reflected with its high class amenities, such as the Michelin restaurants and spas. The Mandarin Oriental International Limited Annual Report 2014 outlined that the leisure travellers have had higher demand recently over business travellers, as well as, “…higher spending leisure customers now making up close to 50% of the Group’s room nights” (Photos.mandarinoriental.com, 2014).
By 2002, Moet Hennessy Louis Vuitton was the world’s largest luxury products company, enjoying annual sales of 12.2 billion euros. LVMH carries the most prestigious brand names in wine, champagne, fashion, jewelry, and perfume. Upon entrance of this luxury product industry, LVMH was aware that they produced products that nobody needed, but that were desired by millions across the world. This desire in some way fulfills a fantasy, making consumers feel as though they must buy it, or else they will not be in the moment, and thus will be left behind.
-Status symbols: Sophisticated customers who value the distinctive, exclusive collection seem to value the corporate-branded version of luxury. –Philip Martiz, chairman of the board
“Despite worldwide softness in the sale of luxury goods, LVMH has cemented its position as the world’s largest and most profitable player in the category. To stay there it must keep its customers loyal and its brand strong and find new markets worldwide” (Hazlett C. 2004). That is why in its mission they state to represent the most refined qualities of Western “ art de vivre” all around the world. Their objective is to be the leader in the luxury market, continuing to transmit elegance and creativity. This poses some major challenges, the main one is to keep being the leader in the luxury market through a sustainable growth. The main problem to achieve it is the high dependency on three main countries, France, Japan and USA. This becomes a threat because if there is an economic downturn in one country it affects LVMH directly that is why.