Building a new customer base as tastes evolve – major challenge in China for luxury
Gildo Zegna, CEO of luxury menswear giant Ermenegildo Zegna , said at the recently held International New York Times South East Asia Luxury Conference that one of the biggest challenges in China is building a new customer base as tastes evolve. “What is key is for brands to first establish as many aficionados as possible, before opening up lots of stores in a country. Brands need to plan ahead.” He pointed to the example of Zegna’s expansion in India, “I think we’ve been too quick and too many cities outside Bombay…it didn’t work out. My belief is, master the major cities, become an established brand and then move. But take it step-by-step.” he advised.
Until recently, wealthy Chinese were known for preferring designer brands with prominent logos, to prove they had the money to afford them. But now they are increasingly shunning flashiness and overt displays of wealth. “I even see people removing the label from the inside of their jacket as a way of making it more anonymous,” said Jing Ulrich, managing director and vice president of Asia-Pacific at JP Morgan, and one of Asia’s most respected bankers. ”The Chinese consumer is now demanding, knowledgeable, savvy, sophisticated and also very price-conscious. There is sensitivity around appearing too ostentatious. Brands must be aware of this.”