Global Luxury Trends – Innovative Strategies for Emerging Markets
CPP-LUXURY.COM has recently reviewed an exceptional book entitled Global Luxury Trends – Innovative Strategies for Emerging Markets by Jonas Hoffmann and Ivan Coste-Maniere (Palgrave Macmillan) Here are some of the key findings and insights which the book presents, with the aim for helping luxury companies understand emerging markets.
Given that most luxury consumers in emerging markets are young, the importance of speed and change is likely to keep accelerating. A fundamental tension remains in the short-term construction of luxury brand equity. Since luxury brands and companies are built to last for generations, there should be a long-term view in how companies are managed. Failure is nevertheless a possibility, as demonstrated by Christian Lacroix or brands that opted for short-term licensing strategies and lost their luxury status, like Calvin Klein or Pierre Cardin.
The emergence of global Chinese luxury brands
Given the recency of the market economy in China and even more of the luxury market, there is room to frame client desires and luxury expectations in a sort of market ”education”. Hence the effort engaged in by Chanel, Louis Vuiiton, Cartier, Hermes and other to present their long heritage of craftsmanship, ”savoir faire” innovation and exclusivity in China.
Historically, merchants from Europe had long crossed Asia to trade Chinese silk, creating what came to be known as the Silk Road. China has been an econokmic superpoer for most of its history and this opulence has given birth to numerous refined crafts: silk, tea, porcelaine, jade, bamboo, tailoring, tea and liquors, to name but a few.
Several Chinese brands exemplify this oreientation Moutai liquor has a hostory dating back many centuries…priced at more than US$ 200 a bottle, it is exported the world over. Jewellery is another field of choice where brands like CJewelry create luxury pieces inspired by traditional Chinese crafts. The most representative example is probably that of Shnag Xia, created by Chinese designer Ms Jiang Qiong Er with the support of Hermes, opening its first store in 2010.
”Looking to the present” value propositions are grounded in contemporary China, building bridges, between East ad West and focusing on luxury lifestyles. The overseas expansion of Mandarin Oriental luxury hotels bears witness. Created in Hong Kong in 1994, Shanghai Tang…pioneers luxury Chinese lifestyle, ”global ambassador of contemporary Chinese chic”. There is an opportunity for Chinese luxury players to accelerate their international expansion (and at the same time overcome legitimacy issues) by developing ”looking to the future” value propositions. This can be done by companies that propose a viable future view for a certain luxury category, reframing the meanings associated with a certain luxury product.
How can this be done? – using technological developments (e.g. new materials). Another way is to draw inspiration from the arts scene. Louis Vuitton has mastered co-signing collections with artists, and Germain porcelaine-maker Meisse is also on this track.
Luxo Brasil and Osklen’s new luxury
Among other characteristic traits of Brazilian luxury consumers are the following:
- Brazilians love credit and even those who can afford to pay upfront prefer to pay through instalment plans
- Clients are ready to pay the price: given the taxes and imports cost, the price is often double that found in the U.S. or Europe. That makes for nice profit margins for retailers (…) In Miami, Brazilians are kindly referred to as ”Walking Stimulus Packages”
- Service is fundamental. Throughout their history, Brazilian elites have been able to afford full time mids and servants (…)
Given Sao Paulo’s constant traffic jams, helicopters are a must of the HNWI Brazilians…the city has one of the world’s largest private helicopter fleet in the world.
Engaging with the luxury consumer in China
The luxury sector in China has gradually moved from being perceived as a fairly restricted, elitist dream based on design creativity, to a massive economic sector with sharp retailing skills. The development of self, via self-construal through brand identification and consumption, is not new.
Driving an international marketing strategy that produces global sales while protecting the notion of exclusivity and establishing culturally resonant customer engagement remains one of the strategic challenges of this decade for luxury brands. The new luxury consumer is much younger, more discerning without being particularly loyal, and with a high disposable income. Gone are the days of an elitist hierrachical relationship between the brand and the consumer. Nowadays, the luxury consumer sees himself at the heart of the marketing process, seeking an authentic experiential connection with the brand..
The Chinese luxury netizen
The online behaviour of this young, luxury consumer shows and informed but protracted and drawn out approach to the purchase decision process. Information research and evaluation may take as long as 2 to 3 months before the purchase is actually made. They want the best that their money can buy and which reflects their own personality and individuality. Online is the principal source of this research.
Identifying brand communities, based on a structured set of social relationship, is a structure which includes shared rituals, traditions and a collective moral conscience that provides cohesion to this group (…).
The use of online and social media as a strategic tool in luxury brands marketing cannot be ignored. A convergence between the luxury development of online and an increasingly youthful luxury consumer provides valuable strategic opportunities for luxury brands to leverage and enhance brand value via these new touch points.
Luxury consumer tribes in Asia: Insights from South Korea
The tribes we are interested in, are naturally occuring groups where: tribe members identify with one another; they have shared experiences and emotions; and they are capable of engaging in collective social action, that is, together, members of the tribe and ”do” things that they would be incapable of doing outside the collective.
Developing brand comunities is today considered a central topic of brand management.
Sharing luxury emotions through offline events
Along with the consuming action of luxury brands, an emphasis on the importance of appearance and dress is needed, as well as the creation of an atmosphere in which high quality life, refined preference and high-class lifestyle could be exhalted. For this, through ”re-enchantement” of luxury brands, consumers and enthusiats should consider luxury items as something with which they could experience a better life, and which could satisfy their desires of life condition and quality improvement in various styles.
Second part to be published 21st February, 2013