Four nuggets of advice from luxury brands that have successfully navigated China’s fierce market:

shanghaitang1. Patience

Ermenegildo Zegna was the first luxury men’s brand to open a fully owned and operated menswear store in China (Beijing 1991).  The company now has 70 stores and China is now the largest and most profitable market in the world for the company.  But it wasn’t always that way. Zegna started small, endured slow sales, lost money, invested heavily in brand building and education, and most important of all- expanded incrementally. It took 20 years to go from one store to 70.  That is not the model all luxury brands need to follow, but the lesson is clear: learn the market, make mistakes, regroup, expand incrementally, and have the patience of a Zegna, and you are one-fourth of the way to success. With a solid foundation like Zegna’s, a luxury brand can weather the ups and downs of the Chinese luxury market.

2. Have a Great History, Compelling Story, and Authentic Heritage

A great story can and often does start with a great visionary and founder—someone who sets the tone for a company’s quality and values for 100 years or more—think of Coco Chanel, Enzo Ferrari, Louis Comfort Tiffany, or Mario Prada. The great luxury story can also be associated with a city or region (Swiss watches, French wines, American cosmetics), or simply the story and history of a great product.  Chinese luxury consumers place a premium on authenticity and history, and successful luxury brands in China have genuine and interesting histories and stories to tell in one of more of these categories.

3. Excellent Communication

Having a noted founder, a great story, and a long history are meaningless if you cannot effectively communicate these assets to your audience and if you do not know which audiences you are communication with.

China is not a monolithic single “market,” nor are Chinese luxury consumers a heterogeneous group of buyers reading, watching, and absorbing the same media. Understanding the  main groups of luxury buyers in China and where and how to tell your story to them is the third thing successful luxury brands have in common.

4. To Change or Not to Change? That is the Question

Perhaps one of the most difficult balancing acts in branding and selling luxury goods in China is understanding when and if you should begin producing marketing, messaging, and products with a more distinctly Chinese look, feel, and focus, and when and if you should add lines or products in the accessible luxury categories.

Successful luxury brands in China have a good sense of whether they should stick to their guns and continue to put their exclusivity and traditional messaging front and center and to not alter their product lines for a Chinese demographic at all. Some good examples include Ferrari, BMW, Chateau Lafitte, Louis Vuitton, Rolex, Michael Kors, and again, Zegna.

Others have as good an instinct as to when to make these changes/additions. Estée Lauder introduced a luxury line of cosmetics just for the Chinese market. General Motors plan on introducing “Chinafied” Cadillacs to overcome a tepid response to their current U.S.-styled Caddies.

Full article from the Jing Daily here.

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