Chapter(Four(–(Distribution(Channels(of(Luxury(Brands(in(China(
063 064 076 084
Chapter(Five(–(Promotion(of(Luxury(Brands(in(China(
094 095 105
Chapter(Six(–(Customer(Relationship(Management(for(Luxury(Brands(in(China!
111 112 114 121
Chapter(Seven(–(A(Long(Way(to(Go(for(Chinese(Local(Luxury(Brands!
123 124 125 126
Fortune(Character(Lists
129
Appendix(
130
About(us(
137
Foreword
Deeper In China
001
1.(Sinification(of(Brand(Building International(luxury(brands(are(now(either( acquiring(or(merging(with(Chinese(brands,( or( they( are( launching( subsidiaries( or( products(with(Chinese(elements. Chinese(capital(has(started(to(enter( international(luxury(brand’s(board(of( directors,(acquisition(is(prevailing
Chinese(luxury(brands( are(gradually( earning(its(place(in(the(competition
The ( lar ge s t ( f la g ship ( s t or e s ( o f( numerous(international(luxury(brands( are(opened(in(China
002
2.(Designing(for(China Forming( Chinese( design( teams( or( cooperating( with( Chinese( designers( and(artists
3.(Manufacturing(in(China Establishing( a( factory( in( China( or( choosing(a(Chinese(OEM
Fully( adopting( Chinese( elements( in(design
Sourcing(raw( materials( from( China,( par ticularly ( those ( with( int ense( Chinese(elements
Chinese( luxury( brands( with( strong( Chinese( design( elements( are( now( being(widely(recognized
003
4.(Distribution(in(China Building( their ( o wn( distribution( channels(and(reducing(or(getting(rid( of(Chinese(agencies
More(international(luxury(brands(are( creating( their( Chinese( versions( of( eVcommerce(sites
Store( penetration( in( second( and( thirdVtier( cities,( while( some( luxury( brands(build(stores(in(nonVCBD(areas
Starting( to( cooperate( with( Chinese( logistics( provider s,( while( some( consider ( establishing( their ( own( logistics(and(distribution(system
004
6.(Communications(in(China 5.(Service(in(China Shifting(from(reliance(on(international(to( Establishing(independent(service(centers( globally( and(launching( special( services( especially(for(Chinese(customers
Increasing( service( agencies( and( customer( service( teams,( greater( focus(is(now(given(to(the(training(of( professional(service(staffs
005
titles(targeting(the(Chinese(wealthy
!
Shif ting( from( sole( dependence( on( international( advertising( and( public( relations( (PR)( agencies( to( gradually(building(trust(with(Chinese( Establishing(professional(publications( a d v e r t i sin g ( a n d ( P R ( a g e n c i e sZ(
for( the( Chinese( market,(primarily(in(
Beginning(to(fully(leverage(the(local(
the(form(of(internal(magazine
advantages( of( Chinese( advertising( and(PR(agencies
Transitioning(from(using(international( spokespersons( to( more( Chinese( spokespersons
Emphasizing( communications( in( cir cles,( paying( at tention( to( the( impact( of( key( opinion( leaders( and( hosting( more( activities( for( Chinese( wealthy(groups.
006
7.(Teams(in(China Professional( Chinese( managers( are( more(involved(in(senior(management( level(of(international(luxury(brands,(this( is(particularly(common(in(China(region
Emphasizing( consumer ( training,( more(brands( are(providing( Chinese( customers( with( information( about( their(products(as(well(as(culture(and( lifestyle(activities
Ma s t er y ( o f ( Mandar in ( b e c ome s( luxury( brands’( prerequisite( for( foreign(employees
International( luxur y ( brands( ar e( starting( to( pay( more( attention( to( cultivating( their( Chinese( team,( with( some( brands( placing( significant(
007
e f f o r t s ( in ( b uil din g ( t h e ir ( o w n( meetings(in(China,(especially(some( marketing(meetings professional(training(schools
8.(Management(in(China A(clear(trend(in(the(market:(more(and( more(luxury(brands( are(choosing( to( move(their(AsiaVPacific(headquarters( and( managerial( decisionVmaking( powers(from(Hong(Kong(to(Shanghai
International( luxur y ( br ands( ar e( tending(to(hold(global(management(
008
Chapter One
2012 Global Luxury Market 009
1.(Despite(slowdown,( the(market(is(still(rapidly(expanding
2.(Eminent(advantage( growing(in(groups,( discrepancy(in(performance
010
6.Global(development(strategy( shifts(east(
3.Luxury(industry(is( mingling(with(fashion
5.(Continuous(extension(of( product(chains,(highlighting( diversification(strategy
4.(Ridding(the(family(brand
011
012
Chapter Two
Luxury Map in China 013
Section(One:( Current(storefront(situation( for(international(luxury(brands(in(China
0"#"20"""""less"#"saturated 20"#"50"""modest"#"saturated 50"#100""saturated 100"#"+"""highly"#"saturated
014
Rank
City
Index
Rank
City
Per/Capita/Retail/Sales/ of/Consumers/Goods （Unit：RMB/10/Thousand）
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Hong/Kong Beijing Shanghai Macau Shenyang Shenzen Dalian Hangzhou Guangzhou Chengdu Harbin Kunming Tianjin Qingdao Suzhou Chongqing Nanjing Taiyuan Xian Wuhan Wenzhou Ningbo Changsha Xiamen Changchun Zhengzhou Wuxi Urumqi Sanya Jinan
98.8 39.6 39 21.8 13.8 12.4 11.6 11 10.2 10 8.8 8.2 8 7.8 7.2 7 6.6 5.8 5.6 5.6 5.2 4.8 4.4 4.4 4.2 4 3.6 3.4 3.4 3
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Hangzhou Shanghai Shenzhen Chongqing Wuxi Hohhot Shenyang Xi'an Xiamen Nanning Beijing Dalian Canton Nanjing Changsha Jinan Fuzhou Tianjin Qingdao Taiyuan Wuhan Ningbo Changchun Urumqi Changzhou Chengdu Kunming Zhengzhou Harbin Wenzhou
4.1 3.5 3.4 3.3 3.3 3.1 3 3 3 3 2.9 2.9 2.9 2.7 2.7 2.7 2.7 2.6 2.6 2.3 2.3 2.3 2.3 2.2 2.2 2 2 2 1.9 1.9
Data/Source:/Fortune/Character/Group/ Fortune/Character/Institute/analyzes/and/ models/main/indicators/of/luxury/storefront/ distribution,local/economic/development,/ total/consumption,/wealthy/population/to/ obtain/the/above/figures./All/the/data/are/ derived/from/public/information.
015
Data/Source:/Fortune/Character/Group/ Fortune/Character/Institute/generated/the/figures/ from/total/retail/sales/of/consumer/goods/and/ resident/population/of/each/city.
Low(saturation(of(luxury(storefront( in(most(cities(allowing(huge(room( for(development
When(entering(China,(international( luxury( brands’( first( storefront( choices(are(in(Beijing(and(Shanghai Setup ( in( f ir stV tier ( mark et s ( ar e( formed,( while( secondVtier( cities( T hir dV t i e r ( c i t i e s ( a r e ( gr a du a ll y( developing(and(fourthVtier(cities(are( in(the(planning(and(testing(stage
016
The( number( of( luxury( stores( is( closely(related(to(local(commercial( real(estate(development
The( purpose( of( opening( stores( in( second( and( thirdVtier( cities( is( to( satisfy( local( consumption( needs( and( provide( brand( experiences,( as( well( as( to( strengthen( local( customer(service(capacity
L a n d m a r k ( b r a n d s ( l e a d ( t r e n d s( whereas( the( “cluster( effect“( is( common( among( luxury( brands( that(follow(the(leading(trend
017
Shanghai:( Dalian:(
Beijing:! Hangzhou:(
Guangzhou:(
Shenyang:(
Shenzhen:(
Chengdu:(
018
Suzhou:
Harbin:
Kunming:
Chongqing:(
Tianjin:( Nanjing:!
Qingdao:(
Taiyuan:!
019
Wuxi:( Ningbo:(
Urumqi:( Changsha:( Xi’an:(
!!!!!
Xiamen:
Sanya: (
Wuhan:( Changchun:(
!
Zhengzhou:( Wenzhou:(
J i n a n: !
!
020
Section(Two:( Urban(development(for(different(categories( of(luxury(goods 1.(Fashion(brands
0"#"20""""""less"#"saturated 20"#"50""""modest"#"saturated 50"#100"""saturated 100"#"+""""highly"#"saturated
021
2.(Watch(and(jewelry(brands
0"#"20""""""less"#"saturated 20"#"50""""modest"#"saturated 50"#"100""saturated 100"#"+""""highly"#"saturated
022
3.(Luxury(car(brands
!
0"#"20""""""less"#"saturated 20"#"50""""modest"#"saturated 50"#"100""saturated 100"#"+""""highly"#"saturated
023
024
4.(Yacht(industry
0"#"20""""""less"#"saturated 20"#"50""""modest"#"saturated 50"#"100""saturated 100"#"+""""highly"#"saturated
025
026
Section(Three:( Decrease(of(sales(for(international(luxury(brands( in(2/3(V(tier(cities
Troubles(with(penetrating(brand(recognition
Troubles(with(expanding(consumer(trust
Troubles(with(enhancing(brand(impact
027
Troubles(with(strengthening(sales(channel
!!!!!!!!
Troubles(with(maintaining(brand(service
Troubles(with(reinforcing(communication(channels
028
029
Chapter Three
Luxury Lifestyle in China
030
Section(One:( Characteristics(of(the(wealthy( population(in(China The(wealthy(Chinese(population(are(creating(positive(impacts !
China(Has(a(Wealthy(Population(of(1.4(Million(
Wealthy(Population(in(China(are( Younger,(Primarily(35(to(45(Years(Old
1.4+Million
with+assets+over+
10+million+RMB
0.08+Million
with+assets+over+
100+million+RMB
High+net+worth+individuals+ with+assets+over+100+million+ RMB+are+over+0.08+million+
High+net+worth+individuals+with+ assets+over+10+million+RMB+ have+reached+1.4+million
MaleVDominated Female
25.4%
Male
74.6%
031
18%
Above+55
35%
45.55+yo
40%
35.45+yo
7%
20.35+yo
Dominated(by(males
Relatively(younger(in(age
“Family(fortune�(trait
Bucking(the(geographical(concentration
032
Outflow(of(Chinese(Fortune
67%
14%
67%$of$Chinese$billion/ aires$own$overseas$assets$ or$have$family$members$ holding$foreign$passports$
14%$of$Chinese$wealthy$ own$assets$overseas$or$ have$family$members$ holding$foreign$passports
Priority(given(to(personal(consumption,(with(more(focus(on(lifestyle(quality
033
Consumption(of(the(Wealthy(Chinese(Population(are(Mainly( on(Luxury(Goods(and(Children’s(Education
35%
35%
30%
26%
25%
18%
20%
17%
Luxury&Consumption
15%
4%
10% 5%
Children’s&Education&&&&&& Healthcare Vacation Other
0%
Luxury& Children’s& Consumption Education
Healthcare Vacation
Other
Whether(Rich(Chinese(are(Considering(
Their(Major(Reasons(for(Buying(Real(Estates(
Buying(Real(Estates(Overseas
Overseas(are(Children's(Education
Other Immigration
Undetermined
21%
12%
2%
Considering
67%
Investment
15% Not+Considering
Children’s+ Education
51%
12% Vacation
20%
034
Section(Two:( Consumption(trends(of(Chinese(wealthy
1.( With( the( temporary( setback( of( consumer( confidence( on( luxury(products,(future(demand(remains(inelastic
The(Richer(the(Consumer(is, the(Firmer(the(Demand(for(Luxury(Consumption(Becomes
Unit0RMB
43%
Over0100 million
38%
50090100 million 1009050 million
25%
29%
23%
32%
20%
23% 18%
3% 16%
30% Increase
Less0than010 million
23%
21%
Flat Uncertain
37%
Decrease 0% 10%
035
19%
20%
30%
40%
50%
60%
70%
80%
90%
100%
036
2.(Luxury(consumption(desire(curve(surfacing,(lowVasset(crowd( have(strong(consumption(desires
!
.
Willingness$to$Spend
Male General Female
RMB$10$Million
037
RMB$50$Million
Individual$Assets
Over(Half(of(Consumers(Spend(Less(Than(20%(
The(Less(Assets(the(Consumer(Owns,(the(
Annual(Spending(on(Luxury(Goods
Much(He(Spends(on(Luxury(Goods
Below 10% 40% 35% 30%
Unit&RMB
25%
25%
Over&100M
24%
45%
25% 6%
50&*&100M
23%
43%
29% 5%
10&*&50M
22%
42%
33% 3%
20% 15%
Above 50%
4%
33%
10% 5% 0%
10%()(20%
Below&10% Less&than&10M
25%
37%
36% 2%
10%&*&20% 20%&*&50%
38%
0%
20%
40%
60%
80%
100%
Above&50%
20%()(50%
038
3.(Luxury(consumption(are(becoming(popular(with(participation( of(mass(consumers
The(Most(Expensive(Luxury(Goods(Purchased(by(Chinese(are(Mainly( Less(Than(0.5(Million(RMB Top(3(Categories(are:(Watches,(Cars(,(Bags&Luggages Unit$RMB Less$than 0.5M
53% 19%
0.5$1$1M
16%
1$1$2M
More$than 10M
3%
Yachts
1%
Artworks
7%
2$1$5M
5$1$10M
Jets
1%
12% Handbags
Luxury Cars
22%
16%
2% Jewelries
13%
Luxury Watches$
35%
039
Top(3(Categories(of(the(Most(Expensive(Luxury(Goods(Purchased(by(HighV Asset(Class(Consumers(are:(Luxury(Cars,Luxury(Watches(and(Artworks
Artworks
6%
10% 9% 8%
Handbags
23%
8%
Jewelry& Accessories
15%
35%
19% 31%
Luxury Watches
35%
Luxury Cars
9%
Yachts
11%
38% 38%
3% Over?50?million?RMB
Private Jets
2%
10?G?50?million?RMB Less?than?10?million?RMB
4.(Luxury(consumption(deflected(abroad,(primary(composed(by( future(cultural(experience(and(overseas(brand(sales
040
Average'Consumers Cheaper'than mainland'China Sales'through'tour'guide Quality'guarenteed Wider'range'of'style
35%
Wealthy'Consumers
3% 21%
17%
20%
19%
17%
Souvenir'from'business'trip or'traveling
6% 5%
15%
Long:term'living'abroad For'the'personalized'service'& experience
8%
2%
32%
1)( With( the( shift( from( mainland( China( to( overseas,( the( “1+1+1�rule( of( luxury(consumption(is(being(broken
39%(of(Consumers(Who(Bought(Luxury( Goods(Overseas(in(the(Past(12(Months
Shanghai(is(the(Preferred(Mainland City(for(Chinese(Luxury(Consumers
49%
041
Higher(Asset(Groups(Have(a(Higher(Tendency(of(Buying(Luxury( Goods(Overseas
Over'100'million RMB
27%
26%
47%
50'<'100'million RMB
31%
24%
45%
10'<'50'million RMB
40%
Less'than'10'million RMB
44%
0%
10%
28% 25%
32% 31%
20% 30% 40% 50% 60% 70% 80% 90% 100% Mainland'China Hong'Kong'&'Macau Other
2)(Chinese(consumers(prefer(overseas(spending(of(luxury(products(in( brand(stores(and(DFS
042
Average(Asset(Class(Consumers(are(PriceVSensitive(and(Prefer(to(Buy( Luxury(Goods(at(DFS High(Asset(Class(Consumers(Purchase(Top(and(Rare(Goods(in( Overseas(Stores
9% 11%
Mainland'Malls Oversea Storefronts
16% 26%
32%
Duty'Free'Shops
31% Professional Agencies
4% 5%
7%
Other
4%
36%
10%
Events'&'Expos Online
38%
30%
11% 10%
7% 8%
2% 1% 2%
Over'50'million'RMB 10'D'50'million'RMB Less'than'million'RMB
3)(Leather(goods,(watches(and(jewelry(from(luxury(brands(are(primary( targets(for(Chinese(consumers
043
Average(Consumers
Perfumes(& Cosmetics( Leather(Goods Clothing
Watches
Jewelry Others
Wealthy(Consumers
32%
11%
30%
21%
28%
16% 7%
20% 1%
2%
27% 5%
4)(Luxury(consumption(deflected(to(overseas(will(soon(abate
044
Outbound(Chinese(Visitors(Increase(Every(Year(and(Booming(of(Tourism
25%
9000 22.0%
8000
20.4% 18.6%
7000
4000
20%
5738.65
6000 5000
7700
7025
4584.44 11.3%
4095.4
15%
4765.63
11.9%
3452.36
10%
9.6%
3000 2000
5%
4.0%
1000 0
0% 2006
2007
2008
2009
2010
2011
Tourism( and( cultural( experiential( purchasing( will( become( the( main( trend(for(future(overseas(luxury(consumption
045
2012
Main(channel(of(overseas(luxury(consumption(will(be(through(overseas( manufacturers
5.Maturating( of( tastes( for( luxury( brands:( from( purchasing( to( fulfill(other's(needs(to(prioritize(personal(needsZ(from(following( others(to(generating(individual(needs(for(luxury(purchasing
Do(you(love(logo? Billionaires#and#cultured#individuals Usually#over#45#in#age Focus#on#consumption#quality,#like#to#collect#and# invest,especially#in#artwork Focus#on#individuality#and#high#quality#service, Mainly#assets#at#around#billions Have#inGdepth#knowledge#of#brands,#like#limited editions#and#customized#products# Mostly#"60s#and#70s#generation"#millionaires# Value#brand#recognition Have#inGdepth#knowledge#of#luxury#products Like#to#attend#social#events#and#network Spend#a#lot#on#luxury#gifts White#collars#around#25G30 Buy#secondGline#luxury#products#or#fashion#brands,#love# logos Like#to#shop#online Desire#to#be#approved Pursue#fashion#and#luxury Mainly#under#25,#low#spending#power Brand#conscious#and#tend#to#follow#trends Like#to#shop#online Buy#knockGoffs
No#logo
Less#logo
Serious#with logo Love#for#logo
Eager#for#logo
Donâ&#x20AC;&#x2122;t understand logo
Low#income,#priceGsensitve Don't#care#about#brands,#focus#on#product#functions#
046
1)(Shifting(from(purchasing(to(meet(other(purchases(to(purchasing(for( private(usage
Mediaâ&#x20AC;&#x2122;s(View(over(Chinese(Luxury(Consumersâ&#x20AC;&#x2122;(Consumption
2011 Rich,%but%classless Rich,%don't%know%how to%live,but%learning%how%to Rich,%tasteless%but%content Rich,%but%don't%know how%to%live,content Poor%but%pretends to%have%class
2012
46%
48% 24%
27% 10%
8%
6% 10%
5% 6%
Rich%and%know%how%to%live
2%
3%
Rich%and%tasteful
2%
3%
047
Media(Thinks(the(Value(of(Luxury(Goods(to(Wealthy(Population( is(Mainly(Statement(of(Status(and(Improvement(of(Life(Quality
30%
28%
30%
25%
22%
20%
16%
Status&Symbol
15%
Improving&Quality&of&&Life
10%
4%
5%
Retain&and&Increase&Value Hobbies&&&Interest Other
0% Status&Symbol
Improving& Quality& of&Life
Retain&and& Increase& Value
Hobbies &&Interest
Other
2)(From(following(consumption(trends(to(forming(individuality(in(consumption
048
The(Higher(the(Asset(Group,(The(Easier(to(Be(Influenced(by(Sales( Personnel,(and(the(More(Enthusiastic(for(Limited(Editions(and( Customized(Products
50%
48%
45% Less(than(10(million(RMB(
40% 35%
10(750(million(RMB( Over(50(million(RMB(
32% 28%
30% 25%
20%
20% 17%
20%
16%
15% 10%
6%
5%
25%
9%
9%8%
17% 16%
5%
8% 5% 3%
3% 3% 2%
0% Product(design
Sales(personnel
Limited(editions
Customized
Discount
Environment (
Friendâ&#x20AC;&#x2122;s recommendation
049
3)( Higher( demand( for( customizationZ( wider( range( for( customization( offerings
The(Preference(of(Customized(Products(for(The(Chinese(Wealthy(are:( Clothing,(Jewelry,(Home(Furnishing(and(HighVend(Gifts Billionaires(Have(Their(Entire(Lifestyle(Customized
... High; end recreations Travel Luxury real estate Private jets Luxury yachts Luxury cars
Luxury cars
Watches
Watches
Leather goods
Leather goods
Leather goods
High;end gifts
High;end gifts
High;end gifts
High;end gifts
Home furnishing
Home furnishing
Home furnishing
Home furnishing
Jewelry
Jewelry
Jewelry
Jewelry
Clothing
Clothing
Clothing
Clothing
Less than 10 million RMB
10;50 million RMB
50;100 million RMB
Over 100 million RMB
050
051
6.( Social( functions( of( luxury( products( being( highlightedZ( Wealthy( Chinese( tend( to( collect( luxury( goods( with( value( for( investment
Wealthy(Chinese(Population(Prefers(Luxury(Goods(with(Collecting(and( Investing(Values(
70% 60%
61% 51%
50%
46% 42%
40% 30%
29%
26%
25%
20% 10%
9% 6% 5%
12% 13% 8%
2%
3%
20% 16% 17% 5%
4%
0% Less-than-10-million Personal-use-
10-6-50-million Business-gifts
Hobbies
50-6-100-million Retain&incresase-value
Over-100-million Other
052
High(Asset(Luxury(Consumers(Tend(to(Have(Luxury(Watches,( Jewelries(and(Artworks(for(Business(gifting
26%
25%
23%
23%
20% 17%
16%
15%
12% 9%
Cigarettes) &)Liquor))
22%
15%
13% 11%
10% 8%
Handbags
9% 7%
Watches
Jewelry
Cosmetics) &)Perfume)
8% 6%
5%
Clothing
Artwork
Top)3)under)10)million)RMB:)perfume)&)cosmetics,)handbags),)cigarette)&)liquor Top)3)10)I)50)million)RMB:)watches,)perfume)&)cosmetics),)handbags Top)3)over)50)million)RMB:)watches,)jewelry),artwork
053
Top(3(InvestmentVworthy(Luxury(Goods(in(the(Eyes(of(Chinese(Wealthy:( Real(Estate,(Artworks(and(Precious(Metals
Antiques
4%
Precious Metals&
15% Real&Estate
Luxury&products&
7%
Other
40%
15%
Diamonds
6% Artwork
26%
Stock&&&Bonds 1% Other 1%
054
Top(3(Luxury(Goods(that(Retain(the(Most(Values(to(Chinese( Consumers:(Watches,(Luxury(Cars(and(Jewelries
34%
Watches
Luxury-Cars
19%
Jewelry
17%
Leather Goods-
Fine-Wine
Yachts
Other
055
11%
4% 3%
12%
Consumers(from(Different(Asset(Classes(Have(Different(Views(over(Luxury( Goods(that(Retain(the(Most(Value(
32% 27%
26%
22%
21% 21% 16% 13% 11%
11%
13%
15%
Luxury$Cars
15%
11% 6% 3% 4% Jewelry$
Leather$Goods$
12%
10%
8%
6% 5%
Watches
24%
Real$Estate
7% 7% 5% 4% 3% Fine$Wine
Yacht
13% 10% 11% 8%
Other
Top$3$under$10$million$RMB:$leather$goods,jewelry$,$watches Top$3$10$>$50$million$RMB:$$jewelry,$leather$goods$,$watches Top$3$50$>$100$million$RMB:$watches,$jewelry$,$leather$goods Top$3$Over$100$million$RMB:$real$estate,watches$,$luxury$cars$
056
057
!
058
Lack( of( development( of( domestic( perfumes(and(cosmetic(brands
059
Main(reasons:
060
061
Future( trends( in( the( art( market( here(include:
062
Chapter Four
Distribution Channels of Luxury Brands in China
063
Section(One:(EVluxury(market(in(China
1.(Main(characteristics(of(Chinese(consumers(who(shop(luxuries(online 1)( Online( shopping( attitude:( most( consumers( hold( a( positive( view( regarding(online(shopping(for(luxury(products
Chinese(Consumers(Hold(a(Relatively(Positive(View(over(Online(Luxury(Shopping
Completely) confident)
2% Fairly confident)
10%
Will)not) shop)online)
33% Willing)to)try)
55%
064
Comparing( to( Male( Consumers,( Female( Consumers( are( More( Inclined( to( Purchase(Luxury(Goods(Online
2% 8%
1% 7%
Completely)confident Fairly)confident
53%
44%
Will)not)shop)online
48% 37% Female
065
Willing)to)try
Male
The(Higher(the(Consumersâ&#x20AC;&#x2122;(Educational(Backgrounds(are,(the(More(Inclined( They(are(to(Purchase(Luxury(Goods(Online
55%
54%
43%
Below&Undergraduate
41%
Undergraduate& Graduate&(MBA,&EMBA,&Ph.D)&
33% 25%
13% 10% 8% 4% Will&not&shop&online
Willing&to&try
Fairly&confident
6% 8%
Completely&confident
Consumers( in( TierV1( Cities( are( More( Inclined( to( Purchase( Luxury( Goods( Online(than(Those(in(Tier(2/3(Cities Will$not$shop$online Willing$to$try Fairly$confident$ Completely$confident$
Tier$1$Cities
52%
34%
26%
Tier$2$/$3$Cities
0%
10%
49%
20%
30%
40%
50%
8% 6%
16%
60%
70%
80%
9%
90%
100%
066
Consumers( Born( After( the( 80â&#x20AC;&#x2122;s( are( More( Inclined( to( Purchase( Luxury(
The( HigherVAsset( Consumers( are( Less( Inclined(to(Purchase(Luxury(Goods(Online
Goods(Online 100%
7%
6%
90% 80%
23%
19%
5%
4%
15%
12%
100%
8% 90% 80%
70%
43%
13%
48%
2% 11%
55%
40%
45%
56%
50%
30%
58%
30%
20%
0%
14%
60%
41%
50%
10%
4%
70%
38%
60%
40%
18%
5%
32%
39%
46%
15% 30$yo
40$yo
50$yo
50$and$above
Will$not$shop$online Willing$to$try Fairly$confident$ Completely$confident$
20% 10% 0%
35% 16% 10M$and below$
! 2)(Advantages(of(online(shopping:(most(important(benefit(is(convenience
067
42%
25% 10$E$50M 50$E$100M 100$and$above
Will$not$shop$online Willing$to$try Fairly$confident$ Completely$confident$
Consumers(Highlight(Time(Efficiency(When(Shop(Luxury(Goods(Online
Time%Efficiency
24.7% 20.4%
Cheap%Price Deliver Straight%to Door
17.2% 16.1%
Variety Guaranteed Quality
11.8%
Instant Availability%of New%Product
7.5% 2.3%
Others
Male( Online( Luxury( Consumers( Concern( about( Efficiency( Whereas( Female( Consumers(Pay(More(Attention(to(Prices
34% 31% 28% Female
Male
22% 19% 15% 12% 11%
9% 8%
7% 3%
Cheap&Price
Deliver&Straight& to&Door
Variety
Time&Efficiency
Guaranteed& Quality
Instant&Availability of&New& Products&
3%
1%
Others
068
Online( Luxury( Consumers( Born( after( the( 80â&#x20AC;&#x2122;s( are( More( Concerned( with( Product(Variety(and(Prices
51,and above
4%
29%
13%
8%
41,-,50,yo
38%
21,-,30,yo
10%
20%
Cheap,,Price Time,Efficiency Others
31%
26%
30%
40%
4% 8% 4%
35%
12%
12%
19% 0%
8%
29%
10%
31,-,40,yo
38%
15% 50%
Deliver, Straight,to,Door Guaranteed,Quality
60%
11% 70%
80%
3% 5%
3%
10% 6%
2%
14%
3%
90%
100%
Variety Instant,,Availability,of,,New,Products
Online( Luxury( Consumers( in( Tier( 2/3( Cities( are( More( Concerned( with( Efficiency(Whereas(Those(in(Tier(1(Cities(Pay(More(Attention(to(Prices
45%
43%
40%
37%
Tier-1-cities
Tier-2/3- cities
35% 30%
28%
26%
25%
18%
20%
14%
15%
8%
10%
8% 6%
5%
2%
4% 3%
0% Cheap-Price Deliver-Straight to-Door-
069
Variety
TimeEfficiency
2% 1%
GuaranteedInstantOthers Quality Availabilityof-New-Products
1% 6% 11% 23%
19% 18% 22% 10M$and$below
2%
4%
3%
7% 4%
9% 5%
10% 2%
37%
42%
Others
29%
16% 10$-$50M
Guaranteed$Quality Time$Efficiency
18%
24%
Instant$Availability$of$New Products$
10%
8%
Variety
25%
26%
Deliver$Straight$to$Door
10%
9%
50$-$100M
Cheap$Price Unitďź&#x161;RMB
100M$and$above
3)( Authenticity( is( the( main( concern( of( Chinese( consumers( buying( luxury(products(online
070
TOP(3(Concerns(of((Online(Luxury(Consumers:( Product((Authenticity,(Product(Quality,(AfterVsales(Service Return( Policy
6.7%
Others
0.1%
After(4(sales Service
10.1% Payment( Security
Product( Authenticity(
9.0%
48.3%
Product( Quality
25.8%
Male(Online(Consumers(are(More(Concerned(with(Product(Authenticity( than(Female
38%
Product Authenticity
23% 21%
Product Quality
17% 18%
Payment Security
Female
After*3*sales Service
10% 6% 7%
Return*Policy
Others
071
43%
2% 1%
14%
Male
Elder(Online(Luxury(Consumers(are(More(Concerned(about(Product(Authenticity
Product Authenticity
31%
35%
31% 30% 28% 27%
Product Quality 12% 13%
Payment Security 6%
After*3*sales Service
51*and*above 16% 17%
41*3*50*yo 31*3*40*yo
8% 9% 10%
6% 7%
Return*Policy
Others
43% 41%
9%
21*3*30*yo
11%
2% 1% 3% 4%
The(Higher(the(Net(Worth(of(Online(Luxury(Consumers,(the(More( Concerns(There(are(for(Product(Authenticity
3% 16% 11% 10% 24%
2%
1%
1%
9%
8%
6%
15%
16%
17%
5%
4%
28%
29%
9%
27%
Others Return$Policy After$-$sales Service Payment$Security$
36%
38%
42%
43%
Product$Quality Product$Authenticity$ Unitďź&#x161;RMB
10M$and$below
10$-$50M
50$-$100M
100M$and$above
072
2.(Issues(with(eVluxury(market(in(China
The(Pressures(to(Local(EVLuxury(Companies((Unit:(Point)
Unstable)resource
3.3% 3.5
3
3 2.5
Difficulty)with)capital)raising
2
1.8%
1.5
Lack)in)customer)feedback) and)poor)after5sales)service
3.1%
1 0
2.1%
2.8%
High)promotion)expenses
Inefficient)logistics
2.5% Low)customer)loyalty
073
1)(Hard(to(maintain(a(steady(supply(of(goods
Main%Methods
Approach
1.%Regular%purchase
Purchase%directly%from%the%brand
2.%Procurement%of leftover%inventory
Procure%leftover%inventory%directly%from%the brand%or%purchase%discounted%or%past=season models%from%resellers
3.%Smuggling
Illegally%taking%goods%from%OEM%factories
4.%Pass%as%genuine
Misrepresenting%fake%goods%as%authentic%and overcharging
5.%Joint%development
E=commerce%vendors%jointly%develop%products with%a%brand
2)(Lack(of(customer(experiences(and(afterVsales(services
074
3)(Lacking(of(customer(loyalty
5)(High(operational(costs
4)( Lacking( of( premium( logistics( services
075
Section(Two:( SecondVhand(luxury(market(in(China
1.(Three(trends(in(2012(of(the(secondVhand(luxury(market(in(China 1)(Continuous(expansion(of(market(capacity
600
Number1of1Stores
Growth1rate
568
512 500
16%
466
14%
425 400
10.2%
9.6%
18%
9.9%
10.9%
12% 10%
300 8% 200
6% 4%
100 2% 0
2009
2010
2011
2012
0%
076
2)( More( diversified( products( with( investment( value( are( becoming( increasingly(critical
The$most$popular$luxury brands$in$second$5$hand luxury$market
y
Top(3(Products(in(SecondVhand( Luxury(Market:(
Others
3%
Apparel
Leather(Goods,(Apparel(and(Watches
30%
Leather Goods
36%
Jewelry
12%
Watches
19%
3)(Top(niche(brands(are(encountering(a(chilly(reception(in(the(secondV hand(market
077
2.(Four(characteristics(of(the(secondVhand(luxury(market(consumers 1)(Youth(generationV(mainly(composed(of(“the(postV(80s”
21V30(Years(Old(are(the(Main(Consumers(of(the(SecondVhand(Luxury(Goods
50%
46%
Sold
Bought
45%
43%
40% 35% 30%
27%
25% 20% 15% 10%
21%
14% 13%
14% 13%
5%
5% 4%
0% 20(and(below
211 30(yo
31 1 40(yo
411 50(yo
51(and(above
2)(Consumers(who(are(“rich(aspirants”
078
Assets(are(the(Key(Factor(that(Affects(SecondVhand(Luxury(Goods( Transactions: Consumers(with(Assets(from(RMB(10M(to(50M(are(the(Active(Group(for( SecondVhand(Luxury(Goods(Purchasing(
Bought
Sold
Unit:RMB 10M$and below
37%
39%
10-50M
50$-$100M
10%
100-500M
7%
500M$and above
44%
41%
3%
10%
6%
3%
3)(Consumers(with(a(bachelorâ&#x20AC;&#x2122;s(degree(are(more(willing(to(buy(secondV hand(luxury(products
079
Consumers(with(Undergraduate(Degree(are(the(Most(Willing(for(SecondV hand(luxury(Goods(Purchasing
Below&undergraduate
Undergraduate
Graduate(Master/MBA/EMBA)
Bought
16%
43%
41%
Sold
17%
45%
38%
4)(SecondVhand(luxury(market(is(mainly(composed(of(female(consumers
Male
33% Bought Female
67% Male
29% Sold
Women are the most willing to transact in the second2 hand luxury goods market, they are the major consum2 ers of scarves, accesso2 ries, handbags, backpacks, etc.; Male consumers on the other hand, mostly purchase upscale station2 ery, lighters, small leather goods, briefcases, travel bags and small accesso2 ries. 21230 year olds mainly comprise this market.
Female1
71%
080
3.(Developing(trends(of(secondVhand(luxury(market(in(China
1)(From(“dealers”(to(“service(providers”
2)(Increasing(brand(innovation
3)(Integration(of(online(and(offline(channels
Others
4.5%
Online&shop
19.3% Brick&and&Mortar
76.2%
081
4)(Authentication(and(appraisal(of(
5)( FirstVtier( cities( have( the( highest(
luxury(products(will(become(more(
demand( for( secondVhand( luxury(
standardized
trading
The(Prosperity(of(SecondVHand(Luxury(Market(is(Correlated(to( Economic(Development(of(the(Region
Willingness7to7buy
Willingness7to7sell7
19%
Beijing
18% 37%
Shanghai
33%
13%
Eastern7China
16%
14%
South7China
11%
10%
West7China
13% 7%
5%
Northeast7China North7China
1%
1%
Cental7China
1%
1%
082
Reasons(include:
083
Section(Three:( Chinaâ&#x20AC;&#x2122;s(outlet(market
Well$known) Luxury)Brands
Converges)well$known)luxury)brands) that)are)high$grade)and)excellent)in)quality
Discounted)Price
Authentic)products)at)40$90%)off
Shopping) Environment
Away)from)the)city,)has)convenient)public)transportation) and)has)a)comfortable)shopping)environment.
1.(The(current(status(of(Chinaâ&#x20AC;&#x2122;s(outlets Development(speed(VVVVV(surpassing(US(in(10(years
084
Country
Scale (Unit:Store)
Development Time
Average9Annual9Outlet 9Growth (Unit:Store/Year)
424
10 years
42
300
100 years
3
China
US
Market(positioning(VVVVV(primarily(mid(to(lowVendZ(limited(highVend(outlets
Overflow(of(Domestic(Outlets(with(Lack(of(HighVEnd(Outlets
Low%&%end
45% High%&%end
25%
Middle%&%end
30%
085
Business(situation(VVV(“collapsing”(and(“expanding”(at(the(same(time
Closed'down'
7% On'construction
21% Existing
72%
Business(capacity(VVVVVranging(from(10,000(to(50,000(square(meters
086
10,000$sq.m$and below
4% 100,000$sq.m$and above
19%
10,000$0$50,000 sq.m$
48% 50,000$0$100,000 sq.m
29%
Operational( model( VVVVV( department( store,( real( estate( developer,( and( outlets(are(â&#x20AC;&#x153;the(three(tripartiteâ&#x20AC;?
Department'Stores'
32% Real'Estate'Businesses''
29% Outlets
27% Others''
12%
087
Main(Products(Sold(at(Shanghai(Qingpu(Outlet(and(Beijing(Yansha(are(Clothing
Shanghai(Qingpu
Beijing(Yansha
%
Clothing
Gift(items
Bags
Shoes(& Hats
Childrenâ&#x20AC;&#x2122;s apparel(& supplies
Dining
Bedclothes
Culture(/(Sports(/(Tech
Product(focus(VVVVV(mostly(apparels(but(product(categories(are(enriching
088
Storefront( brands( VVVVV( mainly( composed( of( fashion( brands( with( insufficient(luxury(brands
International(Luxury(Brands(Have(Low(Occupancy(Rates(in(Outlets(
Other(Brands 100% 90%
83%
80%
17%(
20%
80%
Luxury(Brands
85%
88%
15%
12%
70% 60% 50% 40% 30% 20% 10% 0% Shanghai(Qingpu Beijing(Yansha Tianjin(FlorentiaVillage( Beijing(Scitech
089
Beijing(Scitech(â&#x20AC;&#x201C;(Mostly(Fashion(Brands( Tianjin(Florentia(Village(â&#x20AC;&#x201C;(Mostly(Domestic(Brands 45
42
Tianjin/Florentia/Village
40 Beijing/Scitech 35
29
30 25 20
28
26 22
23
22 21
19
21 14
15
10
10
10
14
6
5
5 1
0 Luxury/ Brand
Women's/ Apparel
Men's/ Apparel
Sports/&/ Leisure
Home/ Children's/ Furnishing Clothes &/Underwear/ &/Toys/
Leather/ Shoes/& Bags/
Make/K/up
Others
2.(Problems(of(outlets 1)(Absence(of(top(luxury(brands
2)(Difficulty(in(maintaining(stable(supply
090
3)(Concerns(about(complementary(accommodations
4)(Varied(in(quality(with(frequent(occurrences(of(damaged(and(shoddy( products(replacing(good(ones
5)(High(operation(costs
6)(Inadequate(afterVsales(services
091
3.(The(development(of(outlet(markets(in(China Development(speed(VVVV(continuously(fast(growth
092
093
Chapter Five
Promotion of Luxury Brands in China
094
Types(of(Media(that(Participated(in(the(Survey 2% 5%
Broadcasting
6% 15%
Other.New. 10% Media New.Media
17%
Mobile. Media
Traditional Media
23%
83%
TV Outdoor Advertisement Internet
7%
Newspaper 32%
Magazine
Section(One:( Media(supports(to(luxury(brands(in(China 1.(The(resource(for(Chinese(consumers(to(obtain(luxury(product(information 1)(Traditional(channels(are(still(critical Friend(referral(shares(similar(importance(as(advertisements
095
Product#Brochure
Others
7%
3%
PR#Events
17%
Store
13% Media# Advertisements
30%
Friends
30%
Storefront(as(the(main(information(resource
HighVasset(Class(Consumers(Prefer(to(Get(Information(about(Luxury( Goods(from(Product(Brochures Magazine Unitďź&#x161;RMB
Internet
Product$Brochure
TV
Outdoor$Advertisement
35%
30%
9%
10$2$50M
43%
18%
17%
50$2100M
44%
10%
45%
7%
10M$and$below
100M$and$above
24%
27%
9%
Newspaper
10% 7%
7%
9%
6%
7%
9%
6%
5% 10% 6%
Consumers$with$assets$less$than$RMB$10M$prefer$to$receive$luxury$ information$from$magazines,$internet$and$outdoor$advertisements.$ Those$with$RMB$100M$and$above$on$the$other$hand,$favor$high$2$end$ magazines,$products$brochures$and$use$less$of$the$internet.$
096
Magazines(and(product(brochures(are(highly(popular
The(PostV80s(Generation(Consumers(Prefer(Online(Channels( Consumers(over(50(Prefer(Product(Brochures 45%
41%
38%
35%
34%
33%
21% 17% 15%
16% 13%
8%
8%
7%
9%
7%
5%
30#and#below TV
6%
30,40#yo Magazine
8% 9%
40,50#yo
Newspaper
Outdoor#Advertisement
10% 9%
6%
3% 50#and#above
Internet
Product#Brochure
Male(Consumers(Prefer(to(Receive(Luxury((Information(from(Magazines( Whereas(Female(Consumers(Prefer(Online(Sources Male
40%
Magazine
36% 18%
Product8Brochure
15% 18%
Internet
TV
Outdoor8 Advertisements
Newspaper
097
Female
8%
7% 7% 6%
9%
11%
25%
Internet(is(helping(viral(marketing
42%
E3A3commerce platform
10% 23%
20%
5%
Magazine TV
! Social networks
5%
12%
Search engines
5%
Newspaper Outdoor3Advertisement
13%
Brand website
65%
Product3Brochure Online
2)(The(spotlight(of(social(media Independent(media(are(becoming(opinion(leaders
098
Fast(growth(in(social(media(applications
From(passive(information(reception(to( proactive(attention(to(personal(creation
The(era(of(personalized(consumption( has(arrived
Luxury(media(becomes(popularized
099
2.(The(current(situation(of(luxury(brandsâ&#x20AC;&#x2122;(investment(on(Chinese(media 1)( Main( promotional( efforts( of( luxury( brands( in( China( are( through( advertisements,(supplemented(by(PR(events(in(China
Advertising( and( PR( Events( are( Two( Major( Marketing(Approaches( for( International(Luxury(Brands Advertising 45% 40%
45%
35% 30% 25% 20%
Others
15%
34%
10%
5%
PR4Events
5% 0%
7%
Event4Marketing
9%
Database4Marketing
2)( Main( media( types( that( luxury( brands( invest( in:( magazines,( internet( and(radio
100
Broadcasting
18%
Magazine
25%
Internet
20%
Newspaper
12%
Outdoor2 Advertisement
Mobile2Media2
4%
TV
15%
6%
3)(Inconsistent(of(media(placement(of(luxury(brands
34%(Luxury(Brands(Set(Media(Placements(Every(6(Months 34%$Luxury$Brands$Set$Media$Placements$Every$6$Months 1(Month 40% 35% 30% 25% 20% 15%
3(Months
10%
10%
5%
23%
5% 0%
28% 6(Months
101
34% 1(Year
Uncertain
4)( Factors( affecting( choice( of( media( for( luxury( brands:( focusing( on( target(audience(quality(and(content(positioning
Luxury(Brands(Select(Media(Based(On:( Readers'(Quality,(Content(Positioning(and(Capability(of((PR(Events
Readers')Quality
34%
Content) Positioning
27%
Capability)of)PR Events
13%
Circulation
11%
Readers')Stickiness Advertising Environment Interview)Capacity
6% 5% 4%
102
3 . ( Tr e n d ( a n a l y s i s ( f o r ( m e d i a( placements(of(luxury(brand(in(2013 1)(Shifting(to(popular(media
Fashion( magazines( equal( highV end(magazines
A(magazine(with(highVprofile(contents( means(it(is(a(highVend(magazine
2)(Media(budget(shifting(to(second( and(thirdVtier(cities
103
4.( 2013( Outlook:(Luxury( brandsâ&#x20AC;&#x2122;( Advertisement(Budget(in(China
Uncertain
42%
Decrease
26%
Increase(
32%
104
Section(Two:( PR(events(for(luxury(brands(in(China 1.(Reasons(why(Chinese(consumers(participate(in(luxury(brand( PR(events
TOP( 3( Reasons( For( Consumers( to( Participate( in( PR( Events:( Social( Networking,(Business(Purposes,(Recreation Networking 30%
30%
25% 20%
Service4and4Souvenirs
Business4Purposes
15%
28% 10%
1%
5% 0%
8% 19%
Organizers4are4Well EConnected
Recreation
14%
! Broaden4Horizons4& Experience4New4Things4
105
impulse(purchases
2.( The( current( situation( of(luxury( brandsâ&#x20AC;&#x2122;(PR(events(in(China 1)(Reasons(for(luxury(brandsâ&#x20AC;&#x2122;(PR(events
106
2)(Most(common(formats(for(PR(events(for(luxury(brands(in(China
Consumers
Brands( Private(Event( 22%
Experiential(Event 31% Networking(Event( 24%
New(Product(Launch 20% Sale 15%
New(Product(Launch( 20%
Charity(Event 14%
Sale( 11% Charity(Event( 6%
Experiential(Event 12% Networking(Event 8%
Grand(Event( 5%
Grand(Event 6%
Private(Event( (2%
Finance(&(Economics(Forum( 3%
Finance(&(Economics(Forum( 1%
3)(Formats(of(luxury(brandsâ&#x20AC;&#x2122;(PR(events(in(China
Independently'Host
13%
Co')'host'with' Other'Brands'
22%
107
Sponsor'or' Co')'sponsor
65%
Analysis(
3.(Value(analysis(of(PR(events(to(luxury(brands
Value#Analysis#of#PR#Activities#Held#by#Luxury#Brand PR#Activity#Type
Advantage Good#for#promoting#brand
Forum#and#Lecture
and#service#to#lower?level customers Good#for#promoting#brand
Banquet
and#service#to#old customers
Disadvantage Limited#to#kind#of customer#as#it's#not suitable#for#selling#and
selling#brand#and#service#to
ones No#sales#at#actual event
Sales#Activity
Best#combination#of branding#and#marketing Only#suitable#for#sales
Large#number#of#participantsE generally#has#a#specific#theme#and is#usually#sponsored#by#watch#brands
brands Moderate#number#of#participantsE Limited#capacity
old#customers Experiential#Activity
Large#number#of#participants
servicing#high?end#ones
Good#for#marketing#and Cocktail#Party
Notes
relaxed#environment#(conference is#the#most#widely#used#form)
High#in#cost
Very#limited
Has#a#lot#of#space#and#environment requirements Usually#conducted#in?store promotions
108
1)(Brand(Promotion
2)(Product(Sales
3)(Customer(Service
advertisements
109
4.( 2013( outlook:(Luxury(Brandsâ&#x20AC;&#x2122;( PR(Budget(in(China
Decrease Don't(Know(Yet
17%
Unbiased
32%
host(their(own(events(at(a(lower(cost Increase(
42%
110
9%
Chapter Six
Customer Relationship Management for Luxury Brands in China
111
Section(One:( Chinese(consumers'(brand(loyalty( comparing(to(foreigners
Higher(Asset(Consumers(Have(Higher(Brand(Loyalty
Unit:RMB less%than%10%million 10%@%50%million 50%@%100%million 100%@%500%million Over%500%million
Have%you%bought%over 5%items%from%the%same% luxury%brand?%
3% 17% 21%
28% 32%
112
Female(Luxury(Consumers(are(Less(Loyal(than(Male(Consumers((
90% 74% Female
Male
26% 10%
Have%bought%more%than%5%items%from% the%same%luxury%brand
Have%never%bought%more%than%5%items% from%the%same%luxury%brand
Products)and)brands)that)friends)are using)and)recommending)
Other
40% 35% 30% 25% 20% 15% 10% 5% 6% 0%
45%
22%
27% Products)and)brands)that have)high)media)exposure and)brand)recognition))
113
Products)and)brands)that have)personally)used)and experienced))
Section(Two:( Reasons(for(low(loyalty(among( Chinese(consumers 1.(Cultural(factors
Chinese( Luxury( Consumers( are( Enthusiastic( in( Understanding( and( Experiencing(New(Luxury(Brands(and(Products(
Very$interested More$willing, wouldn't$reject$ $ Occasionally ! interested 15%
57%
27%
Not$interested 1%
114
Have(You(Bought(Over(5(Items(from(the(Same(Luxury(Brands?( Which(Brand?
Clearly&stated&4 brands&
Clearly&stated&1&=&3 brands
46%
21%
Clearly&stated&5 brands
24%
2.(Economic(factors
3.(Service(factors
115
Did&not&fill&out&
9%
Luxury&Brands&with&the& Highest&Rate&of&Repurchase
Over(90%(of(Consumers(are(Satisfied(with(AfterVSales(Services(in(China
Not%Satisfied
7% Very%Satisfied
32%
Mostly%Satisfied
30%
Relatively%Satisfied
31%
Consumers(with(Higher(Assets(are(More(Satisfied(with(the(AfterVSales( Services(from(Luxury(Brands
Very/Satisfied
Unit:/RMB
29%
30%
10/5/50M
13% 10%
28%
30%
15%
31%
42% 40%
50%
60%
70%
3%
4%
34%
35% 20%
Not/Satisfied
26%
36%
50/5/100M
0%
Relatively/Satisfied
56%
Over/100M
Less/than/10M/
Mostly/Satisfied
8%
10% 80%
90%
100%
116
Male(Consumers(are(More(Likely(to(be(Satisfied(than(Female(Consumers((
Female
20%
Very Satisfied
Male
38%
35%
Mostly Satisfied
28%
32%
Relatively Satisfied
26%
13%
Not Satisfied
8%
The("PostV80s"(Have(the(Lowest(Satisfaction(Level(for(AfterVSales( Service(of(Luxury(Brands 5% 23%
4%
3%
20%
19%
32%
33%
Not#Satisfied
39% 37% 30% 33%
Mostly#Satisfied
44%
45% Very#Satisfied
26% 7% 20#$#30#yo
117
30#$#40#yo
Relatively#Satisfied
40#$#50#yo
Above#50
Consumers(in(Tier(2/3(Cities(are(More(Satisfied(with(AfterVSales(Service( from(Luxury(Brands(
60% 50%
Tier-1-cities
51% 45% 38%
40% 30%
25%
20% 10%
Tier-2/3-cities
21% 10%
7%
3%
0% Very-Satisfied
Mostly-Satisfied
Relatively-Satisfied
Not-Satisfied
118
4.(Channel(factors
Over(90%(Consumers(have(Expressed(that(They(Would(Not(Purchase( Luxury(Goods(with(Lots(of(Counterfeits(on(the(Market(
No Will$you$buy luxury$goods with$lots$of counterfeits?$$$
!
Higher(Asset(Consumers(Have(Stronger(Feelings(against(Buying( Luxury(Brand(with(a(Lot(of(Counterfeits(on(the(Market( 100%
80%
89%
85%
90%
93%
77%
70%
Would/not/ buy/ products/ with/a/lot/of/counterfeits
60%
Would/buy/ products/ with/a/lot/of/counterfeits
50% 40% 30%
23% 15%
20%
11%
10%
7%
0% Less/than/10M
10/5/50M
50/5/100M
Over/100M Unit:/RMB
119
Visibility(Ranking(of(Counterfeit(Luxury(Brands
★★★★★ ★★★★ ★★★★ ★★★ ★★★
5.(Advertisement(factors !!!!!!!!!
120
Section(Three:( Main(complaints(among(Chinese(consumers( about(the(services(from(luxury(brands(in(China
After,sales0center 30% 25% 20%
Other
24% 22%
28% Repairment0time
15%
20%
10%
9%
2012 5%
2011
3%
0%
14% 15% Product0&0material information
8% 12%
20% 25%
Service0attitude
Complaint(No.(1:(the(missing(of(discount(sales(seasons !!!
121
Repairment0price
Complaint( No.2:( limited( access( to( maintenance(locations
Complaint(No.(5:(long(maintenance(time
Complaint(No.(8:(unequal(treatment Complaint( No.( 3:( lack( of( product( return(guarantee
Complaint( No.( 6:( incomprehensible( product(description
Complaint(No.(4:(high(and(unbearable( maintenance(costs Complaint(No.(7:(unfulfilled(promises
122
Chapter Seven
A Long Way to Go for Chinese Local Luxury Brands
123
1.(Chinese(consumersâ&#x20AC;&#x2122;(confidence(in(Chinese(local(luxury(brands
48%(Chinese(Consumers(Believe(that(China(can(Bring(Up(Local( Luxury(Brands(
Cannot
52%
Can
48%
124
2011 12%
2012 Unique'mamufacture'skill'and process'
19%
23%
Established'brand'history'and culture'
31%
20% 18%
Large'market
5% 2% 7% 10% 14%
13%
Export'of'international'talent Chinese'university/trained professionals''
8%
Excellent'design'skills
8%
First'/'class'quality
8%
Cultural'influence
5%
2.(Competitive(advantages(for(Chinese(local(luxury(brands
125
!
3.( Opportunities( to( develop( Chinese(local(luxury(brand
126
25%
Jewelry Fashion1& Accessories
22% 18%
White1Spirits
12%
High171end1Tea
8%
Porcelain Perfume1& Cosmetics
5% 4%
Watches Cigarettes Others
2% 4%
1)(Jewelries
2)(Apparels(and(accessories !
127
3)(White(spirits
5)(Porcelains
4)(Tea
128
Most(Potential(Chinese(Luxury(Brands
129
Appendix
130
Appendix(1:( Research(Audience–(3,754(Chinese(Consumers
Assets(Distribution(in(2012(–(China(Luxury(Report((((Unit:RMB)
10&*&50M
33%
Over&50M
35% Under&10M
32%
131
13%
50&*&100M
12%
100&*&500M
10%
Over&500M
Consumers(with(assets(less(than(10(million(RMB( 1% Ph.D%
3% 16%
EMBA
MBA
Master
2% 60% 50% 40% 30% 20% 10% 0%
50% 34% 14% 2% 20B30%yo
30B40%yo
40B50%yo
58%
Above%50
64%
Bachelor
36% Male
Junior% college
49%
Female%
51%
15% Under%junior% college
5%
FirstBtier%cities
SecondBtier%cities
132
Research(targets(V(V(luxury(goods(consumers(owning(high(personal(assets( (RMB(10(million(to(RMB(50(million)
Consumers(with(assets(between(10(V(50(million(RMB(
Ph.D(
1% 7% 11%
EMBA
13% MBA
50%
42%
43%
40% 30% 20%
12% 3%
10% 0% 20 &30(yo
Master
30 &40(yo
47%
40 &50(yo
47%
Above(50
53%
Bachelor Female
29%
Junior(college Male
Under(junior( college
133
15% 6%
71% First&tier(cities
Second&tier(cities
Research(targets(V(V(luxury(goods(consumers(owning(ultraVhigh(personal( assets((RMB(50(million(or(above)
Consumers(with(assets(over(50(million(RMB(
Ph.D%
3% 14%
EMBA
MBA
12% 7%
60% 50% 40% 30% 20% 10% 0%
54% 24% 3% 20B30%yo
Master
19%
38%
30B40%yo
40B50%yo
50%
Above%50
50%
Bachelor Female
Junior%college
Male
16% Under%junior% college
33%
67%
10%
FirstBtier%cities
SecondBtier%cities
Data(Source:Fortune(Character(Group Appendix(4(Characteristics(of(Luxury(Consumers(with(Hyper(Assets
134
Appendix(2:(Research(targets(â&#x20AC;&#x201C;(236(managers(of(Luxury(Brands
Less$than$ Undergraduate Undergraduate
Graduate$ (Masters/MBA/ EMBA/Phd)
12%
75% Male
68%
44% 56%
20% FirstCtier$cities
60%
Female
25%
SecondCtier$cities 60%
52%
51%
50%
50% 40%
31%
40%
32%
30%
30%
17%
20%
20%
10%
Unit:RMB
10%
9%
8%
0%
0% 10M$and$below
10C50$M
50M$and$above
Appendix5(Characteristics(of(236(Brand(Heads
135
20C30$yo
30C40$yo
40C50$yo 50$and$above
Appendix( 3:( Research( targets( â&#x20AC;&#x201C;( 217( directors( of( media( and( advertising(companies
Graduate(Master/MB A/EMBA/Phd)
35%
56% 44% Male
Undergraduate
52%
54%
Female
48%
Less6than6 undergraduate
11% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%
First-tier cities
44%
Second- tier cities 60%
36%
49%
50% 40%
20%
20% Unit:RMB
31%
30%
10%
12%
8%
0% 10M6and6below
10B506M
50M6and6above
20B306yo
30B406yo
40B506yo 506and6above
136
Fortune(Character(Group
Fortune(Character(Institute
2013(Fortune(Character(Report(Lists
137
Fortune(Character(Media
138
Yao(Ke(Network(Service((in(building)
Brief(Introductions(about(Founders
139