Tuesday, December 11, 2012

Western luxury giants are betting Chinese brands

PPR will offer high quality products incorporating the cultural codes of the Middle Kingdom. Richemont, Hermes and L'Oréal seeking to develop local brands. Should there be Chinese brands to take root in the Middle Kingdom? While the future of the luxury industry obviously going to China, several groups are trying to answer in the affirmative to this question. The latest example, PPR .

 The French group has announced the acquisition of Qeelin, a luxury jeweler founded by Chinese and French. Based in Hong Kong, Qeelin offers jewelry ranging from 2,000 to 30,000 euros, whose aesthetic is inspired by the Chinese culture (see below). With its small diamond pendants depicting dragons and pandas, Qeelin aims to capture the taste of some Chinese for that glitters. End of 2010, Hermes had already made a similar bet in a different product category. The French group created from scratch Shang Xia, a Chinese brand positioned on a less ostentatious luxury, but extremely refined - and expensive - also a part of Chinese tradition.

The product range is based on materials directly from local crafts (porcelain, jade, cashmere, bamboo ...) and includes products positioned on the ancient practices of the country of tea to play mahjong. With this strategy, Shang Xia seeks to replicate, in the Chinese universe, which made the success of Hermes. A subtle exercise Precursor, the Richemont Group has embarked on an adventure comparable since the late 1990s. The world number two has bought luxury Shanghai Tang, a brand of leather goods and ready-to-wear. Shanghai Tang, which has a fifty shops, is positioned around a Chinese aesthetics revisited by modernity.

Subtle, the exercise is still very difficult to succeed. " By playing multiple tables at once and offering a range of products and prices very elastic, Shanghai Tang barely have a consistent brand and really capture market share , "says an industry expert. In cosmetics, L'Oréal, he bought in 2004, the Chinese brand Yue Sai, which he revised ranges based on traditional Chinese medicine. In each of these cases, European groups with expertise in luxury in China are trying to impose a brand tailored. But, as noted Yannig Gourmelon, partner in the firm Roland Berger, " the question will inevitably arise is that the ability of the Chinese to create their own luxury brands and compete with the big Western names . " Surprisingly, the Chinese seem still skeptical on this point. According to a survey conducted by Beijing University on international trade, 68% of consumers of luxury goods in China are skeptical that appear, in this sector, trademarks totally Chinese.