Why has Asia fell in love with our luxury brands

Why has Asia fell in love with our luxury brands

This article comes from Capital magazine

Après de longues années de croissance à deux chiffres, le moral serait-il en berne dans le secteur du vrai chic parisien ? Selon le cabinet d’études américain Bain & Company, en 2016, pour la première fois, la part des consommateurs chinois dans le marché du luxe est passée de 31 à 30%.Even more worrying, in Hong Kong and Macao, sales have dropped by more than 15%.And if growth on the Asian continent is still there, with 3%, it is less important than in the rest of the world.The giants like LVMH (Louis Vuitton, Christian Dior, Fendi, Berluti, Givenchy ...), Kering (Gucci, Saint Laurent, Boucheron ...), Chanel or Hermès are worried, especially since they do not have all the cardsin hand to upset the trend.

In China, for example, the policy of combating corruption has transformed the luxury market, in particular that of watches.As early as 2011, the government has embarked on an operation of their own hands against senior officials suspected of personal enrichment.Yang Dacai, former director of the Shaanxi province inspection office, was heavily condemned and the photos published on the net of his 11 watches worth several tens of thousands of euros are not for nothing.

Suddenly, the external signs of wealth are no longer fashionable in the country.""""This refers us to Confucianism, explains Philippe Jourdan, associate professor of universities and co -founder of the promised consulting agency Consulting.Society authorizes wealth, but only in an intimate and private circle.This goes back much further than communism and remains strongly anchored in Chinese traditions.""""

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The bling-bling era is over and the consumer asks for brands more than a simple logo.Admittedly, the population is enriched and the appetite for luxury products continues to grow, but the market has become mature. """"C’est pour cela qu’aujourd’hui le luxe abordable et l’ultraluxe progressent, mais que le luxe intermédiaire souffre un peu plus"""", poursuit Philippe Jourdan.

According to this expert, the fall in growth in Asia does not affect all brands.Chanel and Hermès are among the companies that continue to get out of the game because their history and their image reassure consumers. """"De plus, elles savent gérer la pénurie, poursuit le consultant.This is essential on the Asian market where the cult of the single object is even stronger than with us.When you position yourself on luxury, the product must be rare.""""French brands are not content to sell on the continent because the bulk of the business is done elsewhere.

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According to a character fortune study, 80% of luxury products purchases by Asians take place outside their borders.More than 80 billion euros are spent in London, Paris, New York and in all the holiday resorts of tourists. """"Les consommateurs chinois ou japonais sont très attachés aux symboles et, pour beaucoup, l’origine compte autant que la marque.Even more than the Americans, they love to buy chanel in the legendary Parisian store on Cambon Street. Ils reviennent ainsi sur les traces du passé pour s’offrir un morceau d’histoire"""", explique cette vendeuse qui a reçu une formation en mandarin.

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But Chinese power only appreciates this particularism which is expensive in currencies and does not bring anything to the country.In a global strategy to please the authorities, certain brands have therefore decided to rebalance their trade by trying to sell more in the Middle Kingdom.While integrating the tradition of Chinese luxury (craft work, design, precious material). """"Une partie de cette clientèle haut de gamme recherche des racines et des traditions.The brands must tell a story to the Chinese. Et une histoire qui est aussi la leur…"""", explique un cadre d’une grande maison parisienne qui souhaite conserver l’anonymat.

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Because the subject is very delicate for the mastodons of the sector, who advance many explanations to the few closings of shops and, above all, the slowdown in creations of sales of the last three years. """"Dans les sites installés en Chine, nous sommes obligés de vendre plus cher car les produits non fabriqués dans le pays sont très fortement taxés.""""However, even if it means cutting up on its margins, Chanel, in 2015, decided to start a policy of harmonization of its prices between Europe and China by lowering the price of objects sold in the country by 20%.

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Others increased the number of references, because sometimes they only offered half of the collections in local shops.Sellers training is another problem. """"C’est vrai qu’il est très difficile de trouver des employés qui ont la culture du luxe, poursuit le cadre.Suddenly, the average shop of shops is much less important than in other countries.""""

French luxury giants, aware that business should also be done in China, decided to forget these difficulties.At the end of 2015, Dior opened a huge shop in China World Mall in Beijing, following the example of Hermès, who had inaugurated a year earlier a store of 1.100 square meters in Shanghai.The Louis Vuitton brand, inaugurated last July its first e-commerce site in China.

To continue to gain market share, French chic is not content to revive places of sale.The looks are turned further east, towards South Korea. """"Ce pays pèse déjà énormément sur le secteur des cosmétiques et du maquillage, précise Philippe Jourdan.Youth, very urban and the strong purchasing power, follows creators and inffluency the entire Asian market.

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Les Coréens sont très prescripteurs et aujourd’hui ce sont eux qui font la tendance… """" En mai 2016, Chanel a présenté son premier défilé à Séoul.Dior has opened a six -story store in Gangnam, the chic district of the Korean capital.LVMH invests in all directions and the stars, such as rapper G-Dragon, are the new darlings of the French brands.The pros only have a word to the mouth, the hallyu, name of this pop culture which invades the streets of Seoul.What if the future of luxury was played in Korea?