豪華品牌在中國： 第IV部分
前面挑戰
由尼克・ Debnam &喬治Svinos， KPMG
零售在中國的豪華清楚地提出巨大的機會，而且風險和挑戰。 除升高競爭之外像在新興市場之中共同的，最重大和相關挑戰為豪華品牌有關知識產權(IPR)章程、時間表為回收投資，低豪華商標意識、興旺的中國旅遊業和有限的零售基礎設施。
• IPR章程
根據美國。 使館在北京海盜行為率在中國在世界保持一个最高，并且，平均，消費品的20%是假劣。 國內公司由海盜行為麻煩，以一項最近研究由訊息產業發現的部這樣問題遭受的中國公司的37%。 (51)
中國政府在建立一種有效和完全法律制度做了突襲關於IPR保護和加強執行、監督和檢查的這樣法律。 然而，因為司法散開在許多政府機構和辦公室中，嚴重的問題與IPR相關在它的執行和懲罰在地方水平。 (52)
中國公司現在開始加強需要IPR保護的品牌，并且，結果，他們也要求更好的執行。 最近假劣案件協助了提高了悟在中國消費者品牌真實性的重要之中。 中國的法院忙於追逐在仿冒豪華物品的企業下。 In 2005 alone, over 13,000 cases were filed, a fifth more than the previous year, including many launched by foreign firms. (53)
• Longer-term returns
Despite the fact that luxury sales in China are on the rise, luxury brands should not expect a quick return on their investment. The costs of setting up, training staff and building brand awareness can be high, while demand remains limited in the short term. High import duties and consumption taxes will make it difficult to target market segments beyond the economic elite. (54) As a result, many luxury brand companies can expect to wait five to ten years to see a return on their Chinese investment. Thus far, only a hand full of luxury brands, including LVMH and Prada, have reported making significant returns on the Chinese mainland.
• Shortage of services providers
Finding the right location poses a problem, as does the process of applying and being approved for a retail license. This is because China has yet to streamline such processes. (55) As with other sectors, the pace of change in China’s retail industry has created bottlenecks and the need for new and professional services. There are still few credible local specialist developers of retail property on the mainland. More commonly developers have adopted easy solutions, either leasing property long term to a department store or hypermarket, or selling it in small units to investors and entrepreneurs. And, although this leads to a satisfactory outcome for the developer, it brings monotony for the shopper and a growing number of ailing retail centres. Chinese developers need to be able to work with retailers to create a much more attractive shopping experience for consumers. (56)
• Ineffective advertising and media
While luxury brands have been placing advertisements in internationally renowned magazines, they often find the message is lost. This can be attributed to Chinese newsstands, which are overflowing with advertisements to the extent that most readers barely notice a luxury newcomer. A breakdown in advertising messages is also a result of the size of the country. While a marketing effort in one city may yield results there, it will have little to no impact elsewhere. Many cities outside of the main commercial centres may have potential customers, but reaching them means doing something that they can see directly. This has led some high-end brands such as Cartier to break with their standard practices and advertise and promote their products more directly than they would in other markets. Cartier has not only gone to print, but also to television as the best choice for developing the Chinese market. (57) Media costs in China can however be very expensive, particularly in Beijing, Shanghai, Guangzhou and Shenzhen. Complemented by heavy clutter and difficulty in reaching targeted audiences, building brand equity can be a costly exercise. (58)
• Staff shortages
Some luxury retailers, initially attracted by the low cost of labour in China, have struggled because of a lack of local management talent. A good strategy here is to find trained staff or to train and develop staff once employed within an organisation. However, in some cities, there is also a clear shortage of trained staff in sales and service positions related to luxury goods. Luxury brands in China need to empower their employees to become brand ambassadors.
• Brand positioning
For those eager to expand in China, it is critical to take note that success in the Chinese market requires far more than opening many retail outlets. Product, presentation, packaging, promotion, distribution, merchandising and advertising should all contribute toward an essentially simple, unified purpose- delivering genuine brand value to customers. The most successful luxury brand firms began the process of building their brands long before they entered the market. This is a very important consideration for the Chinese market where consumers know little about luxury brands.
Moët Hennessy, one of the most successful luxury wines and spirits brands in China, and part of the LVMH group, is a prime example. Following the establishment of its Beijing office in 1996, the company spent nearly five years conducting market research on consumer psychology and behaviour, distribution channels and media advertising before its formal entry into the Chinese market in 2001. Heavily investing in marketing, public relations and retail networks, the company has a firm strategy of keeping balance between the enhancement of brand image and the expansion of distribution channels. Proud of its history, strong traditional values and uncompromising attitude towards quality, the company has endeavoured to perfect its brand image in all aspects. By 2005, Moët Hennessy had accelerated annual growth to about 15 to 20 percent, with stable development in 26 cities across China. (59)
• Managing risks
In an effort to leverage better distribution channels and the market knowledge of local dealers, as well as to lower operating costs, many foreign luxury companies choose to license to Chinese retailers. Unfortunately, this strategy has led to failure for many who subsequently found that distribution channels are not being adequately controlled, particularly with retailers selling counterfeit goods alongside genuine products. As such, more luxury brands in China are choosing to build dedicated retail outlets of their own, eliminating the concern for inappropriate licences, and focusing on the main stores. However, for smaller luxury brands this may not be feasible and using an intermediary maybe essential. If this is the case, then it is important to monitor the franchisee closely so that the brand is protected and uncompromised at all times.
• Promoting a culture of luxury
For luxury brands in China, the focus should not just be on selling products. Luxury brands need to seed their success through establishing a luxury culture in the Chinese market. Such culture will define the context in which luxury brands operate. Many Chinese customers have little sense of luxury culture with much of the nation still living in relative poverty, and while there is a growing cohort of rich Chinese most are yet to have a full understanding of and appreciation for the “luxury lifestyle”. While the sudden jump in wealth among Chinese has resulted in a short-term boom in luxury buying, only through the cultivation of a luxury culture can luxury brands look forward to sustainable, healthy development in China over the long term. As has been evidenced, fashion shows, special events and other public relations efforts by luxury companies create a luxury culture environment, giving ample opportunities to Chinese customers to practice their taste for a luxury lifestyle and build emotional connections with the brands.
Nick Debnam & George Svinos, KPMG
This is part IV of a KPMG Retail Report. Next week we will publish part V.
Read Part I, Part II and Part III
