May 1st, 2008 by China Business Success Stories
By Shaun Rein
This commentary is based on an article appeared in Forbes
While massive amounts of money is being spent on marketing in the run-up to the Olympics to capture China 250 million strong emerging middle class, unfortunately most marketing campaigns are failing to deliver the results that the sponsors like Coca-Cola or Adidas were hoping for. My latest piece looks at the effectiveness of Olympics sponsorship and whether or not it is helping companies win the hearts, minds, and wallets of China’s middle class. Some of the results were surprising:
1) the vast majority of respondents said that they did not care who the official sponsor was when trying to make a purchase and in most categories people had little idea who the official sponsor was. Instead, consumers were more concerned with the quality and safety of the product and how the brand image fit with their lifestyle. Read the rest of “Beijing Olympic Sponsorship’s A Waste” or post a comment
April 9th, 2008 by China Business Success Stories
Chinese youth intend to spend “considerably more” in 2008 than they did in 2007. Multinationals had better start thinking young
By Shaun Rein
This article originally appeared in Business Week
The subprime debacle has rattled retail sales in the U.S., forcing many companies to downgrade sales estimates as consumers shy away from checkout counters. Luxury retailers and credit-card companies in the U.S. have recently reported bearish projections for the coming quarters.
China, however, is a retail market on the rise. In 2007 China posted 17% growth in retail spending. Electronics retailers Guomei and Suning posted record numbers, and both paint positive pictures for the future as Chinese consumers continue to buy LCD TVs from LG Electronics and mobile phones from Nokia (NOK).
Much of this continued growth is fueled by Chinese under the age of 32. My firm, the China Market Research Group (CMR), conducted in-depth interviews with 500 Chinese between the ages of 22 and 32 in 10 cities to gauge whether fears of a global slowdown would influence their shopping habits. Read the rest of “China’s Rising Retail Market” or post a comment
March 26th, 2008 by China Business Success Stories
The process of importing, distributing and selling luxury goods in China raises further challenges for companies, including a number of difficult questions regarding tax treatment, customs duty, logistics and the transfer of intellectual property.
Customs duty, import VAT and consumption tax can all be charged on luxury goods imported into China. The ability of brands to mark up their goods at dramatic premiums can also prove difficult to explain to tax authorities when the time comes to file income tax returns.
Read the rest of “Luxury Brands in China: Part V” or post a comment >>
March 19th, 2008 by China Business Success Stories
The challenges ahead
By Nick Debnam & George Svinos, KPMG
Luxury retailing in China clearly presents tremendous opportunities, but also risks and challenges. In addition to heightening competition as is common among emerging markets, the most significant and relevant of challenges for luxury brands concern Intellectual Property Rights (IPR) regulations, the time frame for a return on investment, low luxury brand awareness, booming Chinese tourism and limited retail infrastructure.
• IPR regulations
According to the U.S. Embassy in Beijing the piracy rate in China remains one of the highest in the world and, on average, 20 percent of consumer products are counterfeit. Even domestic companies are troubled by piracy, with a recent study by the Ministry of Information Industry finding that 37 percent of Chinese companies suffered from such problems. Read the rest of “Luxury Brands in China: Part IV” or post a comment
March 12th, 2008 by China Business Success Stories
Strategies for luxury brands
By Nick Debnam & George Svinos, KPMG
For certain luxury brands, China has already outstripped both Japan and Hong Kong as the largest single market in Asia Pacific. (37) But the growing presence of luxury brands in China is bringing with it greater competition. The country’s busiest streets, such as Nanjing Road in Shanghai, are witnessing fierce competition among the world’s luxury brands. While some have warned that the China market is becoming saturated, (38) for the time being the environment is still a positive one for potential entrants.
• Marketing
As most Chinese consumers have low levels of brand awareness, they also have low levels of brand loyalty. However this also means that sales staff can be an extremely powerful tool –with the ability to not only inform consumers of the benefits of their brand, but sway them towards making a purchase.
Read the rest of “Luxury Brands in China: Part III” or post a comment
