Brand Confusion in China 28/9/10

Great news for international luxury brands. A recent study has shown that Chinese consumers prefer imported brands to domestic brands. We’ve discussed in detail the increasing importance of the Chinese market to the luxury industry- they are fast becoming the world’s number one consumer of luxury goods. So much do the Chinese prefer international labels, that many Chinese brands are presenting themselves ambiguously, of non-specific origins, faux-foreign, if you will. Will they succeed in crowding out the international competition? We aren’t convinced….

It is interesting that whilst domestic brands want to seem international in China, international brands are working hard to localise- See Hermes and the recent launch of its new Shang Xia label. Much attention is being given to the discussion over which brands will survive as the fittest in the increasingly overcrowded, but extremely lucrative, Chinese market. We think the real issue is going to shift from domestic vs imported, to whether brands can fight themselves apart from the blurry mass of competition.

It is important for brands to remember that identity is everything, but identity does not exist in a vacuum. Clever marketing involves adapting with your market. If the Chinese market demands an international, world-renowned, elegant but youthful, sophisticated but accessible, showy but modest, traditional but edgy brand in line with domestic taste and demonstrating good CSR…. Then that, it seems, is what they shall have. Too confusing? Hermes has it all sorted. Launching an international brand off the back of a global fashion powerhouse, all the while intertwining it with Chinese history and culture? Pure genius. We can’t wait to watch Shang Xia blossom.

Image credit:edition.cnn.com

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