Luxury Brand Management in China

Luxury Brand Management in China

Abstract

China’s mainland has become one of the most important emerging luxury markets in the world. More and more international luxury brands sail to this significant market. It is estimated that in 2020 China will rank as the 1st luxury market beyond the U.S.A. and Japan. Nevertheless, presently China’s enormous market share is firmly and mostly taken by international luxury brands. In contrast, some of the domestic brands are lagging and lingering on the edge of extinction. Some local companies with the potential ability to develop their luxury brands are restricted and impacted by the traditional perspectives and cultures as well as other complicated factors. These are studied in this paper and some recommendations and solutions are developed accordingly.

Keywords:  Luxury market, China, domestic brands, culture

Luxury Brand Management in China

Introduction

With China’s rapid economic development, people’s consumption levels are rising. The number of Chinese luxury consumers has increased significantly, and with the increasing purchasing power, the Chinese luxury market has become the largest emerging market in the world. But Chinese luxury purchasing activities are only at the primary stage, and Chinese local luxury brands can hardly win a place in Chinese market.

This study explores the current Chinese luxury market and its consumers’ features. Based on these I am able to dig deeper to analyze the preferences of the Chinese luxury consumers as well as the differences between domestic brands and international brands. The factors that affect the local Chinese brands’ lagging exploiting rate are assessed.

In the final conclusion, the major issues and suggestions are summarized to address the current domestic luxury brands’ negative situation. Significantly, Chinese luxury brands should re-invest themselves by learning from foreign companies’ management strategies as well as efficiently leveraging the advantage of the traditional culture and government’s support.

Background

Luxury is defined as anything that is expensive and enjoyable but not essential by the Oxford dictionary. Luxury is beyond elementary needs. It is normally well known and recognized by its expensive price, unique quality and high reputation of its brands’ history.

Chinese luxury market & customers

The increase in China’s economy helped its luxury market to succeed. In 2008, China’s GDP exceed Germany for the first time ever. In 2010, it became the world’s second largest economy entity. Even though China has the largest population in the world, the enhanced consumption capability and the potential consumers’ increasing still make it an attractive market for many luxury brands from all around the world.