The best way for a luxury brand to find success in China? Be there
Many businesses don’t do so well in the world’s biggest market because they don’t make efforts to localise or to understand the evolving luxury customer base
Even the briefest study of international media should turn up clear indications of the power of the Chinese consumer. Bain & Co’s “China consumes 32 per cent of global luxury” is perhaps the best-known indicator that any luxury business intent on finding success really needs to have a strategy for finding success in China.
First, there’s the “how?”. You have to think digital. You need to work with KOLs (key opinion leaders), China’s supercharged version of the West’s “influencers”. You have to understand all the apps, platforms, bells and whistles expected by your customers – spread out over the world’s third-largest country, where “small” cities have populations of over 5 million, and big ones have populations of 20 million – each with its own distinct dialect, culture and history.
The sheer size of the market makes the urge to connect with the Chinese consumer understandable. The “China Opportunity” offers perhaps the greatest potential for profitability that the World has ever seen. Yet for all the savvy marketing campaigns, digital calibrating, consumer targeting and app configuring, one simple fact is often overlooked.
And that’s to do with the “where?”. After speaking to some true China experts, it is apparent that the simplest way to succeed in China – to connect to the consumer and win in business – is to actually be here.
There are still a number of luxury brands still operating on decisions made without locally-based expert guidance
That may sound obvious. Yet, quite often, strategic decisions about doing business in China are being made outside China, by people who have rarely even visited – let alone lived in – the country.
I met up with Barry Lin, general manager of China’s travel booking giant TuNiu, when he was in town visiting ITB China. He said, “In China, everything is about trust, partnerships and knowing each other. What that means is the top people, the leaders of a brand, need to come to China – and for some time. Not just a few days saying hello to people, but for several months – bring your family if you have to. Because from this business sense, it’s not only about ‘how you talk to the Chinese consumer’, the business reality is who will do business with you and who will help you.”