17
Jan
2013

A lack of physical presence in China is no longer an excuse

There may be those in the world who think, based on many media reports last year that the Chinese luxury market had taken a nosedive just because growth figures were single digit. As we are all aware, consumers spent much more on luxury whilst travelling than they did within the domestic market that saw many of the longer establish brands abandoned by consumers looking for new, and less ostentatious items.

The slowing of domestic consumption does perhaps hide another factor affecting the market; that of increased consumer knowledge. As a nation, the Chinese can learn things very fast, perhaps not in a way that we might in Europe, but still they learn by watching and listening to what they are told by brands and others they respect and trust. Last year was no exception on this rapid learning curve.

For brands within China this can be a positive or a negative. If you offer something new, the word can spread quickly, if you are seen as the same as before, then as some found out in 2012, they were seen as ‘old news’ and consumers looked elsewhere to spend their money. For brands overseas without a presence here in China, they just cannot only be new they must demonstrate why they should be trusted.

With so many Chinese consumers travelling to purchase abroad, a door is opening for those brands currently non-resident to establish their name here. The investment is not small, as media costs here are generally high, but this path to fame is well trodden and the default for any brand wanting mindshare from domestic consumers. There is no way around it, and just assuming that the travelling Chinese will either find your stores, and as unlikely, come in and spend money with you is naïve.

These facts are not new, but perhaps after the waves of Chinese hitting the big European and US cities in 2012 and over the Christmas holiday period, more senior managers will consider the lost opportunities for their brand so far, and take a more proactive approach this year.

Share

Top