21
Jan
2013

Adapt or die

Over recent weeks, we have seen the China phenomenon impact luxury sales around the world. Like a plague of locusts, Chinese shoppers buzz into town and quickly buzz out again, taking a trail of expensive purchases with them. And like all humans, they will learn from this experience and as a result change the way they do things the next time round.

This holiday period may have seen many buy the big name brands that have a strong position here in China; the question that cannot yet be answered is what will they do and buy next time? Quite probably, it will not be the same brands, but they will seek out new, less obvious and perhaps more understated brands with strong stories and high-perceived values (monetary and social).

As a business we see a range of attitudes to the Chinese market and its consumers from brands of all sizes and from all nations. Naturally the big names have their own plan that is executed by a local team that are often the ones who open the eyes of consumers, only to have their colleagues elsewhere in the world earn the money from them. But this changing and often unpredictable consumer group are becoming smarter and more savvy, so smaller more niche companies need to step up if they are to take a piece of the action.

Geography appears also to be an attitudinal factor amongst brands. Europe has always been popular with Chinese consumers, the country states taking more interest recently in understanding them better and satisfying their particular needs. Those in the US, other than a few top department stores appear to be lethargic in really establishing this understanding and adaptation. Perhaps the US brands consider their status as too lofty or perhaps too sophisticated for Chinese consumers, or maybe its a cultural pride that precludes a more open attitude?

None of us can avoid the fact that the balance of the global economy is shifting, and the strength of Asia and in particular China is rising. To ignore this is foolish, as it will in one way or another affect us all. Luxury and premium brands around the globe need to take heed no matter what their size and location, and adapt accordingly or face the potential consequences.

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