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Developing Brands

In this section of Luxury Insights China, we take a quick look at a brand new to China. In this issue, we remain with handbags and the ‘handbag to the stars’ designer Lana Marks.

Lana Marks entered China in 2010, opening their first boutique in Beijing. Selling on its celebrity status, the brand that is well known for its bags made from rare skins, has established strong connection with Chinese film and TV stars, and the social elite which is an approach adopted by many of the top brands here. The support of ‘famous names’ is taken as a seal of approval by buyers across the country, as was the fact that a number of the Chinese films stars seen at this years Oscars were carrying Lana Marks bags.

From what would have been seen as an initially conservative approach in China, the brand has announced a very aggressive store-opening plan from now to 2015. In April and May this year, it opened two more stores, one in Shanghai the other, a second in Beijing. Four more are planned for the remainder of 2012, in Hangzhou, Shenyang, Chengdu and Xian. The brand claims that it will have 22 stores in China by the end of 2015.

There are two points that immediately spring to mind with the plan. The first is the choice of cities in which to open stores or at least the order of opening, particularly based on the target demographic the brand has. Hangzhou, Shenyang and Chengdu make sense, but Xian is still perhaps too immature to appreciate an ‘unknown’ brand of this type. The list of cities for 2013 onwards is also interesting, and includes obvious places such as Guangzhou and Shenzhen, but also cities like Qingyuan in Guangdong Province which has money, but into which other luxury brands have yet to enter.

The same question begins to arise as raised earlier in that is a brand that clearly positions itself as exclusive and for the limited few harming itself by going full ahead in terms of store opening in China, when in fact if it can support its celebrity status, those who have the money and taste will travel to a location other than their own in which to see and purchase the product? Considering that the prices of Lana Marks bags are higher than those of Hermes in China, there is probably no reason to open so many stores.

Once a perception is built in the minds of the Chinese consumer, it will be very hard to change it in the coming years. The strategy would appear to be a mix of following others that have gone before and adopting first mover advantage in tier 2 or 3 cities. The Lana Marks name is very young here, and a plan like this could be very costly if not supported by a huge PR machine. As yet, the luxury media coverage has been limited.


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