08
Jan
2013

Italian and French brands benefit from a long-term strategy in China

If you ask a Chinese consumer where luxury products come from they will always say France and Italy. As one of the ‘P’s’ in marketing place has always been important, and in China international places are no less important. Both the French and Italian luxury sectors and their governments have spent many years establishing this image in the minds of the Chinese consumer, and in recent years it has paid dividends.

For those of us with a big picture view of luxury, we of course know that luxury products do come from elsewhere on the planet, but the mindset of the Chinese is solidly focused on these two nations. Show a consumer a new product, or introduce them to a new brand and they will first ask the country of origin. Anything other than France or Italy starts to become a hard sell, because of an establish trust in luxury product from both these countries.

So what are brands to do from elsewhere in the world? The simple answer is as with much in China; adopt a long-term strategy and ensure your name is seen in the media frequently. Position yourself, in the consumers mind against brands they know, both in terms of quality and price, and be prepared to be knocked down more than once. The French and Italians have been there already and are now benefiting as a result.

According to the Italian luxury body Altagamma, the value of luxury goods exported by Italy over the Christmas period was 18 to 23 billion Euros, accounting for 20% to 25% of its annual export value, China and some of its Asian neighbours being the major contributors. The French luxury sector grew 10% overall in 2012, and 7% overall within China. The long-term strategy is clearly paying off, and making it harder for other luxury producers to close the gap.

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