Niche luxury brands explode in China
Luxury in China is still growing. However we note that some brands established for a long time, have become less exclusive in the mind of chinese consumers. They are slowing for several consecutive semesters and see their popularity decline. On the contrary, new younger brands are entering the Chinese market. This late implementation in China creates a real interest in luxury consumers.
Traditional luxury brands hoisted the red flag
The most obvious example is the lower sales of the giant Louis Vuitton which is the flagship brand of the LVMH group. Its growth gets weaker for six consecutive semesters without managing to rebound. This counter-performance is due to the economic crisis that is stagnating sales in Europe, but also by a certain weariness of Chinese consumers. Indeed, Chinese are looking for exclusivity and new experiences, thus the famous brand is no longer “rare” enough for the Chinese. The loss of impetus of Louis Vuitton thus comes from the zero growth of the brand in China.
Niche luxury brands attract Chinese
While some iconic luxury brands slow, new and more dynamic, yet few established brands in China attract the desire of the Chinese. This is the case of Givenchy, famous for dressing Audrey Hepburn. Givenchy also belongs to the LVMH group, but is less known than Louis Vuitton in the Chinese market. More rarely, it animates curiosity. This is also the case for many other brands. Pucci, famous Italian brand, opened its first store in China last year, along with Stella McCarthney in Shanghai. These brands are now highly prized by the Chinese.
Use the web to find new brands
For new brands still little known Chinese web is a boon. Indeed, Chinese consumers are often connected (Smartphone, Tablet, Laptop). So for them, the web is a way to learn, to compare and to discover new products. Younger luxury brands looking to set up in China rely heavily on this tool to make a name. One of the most popular retailers of luxury goods in China, Shangpin.com, has also signed an agreement with the Fashion Council of America to allow Chinese access to U.S. consumer products. According to Xueyue Lang, vice president of Shangpin.com, this is a way to “help designers to gain popularity in China and to understand the growing needs of our customers by offering the main fashion of the world”. Read also our last analysis on that.
Niche brands represent a growing share of sales of fashion sites online. The brand Bottega Veneta grew 41.5% in 2012 in China. Finally, China is now the third largest market of the brand Saint Laurent.
Niche brands allow the Chinese to acquire an exclusivity sometimes lost, but they also allow brands to offer a wider range of choice for wealthy consumers who seek novelty. It could also be interesting to see the situation of made in China luxury brands.