Lifestyle aficionados ignore prices
Guo Jian'er
(November 15, 2004)

Major international brands in high-fashion and household goods are keen to identify themselves with the new lifestyles of an increasingly prosperous segment of the mainland population, especially in the major cities and coastal regions.

At the 6th China Daily CEO Roundtable Conference themed "Lifestyle China" held on Friday in Hong Kong, representatives of several well-known international luxury brands agreed that it is important they are seen as an integral part of the lifestyle of successful business people and professionals rather than just luxury goods.

"And the key is to translate desire into purchase," says Christina Hudson, marketing director of the consumer marketing division of DTC Asia Pacific Ltd.

As they strive to achieve a modern lifestyle, many Chinese consumers also have to wrestle with many choices nowadays. For instance, they may consider whether they should buy a car, a diamond, or a house first, because luxury goods lump together with household electrical appliances and other consumer durables.

"It's all about lifestyle especially when it comes to luxury goods," says Caroline Roberts, store director of Dolce & Gabbana Hong Kong Ltd. Why would Chinese consumers spend 12,000 yuan (US$1,446) on a famous-brand handbag when the average monthly salary might be at 3,000 yuan (US$361.45)? According to Roberts the answer is simple it is the lifestyle you desire.

Her company, she adds, constantly arranges overseas training for Chinese staff to give them a real touch of Western lifestyles. By so doing, the company hopes its staff can share their own experience of modern lifestyles with their Chinese customers.

As a matter of fact, the market for luxury goods, or the desire for pre-eminent lifestyle, is fast impacting some quarters in China.

According to a survey on Chinese women's shopping habits by Elle, the leading international fashion magazine, 34 per cent of its readers, usually white-collar office employees, say "they shop a lot because they love it, and 25 per cent say "they shop without counting," which is 10 percentage points higher than the world's average. In addition, it is more noteworthy that 40 per cent of respondents place work top of their personal achievements, much higher than the world's average of 22 per cent.

These are very impressive messages for the luxury goods industry. They indicate that Chinese women are increasingly independent, confident and they have a clear vision of what they desire, says Hugues Witvoet, senior advisor to LVMH Executive Committee.

Shopping is part of their lives and increasingly high-end brands will become their top priority shopping items, which is an underlying strength for the development of the luxury goods market in China, adds Witvoet, who is also chairman of the 6th China Daily CEO Roundtable Conference.

"Clearly, the luxury goods market in China is just coming of age," he says.

Recalling the company's rapid development from the first store in 1992 to its current 10 stores in major cities, Witvoet stresses that it has a long way to go to catch the robust demand for luxury brands in the country. "It has never been too late to join as the luxury industry in China is just starting up."

There are a growing number of Chinese people touring around the world for "genuine" luxury brands, making Chinese consumers a sort of ideal consumer like Japanese in the future.

Carol Chu, executive director of Mission Hills Group, agrees. "The trend of lifestyle in China has experienced a brisk development in the past two decades, and people have more time and choice for entertainment. For example, 10 years ago, karaoke and dinner might have been major recreational activities for Chinese. But now, playing golf has gained much popularity in the country," says Chu.

Lawrence Wu, general manager (Leasing) of Sun Hung Kai Real Estate Agency Ltd says China has developed much faster than had been imagined. Ten years ago Wu's company was designing huge bicycle parks for shopping centres, now they are demanding carparks.

Sharing his experience of promoting famous brands in China, Tommy Leung, vice-president of the Hong Kong Watch Manufacturers Association Ltd says that it is important to team up with local government and local media, not only to establish a presence in the mainland market, but also to effectively combat counterfeit goods.

The association, in collaboration with the Hangzhou municipal government, has set up a special counter for "Made-in-Hong Kong" watches at a major shopping mall in the popular tourist city in Zhejiang Province.

Victor Visot, chief executive officer of Hachette Filipacchi Asia-Pacific for Greater China, South East Asia & Australia, which publishes Elle, says the press has a significant role to play in lifestyle choices and boosting China's leisure market.

All those who attended the roundtable reached a consensus that the protection of intellectual property rights is probably the No 1 issue to be addressed.

Valeria Azario, brand manager of V.S. Ltd, which represents Italian brand Valentino, says the biggest obstacle for expanding its business in China is the lack of effective trademark protection.

China has more than 200 different Valentino brands, but only the Italian-originating Valentino belongs to luxury brand, she said. "The major task for us is to deliver a clear message of our positioning and differentiate our brand from other Valentino," says Azario.

China needs to concentrate on strengthening efforts to stamp out counterfeit products, warns Witvoet. "I do not believe there will be a strong long-term luxury market in China without a significant change in the protection of intellectual property rights."

 
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