Mongolia’s New Chinese-bolstered Luxury Market in 2020
Mongolia isn’t a country commonly associated with luxury. Its nominal per capita GDP sits below that of Armenia, Tuvalu and Sri Lanka. Its only real city, Ulaanbaatar, is the planet’s coldest capital and often its most polluted. But some of the world’s biggest luxury brands are betting on it. Chinese consumers are the trump cards Mongolia is counting on. And the crisis simmering in Hong Kong promises to serve as an unlikely catalyst. Over the past year, Rolex, Versace, Burberry and Gucci have all established bases in the capital. Commercial buildings housing luxury outlets, such as the Shangri-la Mall, are becoming a more regular sight. Meanwhile, Mongolia saw a 19 percent increase in Chinese visitors in 2018, and a 15 percent rise in sales of luxury products that industry insiders say simply can’t have been driven solely by the domestic market. Overall, retail sales rose by 22 percent, to $2.9 billion, according to latest figures.
Read the complete article by Ben Halder at Ozy.
China Luxury Market Booms on Better Pricing
China’s market for personal luxury goods is set to grow 26% this year, more than six times the global pace, as Chinese consumers continue to make up some of the world’s strongest buyers of high-end handbags, makeup, shoes and other designer products. Sales of personal luxury goods in China, which does not include big-ticket items like cars, are expected to reach 30 billion euros ($33.4 billion) this year, according to the annual Bain-Altagamma 2019 Worldwide Luxury Market Monitor report published on Wednesday. By comparison, the global personal luxury goods market is expected to grow by a much slower 4% this year to about 281 billion euros, according to the report. Bain attributed the modest worldwide growth to concerns about the global economy and uncertainties in the global environment. By comparison, China benefitted from an ongoing policy by many luxury brands aimed at reducing price discrepancies between their goods sold in China and those sold elsewhere. In the past, the same luxury goods often sold for far more in China than identical products in other countries, leading many Chinese to do their shopping abroad.
Read the complete article by Shen Xinyue, Zhang Zhilin and Yang Ge at Caixing Global.
Hermès-backed Chinese luxury brand Shang Xia bags Tribal for SG launch
Hermès-backed Chinese luxury brand Shang Xia has appointed Tribal Worldwide Singapore for experiential and marketing duties. Tribal’s lead Jeff Cheong has also been chosen as Shang Xia Singapore’s first creative brand consultant outside of its Shanghai headquarters. This foray into experiential marketing is part of Tribal’s Total Experience (TX), which brings together core consulting practices such crafting bespoke consumer experiences, business consulting and creating social content, to help businesses grow in the digital and experience economy.
Read the complete article by Farzanah Farveen at Marketing Interactive.
Tiffany expects double-digit growth in China after reopening in Shanghai
Tiffany places its bet in the Asian market. The American company, acquired by LVMH this year for 16.2 billion dollars, expects double digit growth in China next year after reopening its store in Shanghai, according to the company’s chief executive officer, Alessandro Bogliolo, during an interview in Bloomberg. Tiffany’s growth forecasts in China happens at the same time of the opening of its largest store in Shanghai. After refurbishing in the last months, the store has reopened its doors this week doubling its commercial space. Its flagship store has two floors and its located in Huaihai Street, one of the most central and commercial streets in the city. Tiffany’s chief executive officer believes that the company’s sales will benefit from Hong Kong measures and “all the efforts the Chinese government has done to increase local consumption, like the decrease of the sales tax, of course is an incentive for Chinese customers to purchase locally instead of flying to Japan, the US and Europe to do their purchases.”
Read the complete article by Staff at MDS.
China’s “Quality Crackdown” Puts Coach, Tory Burch in Crosshairs
Longtime observers of China’s fashion and luxury markets are well aware of the country’s occasional, highly publicized crackdowns on the quality of imported foreign brands, which often coincide with periods of tension with the U.S., Europe, Japan, or South Korea — or a mix of all of the above. This week, amid signs that the a U.S.-China trade deal is highly unlikely in the near term, the Shanghai Market Supervision Bureau announced the results of a “random quality inspection” on 125 batches of clothing in Shanghai. According to the bureau, 23 batches failed to meet their quality standards, with brands such as Tory Burch, Coach, Tommy Hilfiger, and DKNY called out for missing the mark.
Read the complete article by Avery Booker at Jing Daily.
Inspired by China, Panasonic gets back to its innovative roots
Panasonic is expanding its presence in the vast Chinese market through an ethos of “constant change” — the same approach it taught China 40 years ago, but now it is the Japanese company learning from its former pupil. The electronics giant is building a new plant to manufacture home appliances in China, the company’s first such investment in 16 years, bucking the growing trend among global manufacturers to shift production out of China amid a bitter trade war with the U.S. Despite slowing growth of China’s consumer electronics market, Panasonic believes its in-house China & Northeast Asia Company will be able to achieve strong sales growth in a market with great breadth and depth, which the company expects to be a center of innovation that will rival the U.S.
Read the complete article by Itsuro Fujino at Nikkei Asia.
China’s newest luxury hotels – A look inside
The Chinese consumers’ expensive taste is driving growth of the luxury market and fueling a boom in luxury five-star hotels in cities across China. The number of wealthy Chinese recently surpassed the number of wealthy Americans, according to Credit Suisse. The survey found 100 million Chinese in the world’s top 10% of richest people, while the United States has 99 million in the same bracket. “The Chinese luxury traveler is the most booming segment of luxury in the world,” said Craig Smith, Marriott International’s group president for Asia-Pacific, who oversees more than 750 hotels in the region. “The Chinese customers are very well educated. They’re much more now into personalized service,” said Matthias Terrettaz, general manager of the Bulgari Hotel in Shanghai.
Read the complete article by Uptin Saiidi at CNBC.