The Alfred Dunhill label operates more than 100 stores in China. According to its executives, 40 percent of the brand’s global sales come from Chinese pockets. But Alfred Dunhill has lost its pizzazz – a fate that insiders say may befall many other designers in China.
The problem seems to be that Dunhill didn’t storm the market as much as flood it. The large number of stores means savvy and sophisticated consumers in first-tier cities look elsewhere for exclusivity – the company can no longer claim to embody British luxury with the likes of Kent & Curwen and Drakes London now in China.
This “points to an issue many brands will face in China — i.e., maintaining their cachet with those [consumers] adopting new ideas, styles, brands without alienating the core consumers they grew up with,” Torsten Stocker, Greater China Partner at the consulting firm Monitor Group, said.
But Dunhill is fending off its critics. “We do have quite a bit of credibility with the local customer,” said Dunhill chief executive officer Christopher Colfer. “We just needed to dial it up a bit more, and that was the reason for [opening] the Dunhill Home here.
Many Chinese consumers think Dunhill is sending a mixed message: the Shanghai Dunhill Home store embodies ultra-luxury, but no other store comes near its level of sophistication. “I can understand maybe why that would come about and potentially we have the same issues in London,” Colfer said. “You can’t replicate this [in a shopping mall]. It is just not possible.”
If store design is a moot point, Dunhill is looking to step up its game in other ways. Recently, the label hosted an event in Shanghai called “Trafalgar.” The show was billed as an “exhibition in the form of installation and unique presentation.” Like a Burberry event held last year, Dunhill used visual imagery technologies to create images of London and the city’s changing seasons. These images were projected onto large screens placed in front of a podium shaped like Nelson’s Column, a monument in Trafalgar Square.
The show seemed designed to update Dunhill’s image for the Chinese consumer. The models who stood on the podium while animations of changing seasons and of the London cityscape were projected on the screens in front of them were all Asian. Gongs and Chinese drums were played during the performance, which was about 15 minutes long. Music from Tan Dun, a Chinese composer, was also part of the musical serenade.
Dunhill’s efforts didn’t go without rewards. Of the thousand or so who attended, there was a noticeable turnout from Taiwan, Singapore, Britain and Hong Kong. Moving forward, the label will focus on expanding into smaller markets in China. Colfer said the brand plans on buying back more of its stores from its franchise partners and also plans to open at least 30 stores over the next couple of years. Another flagship store is slated to open soon in Beijing.
Alfred Dunhill’s branding troubles go to show that a label’s tradition is not enough to earn sway in China; brands must also adapt to the needs and tastes of the Chinese consumer.
We are seeing in China the “Luxury trap” . Brands have to choose between growth (and if you are in the stock exchange, that is a must) and exclusivity. Selling more to more people in order to increase profits is not compatible with exclusivity. Maybe sell the same amount of products, but more expensive? At this moment geographical growth is the way to go.
photo credit: alfred dunhill, luxury insider