China’s Super Rich to Rise By 80% in Next Decade

china wealthy

According to a report by Knight Frank LLP, the number of Chinese super-wealthy, those who own more than US$30 million in assets (excluding their main residence), will grow by 80 percent over the next decade , Global Times reports.

China will have over 14,200 ultra-wealthy individuals by 2024, which will rank China 13th in the world in terms of the number of multi-millionaires. This would place Hong Kong, Shanghai, and Beijing as third, fifth, and sixth, respectively, as the cities with the most ultra-wealthy people.

According to Thomas Lam, the head of research and consultancy at Knight Frank, “The Chinese mainland will have a growing presence on the list. And Hong Kong will enjoy the advantage of being the unofficial bridge that connects the Chinese mainland and the rest of the world in the next decade.”

The rise of the super-wealthy in China is also driving up the prices of luxury real estate both in China and abroad. In fact, high-end residences in Beijing increased in price 17 percent in 2013 to reach US$17,100 per square foot after only a 2 percent gain in 2012.

The high-end real estate boom has also carried over into international markets. According to Knight Frank, China’s super-rich contributed 13 percent of the United States’ and 30 percent of Australia’s inbound capital to each country’s property development markets in 2013.

“The economic meltdown in 2008 and 2009 dealt a hard blow to high-end residential and commercial properties in North America and the UK,” said Thomas Lam. “While a buyer needs to pay 70,000 yuan to 80,000 yuan per square meter for prime office space in Beijing, he only has to pay 30,000 yuan to 40,000 for a similar property in the US or Europe. That motivates multi-millionaires to buy abroad.”

So far, the Chinese real estate investments are concentrated in second-tier foreign cities such as Houston, Texas and Birmingham, England. The only thing holding back these investors is a lack of understanding of local property markets and laws, and many of these Chinese investors are looking for foreign partners for assistance in these areas.

 

Original Article in Red Luxury

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Counterfeit luxury goods move further upmarket in China

 

A Louis Vuitton store in Fuzhou, Fujian province. (Photo/CNS)A Louis Vuitton store in Fuzhou, Fujian province. (Photo/CNS)

When people in China carry designer bags bearing the logos of Louis Vuitton or Gucci, they are often asked whether they authentic or counterfeit. Now the country’s makers of counterfeit luxury goods go a step further by offering “tailor-made” services and have even opened “high-end private clubs” on social media sites, our sister paper Want Daily reports.

Little Min, manager of a luxury bag shop in Haikou’s Top United, sells various levels of counterfeit luxury bags and even offers tailor-made counterfeit bags priced at more than 8,000 yuan (US$1,300), or even 10,000 yuan (US$1,650) each, according to a Beijing media report.

Min said her shop can offer a tailor-made Hermes Crocodile Birkin Bag, a genuine edition of which is sold for more than 100,000 yuan (US$16,500), but the counterfeit she sells is such a fine imitation, complete with identification certificate, that not even experts can tell the difference, she says. The counterfeit bag sells for less than half the price of the genuine article.

35-year-old Xiao Li (pseudonym), in addition to being a civil servant has a part-time job selling luxury goods via WeChat, where she sends photos of the latest designer bags and watches to her circles of friends. Xiao said it costs from several hundred yuan to more than one thousand yuan to make one of her bags in the factory, to which she adds a 20% mark-up.

In total, Xiao has opened four friend groups each with about 150 people. Her client base enables her to make as much as 10,000 yuan (US$1,650) a month, she said.

Tencent’s QQ platform is another battlefield for counterfeit luxury goods. Previously, most such sales were conducted on Alibaba’s Taobao website but as Taobao has implemented stricter regulation, many sellers of counterfeits have moved elsewhere, Xiao said.

On QQ, only her good friends or new friends introduced by regular clients can see the information of the counterfeits she posts, Xiao said.

People in China have become the world’s top consumers of luxury goods, according to a report on the 2012 Chinese luxury goods market published at the end of 2012 by Bain & Company. Chinese nationals accounted for one quarter of global luxury goods sale in 2012, but high domestic taxes meant that 60% of these purchases were made overseas.

 

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The global retail store is dead, claims BCG

Prada space at Dover Street Market New York

NEW YORK – New York and Milan were among the global cities ranked as “understored,” meaning that there there are too few stores to meet consumer demand, while Beijing, Bangkok and Chengdu, China were among the global cities ranked as “overstored” in a new report from the Boston Consulting Group.

The “Shock of the New Chic: Dealing with New Complexity in the Business of Luxury” report asserts that consumer interests are fragmented along far too many lines for a brand to have identical stores in different locations. Also, the nomadic nature of luxury consumers forces brands to reassess the nature what each store should achieve.

“If I had to simplify in one word, I would say complexity,” said Jean-Marc Bellaiche, BCG senior partner, New York. “We believe that the global store is dead.

“Brands can be both more localized and globally very consistent,” he said. “Luxury players can offer some specific events or products in, for example, the New York City store versus their Shanghai store, while still being consistent with specific events/products that are fully aligned with the brand DNA.” 

BCG’s “Shock of the New Chic” report measures the current luxury status and growth potential of the world’s 550 richest cities as defined by GDP per capita and draws survey data from 10,000 core luxury consumers in 10 countries.

New face for each place
Complexity has entered the luxury space through changing demographics that favor new models of “reciprocal” marketing, evolving technology, maturing markets and other variables.

As consumers and markets climb up the maturity ladder, there is a movement from tangible objects such as cosmetics, watches and bags to fleeting experiences.


Guerlain’s 68 Champs-Élysées boutique

For brands dependent on retail sales, this means that each store should have a different atmosphere, product assortment and purpose to foster unique experiences.

Companies can no longer rely on homogeneous global campaigns. Instead, brands should adopt a granular and hyper-responsive approach to retail spaces, according to BCG.


Interior of Burberry’s Beauty Box

BCG emphasized that a store in New York should have a different product assortment than a store in Houston. After all, consumers in both these cities have distinct shopping patterns and if the store is shaped in a way conducive to these patterns, then sales will likely rise.

Also, the shopping habits of tourists must also be factored in, adding further complexity to the equation.


Valentino Uomo menswear flagship in Paris

Among Brazilian and Chinese consumers, more than 50 percent of luxury goods are purchased abroad. Consequently, store locations within these countries may benefit by acting as showrooms and introductions to the brand.

BCG suggested that brands add more retail locations in cities such as New York and Milan to account for waves of tourism, while many Asia-Pacific cities were deemed to be filled with too many stores.

More discerning
Additionally, consumers are becoming less deferential to brand opinions and prefer to gather recommendations from social media and word of mouth. Forty-four percent of global purchase decisions are influenced by word of mouth and social media.

Fifty-three percent of of surveyed consumers said that the Internet influenced recent purchases. Seven percent made purchases purely online, eight percent researched in-store and purchased online, while 38 percent of those surveyed said that they researched online and made a purchase in-store.

While this research challenges the traditional role of retail spaces, brands have tremendous room to grow if they are up to it.

“Experience in-store is becoming increasingly important, but it can complement selling a product,” Mr. Bellaiche said.

“For example, customization and following the process of building your own product can combine both objectives,” he said.

 

Original Article (with video)

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Female Fashion Addicts Change China’s $19 Billion Market

 

BY BLOOMBERG 30 JANUARY, 2014

Louis Vuitton in Shanghai | Source: Flickr

BEIJING, China — Lisa Yan is the new face of the Chinese luxury consumer: female and fashion-forward.

The 26-year-old finance saleswoman checks social media daily to see what celebrities or friends are wearing. She wears Burberry coats, alternates between a light blue Valentino bag and a black Dolce & Gabbana one for work, and reads magazines such as Vogue before trying to replicate the newest styles.

While women have long dominated luxury shopping globally, they’re just now catching up with men in China, who historically had greater purchasing power and accounted for most business- related gift giving. Companies from Chanel to LVMH Moet Hennessey Louis Vuitton SA are stepping up to meet demand from the country’s new breed of female “fashion addicts,” dedicating more floor space to women’s wear amid a crackdown on expensive gifts such as watches.

“Its a rebalancing of the consumption between females and men,” said Mario Ortelli, a senior analyst at Sanford C. Bernstein in London. “Women are becoming more independent, becoming richer, and so are buying for themselves.”

Men accounted for 90 percent of China’s high-end purchases in 1995, according to industry consultant Bain & Co. Women now make up about half, Bain said in a report last month. That still trails the global average in mature markets, where female consumers account for about two-thirds.

Bain estimated China’s domestic luxury market to be worth 116 billion yuan ($19 billion) last year.

‘Fashion Addicts’

“Luxury buying by Chinese women is driven by jobs and peer pressure,” said Yan, whose collection also includes bags from Louis Vuitton and Saint Laurent Paris. “These are items we’ve eyed in the past and now are able to afford. We also see friends around us carrying these things.”

A growing group of “fashion addicts” in China will continue to fuel the trend toward women’s high-end apparel, according to Bain’s report. These are Chinese consumers — mostly female, middle-income professionals in larger cities such as Shanghai, Beijing, and Guangzhou, who shop for personal use and are knowledgeable about fashion as well as luxury.

“The fashion addicts are well informed and looking to stand out from the crowd,” Bruno Lannes, Bain’s Shanghai-based partner, said in an interview. “They are a lot more into fashion than accessories, bags or watches.”

Getting China right is a high-stakes play for the luxury companies. After outpacing growth in the rest of the world for years, spending on the mainland — which excludes Hong Kong, Macau and Taiwan — grew at the slowest pace last year since at least 2000, according to Bain, after President Xi Jinping started a campaign to rein in lavish spending. Chinese people are also increasingly shopping abroad, where prices are lower.

‘New Era’

Spending on expensive menswear and watches both fell in China last year, data from Bain shows. Meanwhile, demand for women’s wear, cosmetics and perfume increased 10 percent, making them the fastest-growing categories in China’s luxury-goods industry. In contrast, apparel sales are declining as a percentage of global luxury sales, according to Bain.

“Nobody expects any changes to government policy,” Lannes said of China. “That’s why it is the beginning of a new era, and brands have to rebase their business.”

Retailers such as Louis Vuitton and Chanel have set aside more store space in China for fashion apparel, while Hugo Boss AG, Coach Inc. and Tod’s SpA are expanding women’s wear collections in the country.

Overseas Buying

Although Chinese customers are the world’s biggest luxury buyers by nationality, accounting for 29 percent of high-end purchases last year, mainland sales have slowed as Chinese shoppers now buy more than two-thirds of their items overseas, according to Bain.

Prices are between 30 to 40 percent lower in Europe and as much as 25 percent lower in Hong Kong, according to Bernstein’s estimates.

Chanel’s black leather Sac Classique bag sells for 35,200 yuan in China, according to the company’s local website, while it sells for 2,950 euros, or the equivalent of about 24,400 yuan, in a boutique in Paris.

Refocusing on women’s fashion can help luxury-goods makers counter the overseas-buying trend, Bernstein’s Ortelli said.

“You can postpone the buying of a watch or piece of jewelry,” Ortelli said. “But if you have an important dinner today, you don’t go to Hong Kong to buy your dress.”

‘Own Money’

Still, ready-to-wear apparel has its drawbacks. Gross profit margins are at least 10 percentage points lower than those for leather goods, analysts from HSBC Holdings Plc and Bernstein said.

“Diversification is a good thing to revive interest and drive sales,” said Erwan Rambourg, Hong Kong-based managing director and global co-head of consumer and retail research at HSBC. “It’s obviously less positive in terms of margins and returns on investment.”

With apparel and shoes, brands have to carry different sizes and need more space to display them, Rambourg said. Apparel retailers also tend to hold sales at the end of a season, he said.

Still, shoppers like Carry Zhuang, a 32-year-old who works in the media industry in Shanghai, are grabbing companies’ attention as a way to overcome the slowdown.

“We earn our own money,” said Zhuang, dressed in a black blouse and skirt and carrying a Ferragamo leather bag, while shopping in the city’s IFC Mall, home to luxury stores from Chanel to watch retailer IWC. “And we want to spend it on something we like.”

By Liza Lin with assistance from Andrew Roberts; Editors: Terje Langeland, Celeste Perri

Original Article in BOF

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2014: THE YEAR OF INDIVIDUALISM FOR CHINA’S LUXURY CONSUMERS

A street style shot of model Fei Fei Sun taken for Vogue at Paris Fashion week in September 2013. (Vogue)

A street style shot of model Fei Fei Sun taken for Vogue at Paris Fashion Week in September 2013. (Vogue)

With the Chinese government’s anti-corruption campaign in high gear and a global shift away from logos, 2013 was all about “stealth wealth.” Instead, we can now expect an emphasis on self-expression and individualism among Chinese luxury consumers, with several developments paving the way for a focus on shaping one’s personal taste.

“Stealth wealth” may have emphasized blending in, but this coming year, Chinese luxury consumers will be searching for ways to differentiate themselves from their peers. However, think nichenot bling. The government austerity drive continues and many wealthy consumers are striving to avoid the label of baofahu, or nouveau riche.

While this year’s slowdown led to Bain & Company’s estimate of 2.5 percent luxury sales growth for the China market, many smaller labels are nonetheless seeing sales rise by double-digit rates. Businesses have decided that now is the time to act upon this trend: niche label-heavy retailers 10 Corso Como, Lane Crawford, and Galeries Lafayette all recently opened mainland locations.

Smaller multi-brand boutiques are on the rise in both the brick-and-mortar and e-commercespheres. Digital outlets for self-expression such as fashion blogs and new social media platforms will shape tastes in the year to come, and retailers are offering more special-editionand bespoke items, as well as VIP services, to Chinese clients.

Brands should also take note of this trend’s global implications. More Chinese tourists aretraveling independently as their international luxury spending grows, meaning that attracting these individualistic clients to stores abroad is just as important as doing so at home.

This article appeared on Luxury Society for its annual Luxury Industry Predictions from the Experts“ feature. 

 

Original Article in Jing Daily

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In China, Luxury Is About More Than High-End Labels

The Financialist 

china luxuryREUTERS/Kim Kyung-Hoon

Guests drink champagne as they wait for the start of a fashion show held at the Ming Dynasty City Wall Relics Park in Beijing, June 21, 2013.

 

There was a time, not too long ago, when all a luxury goods maker had to do to make a sale in China was to make sure their label was prominent enough. Customers wanted quality, of course, but what they wanted as much or more was the caché that such a purchase conveyed. Those days are over. Like the Chinese economy itself, the country’s luxury goods sector has matured. What matters now is style—and it matters a whole lot more than you might think. Chinese buyers now account for about a quarter of all global luxury goods sales, a larger share than any other country, according to Credit Suisse’s luxury goods analyst Rogerio Fujimori. The success or failure of a high-end brand now depends as much on satisfying the whims of China’s increasingly discerning consumers as it does on the Fashion Week in New York or Milan.

For proof of this fact, one need look no further than Apple’s gold iPhone 5s. The precious metal is an important signifier of affluence and upward mobility in Chinese culture, so much so that China is poised to overtake India this year as the world’s largest gold importer. Despite questions from skeptical Apple-watchers in the lead-up to the launch, it turned out that the Cupertino tastemaker once again knew better than the rest of us, and Chinese customers have been in a frenzy to get their hands on what they see as the ultimate status-symbol accessory since its release in September—iPhone sales in China surged 25 percent year-over-year in the quarter ended Sept. 28. Chinese media have gone so far as to dub the new phone “Tuhao Jin,” which translates as “local tyrant’s gold.”

So Apple is in on the streets of Beijing and Shanghai. What’s out? The logo-emblazoned designer handbag. Louis Vuitton developed the Chinese market from scratch when the brand opened its first store there in 1992, but according to the latest China Luxury Survey from Credit Suisse, its logo-heavy wares are starting to lag more subtle latecomers. “Louis Vuitton and Gucci are more established in China than other labels,” explains Fujimori. “But today, they’ve got real competition. Prada, in particular, is doing well with its less flashy, more low-key style.” Others making inroads, according to Fujimori: Bottega Veneta, Burberry, Chanel, Coach, Hermès, Tiffany, and Hong Kong-based Chow Tai Fook.

The challenges facing two other storied brands, Rolex and Cartier, are quite different. “Luxury watchmakers have been hit hard in the last 15 months,” Fujimori says. Watch companies selling mid-priced timepieces, on the other hand, such as Tissot and the rest of the Swatch Group, are excelling. That’s not because wealthy customers suddenly can’t afford Rolexes – it’s because of a major crackdown on official corruption by China’s top leadership. That, in turn, put a brake on sales of the high-end timepieces that served as the gift of choice for those seeking to curry favor with government officials.

Coach and Tiffany are the only American luxury brands currently hitting the right notes in China, says Fujimori. And the powers that be have taken note: U.S. Vogue editor-in-chief Anna Wintour felt the need to encourage American brands to make a bigger push in China during a November 2010 speech at the Central Academy of Fine Arts in Beijing. Not that Wintour had exactly raced there herself – the trip was her first-ever visit to the country.

Luxury brands have another problem in China, though, and it’s that unlike in the U.S. and elsewhere, Chinese women do not necessarily do what Anna Wintour tells them to do. That role belongs to a bevy of local actresses, models and retailers, such as 25-year-old Liu Wen, the first Asian model to walk a Victoria’s Secret show in 2009, and who was dubbed “China’s first bona fide supermodel” by the New York Times last year. A black leather jacket from a capsule collection called ‘The New Icons” that Wen helped design for H&M sold out rapidly.

With 57 million fans, 34-year-old actress Yao Chen is the most-followed person on Sina Weibo, China’s enormously popular microblogging service. When she posts photos or comments from a fashion show, her preferences are re-shared by millions of young women. Vogue China’s editor-in-chief Angelica Cheung is also an active user, as are Wen and another popular model, Sun Fei Fei. Savvy brands have embraced the service, too. Louis Vuitton launched a Weibo presence in October 2010, followed in 2011 by Burberry, Chanel, and Gucci.

Earlier this year, high-end online retailer Net-a-Porter launched a Chinese site helmed by Adrienne Ma, the youngest daughter of Hong Kong fashion maven Joyce Ma. The elder Ma opened Joyce Boutique in 1970 and brought labels like Prada and Giorgio Armani to Hong Kong. Her daughter wants to do it all over again in China, but this time over the Internet, selling currently hot brands like Miuccia Prada’s Miu Miu and the French label Chloe.

While broadband access and e-commerce are both skyrocketing in China, consumers have yet to fully embrace the purchase of ultra-expensive goods online. That’s for three reasons, says Fujimori—concerns about authenticity, the desire for a sumptuous shopping experience and a price advantage that comes from buying abroad. “In China, you need to worry more than in other countries about fakes,” he says. “Plus, luxury shopping is all about the experience.” Many shoppers choose to have that experience overseas, rather than online. The Chinese are buying more luxury goods in Europe than ever before, partly because international travel is on the rise, but also because luxury goods are actually cheaper in Paris or Milan than in Beijing or Shanghai. Still, the desire to serve customers who can’t or don’t want to wait for a European vacation to splurge has created fierce competition for prime retail locations in Shanghai and Beijing, proving that brick-and-mortar is still king in the Chinese world of high-priced designer clothes and accessories. “Perhaps more than any other market, flagship stores really are the face of the brand in China, so you need to be in the right location,” Fujimori says. Stores are ramping up customer service and offering VIP areas and special events, he explains, all aimed at maintaining an air of exclusivity for well-heeled shoppers.

If Chinese consumers’ new selectivity has made it a little harder for luxury goods makers to make each and every sale, the good news is that the total number of those sales is only going to get bigger. China is home to less than 4 percent of the people worth $1 million or more in the world, but the proportion is expected to rise to nearly 47 percent by 2073, according to Credit Suisse’s Global Wealth Report, which projected how the world’s wealth distribution would change in 60 years if current growth trends continue. It’s always hard to predict how tastes will change in a rapidly expanding market, but one thing is for sure – as European fashion houses and other luxury purveyors shape their lines in coming seasons, it will be with Chinese consumers in mind.

Read more: http://www.thefinancialist.com/a-label-isnt-enough/#ixzz2r9CTKrff

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HOW BRANDS CAN NAVIGATE CHINESE FASHION BLOGGERS’ ‘RED ENVELOPE’ CULTURE

Han Huohuo, one of China's most influential fashion bloggers. (Sina Weibo/Han Huohuo)

Han Huohuo, one of China’s most influential fashion bloggers. (Sina Weibo/Han Huohuo)

“So what do you think about the brand?” I asked the extravagantly dressed Chinese girl I had just been introduced to at one of Shanghai’s Fashion Week parties. “No idea,” she replied. ”You know how these things work—I show up, I tweet, they pay me. No one even told me how to pronounce the brand’s name.”

I later discovered she was one of the KOLs (key opinion leaders) invited to attend the event and endorse the brand, a practice that is now essential to any China digital marketing strategy. In fact, as Chinese consumers’ brand discernment increases, so does the demand for significant points of view online. In the spotlight of this phenomenon are KOLs that, under pressure to create quality content, demand more and more meaningful experiences from brands.

Why KOLs matter

In a country where mainstream media is heavily regulated, more and more consumers have turned to social media to find guidance on trends and style. Becoming a so-called “expert” requires no particular background or education in the Chinese internet world; influential power stems from consistent content curation and strong opinions that can stand out from the chatter of the country’s more than 500 million Internet users. This is quite a daunting task, as 40 percent of China’s online shoppers read and post reviews about products—more than double the number in the United States.

Keeping fans loyal is also a great challenge: just as in the offline celebrity world, opinion leaders’ popularity is ephemeral, and it is up to marketers to constantly monitor the web for influential characters whose opinions have tangible commercial impact.

And their efforts work. Recently, French fashion brand Maje sold out a skirt of its latest collection in less than 24 hours because a blogger had posted a photo of herself wearing it on Sina Weibo. A pleasant—and free of charge—surprise, to say the least.

What makes China different

Unfortunately, fortunate coincidences do not happen frequently, and the power of influence usually comes with a price. Or a price list, rather.

Customarily, journalists are offered a standard amount of money—a “red envelope”—in exchange for press coverage. This is a grey but accepted practice that is also applied to the online world, where bloggers have a standard price list that varies depending on factors such as how many fans they have on their blogs. Prices can range from USD$150 for reposting tweets up to USD$5000 for generating original content and endorsing products.

Paying makes influencer engagement a more predictable investment. However, in the online world, it is proving more detrimental than helpful. If treated as a commercial exchange, influencer engagement has slowly lost any kind of “socialness”, the spontaneity and honesty that made these fashion bloggers popular in the first place. In a race to create “buzz”, brands in China forget that to win the hearts of their consumers, they also need to win the hearts of those their consumers are meant to trust and follow.

How to engage the 2014 Chinese blogger 

The reality of today’s Chinese consumer is one of sophistication, refinement, and knowledge. Fashion bloggers are even more discerning consumers who seek uniqueness and meaningful experiences to stand out from the crowd. Giving out a red envelope is not enough.

Recently, blogger Peter Xu was invited to participate to a store opening of French fashion brand Sandro in the recently opened Galeries Lafayette in Beijing. To his surprise, this time, he was asked for something different than the usual instruction to “look good in front of a backdrop and repost our tweets”. He was asked to use the new collection to style the event attendees for a photo shoot. Guests were later sent their photo through WeChat and could share it on their own social networks.

This was a simple concept, but one that allowed the guests to feel pampered and special, and the brand to experience tangible results from a store opening: 33 percent of the customers purchased the products after the activity. For once, the KOL felt recognized for his fashion sense and, most importantly, instrumental in bringing results to the brand he supported.

A few key tips

“Red envelopes” for KOL endorsements are not going to end. But the results of influencer engagement are going to be increasingly dissatisfying unless brands provide experiences that are truly meaningful to the designated brand ambassadors, bringing back the “social” into social media.


A Sicilian accent, an Italian passport, a UK degree, and four years of China digital strategy experience. Giulia leads business development at Fireworks, a Shanghai-based consultancy agency specialized in the fashion and luxury industry. She loves talking about Chinese social media, making lasagna, and connecting people.

 

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The Four Drivers of E-Commerce Growth in China

ecommerce_20140115

The rate of China’s e-commerce growth continues to take many by surprise.

China’s large and growing middle-class are making frequent purchases online. More importantly, they are “developing brand awareness, an increasing proclivity to purchase high quality and/or individually satisfying products, and showing a commitment to brand loyalty and repeat business,” according to a recent publication from KPMG.

KPMG believes that e-commerce in China is driving a new consumer culture. That is echoed by Alibaba founder Jack Ma who says e-commerce is not just “a way to shop but a lifestyle.”

There are four drivers of e-commerce growth in China: e-commerce platforms, social media platforms, digital payments platforms and mobile devices.

They are transformative, both for the industry and for consumer behavior, “including the way they [consumers] research and order products online, and their preference for speed and convenience.

Social media platforms have become a staple in the lives of Chinese e-consumers with almost instantaneous feedback and easy-to-use interfaces. According to recent e-commerce statistics in China, 40 percent of China’s online shoppers read and post reviews about products – more than double the number in the US.

“Accompanying the rise of e-commerce in China is a clear trend towards mobile devices. In 2012, mobile transactions totaled US$7.8 billion, representing 3.7 percent of all e-commerce transactions in China. However, by 2015 mobile commerce in China is forecasted to more than quintuple, to US$41.4 billion, representing eight per cent of all e-commerce transactions,” KPMG said.

China’s e-commerce market is dominated by Alibaba, owner of Taobao and Tmall. Although not as well-known outside China, Alibaba sold more merchandise (in terms of value) in 2012 than Ebay and Amazon combined. By 2016, Alibaba expects to surpass Walmart as the number one retailer in the world.

According to KPMG, “By 2015, e-commerce transactions in China are projected to hit US$540 billion, or 7.5 per cent of total retail transactions, and by 2020, China’s e-commerce market is forecasted to be larger than those of the US, Britain, Japan, Germany, and France combined.”

 

Original Article in red Luxury

 

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Recycled buzzword tuhao shows changing attitude of newly rich

Suppose you are clad from head to toe in name brands.

You wear a Versace shirt underneath a Giorgio Armani jacket. Your Hugo Boss slacks are fastened with a belt from Hermes.

On your wrist is a Vacheron Constantin watch. An LV bag dangles from your shoulder.

You strut on the latest TOD’S ballet flats. All these fashion items are topped off in extravagance with the new golden iPhone in your hand. Then get prepared for making heads turn on the street, and in rare cases, even encouraging someone audacious enough to approach, circle his arm around your shoulder, and say, “tuhao, let’s be friends!”

Until recently, tuhao wasn’t the favored word to greet those Chinese fond of displaying wealth.

Literally translated as “rustically rich,” it became a popular substitute for nouveau riche virtually overnight.

It seems that the phrase tuhao has colonized the Internet since early September, as there are references to it here and there all over cyberspace, especially in chat rooms and web forums.

The phrase owes its popularity to the online gaming community, where players use it to mock fellow gamers who buy expensive virtual “equipment” to compensate for their mediocre skills.

Tuhao quickly caught on as a buzzword in social media.

As it gained traction, tuhao replaced nouveau riche in describing, unflatteringly, those bling-bling Chinese who shop till they drop overseas but hardly have any class or sophistication to show for their conspicuous consumption.

Evolution of neologism

The rise of tuhao as a new social class has attracted media such as the BBC to probe the evolution of the neologism.

In fact, tuhao isn’t a new invention, but has fairly recent and revolutionary origins.

During the land reform era in the 1950s, tuhao specifically referred to the landlords and gentry that bullied those beneath them, as BBC reported.

So this word often evokes the unsavory image of a despicable landlord mercilessly crushing his social inferiors.

The redux of tuhao is notable in the sense that the term has been largely stripped of its political connotations, although the negative undertone remains culturally.

Members of the Chinese online community have an uncanny ability to find new usages for old language, and for tuhao, they have adapted it in a way that no longer encapsulates the antagonistic, class-struggle view of the wealthy, but suggests more of a love-hate relationship.

Still, tuhaos are sneered at for their loud manners and gaudy tastes, but that very disparagement is usually tinged with light-hearted humor and jealousy.

Nowadays, whenever someone draws attention by mindless flaunting of fancy purchases online, he or she usually gets called a tuhao, to be followed, at times, by the catchphrase “let’s be friends!”

Besides placing themselves at the pointy end of people’s ire, the clan of tuhao is also stoking such feelings as envy, jealousy, self-mockery as well as aspirations to join their ranks.

My personal experience

I have experienced those feelings from time to time.

As an amateur saxophone player, I often come across people online showing off their vintage Selmer Mark VI, a coveted horn that could cost as much as 100,000 yuan (US$6,250) if it comes with the best serial numbers.

My fingers ache to type tuhao at the sight of those beauties, only to find there already are dozens of the same scornful remarks that precede my proposed comment.

From nouveau riche and “coal boss” to tuhao, the coinage of terms to label, mock, and denigrate the upper crust has demonstrated the traditional Chinese derision of getting rich yet staying crass, which is a good indicator that Chinese remain true to their ancestors’ philosophy of moderation, despite how consumerist society has become. Naked displays of extravagance still are cultural anathema.

But the partial endorsement of tuhao also signifies a resignation to the hard reality of a highly unequal society, where the gap between rich and poor is yawning. In some sense, the slogan “tuhao, let’s be friends!” is reflective of the attitude of “if you cannot beat them, then join them.”

Resentment and hatred of the rich has long been said to be a dangerous undercurrent in China, with the potential of causing social unrest. But the peaceful emergence of tuhao and similar buzzwords points to a contrary view — that the undercurrent may not be necessarily murderous.

Rather than targeting the rich with a knife, people have taken up a cultural weapon to poke fun at their social betters, and maybe also at their own financial desperation. And deep inside some may even envy tuhaos for their success and wealth.

Birth of neo-tuhao

Recently, there have been interpretations online of what constitutes the 10 criteria of neo-tuhao. The 10 criteria include substituting Buddha pearls for gold chains,  wearing linen garments and cloth shoes rather than suits and ties, and riding a bike instead of driving a Mercedez.

The criteria vary across regions. The ones listed above apply to Beijing and Shanghai.

While it’s easy to laugh it off as simply a joke, talk of the new tuhao actually embodies the hope for qualities lacking in some uncouthly rich Chinese. Of course, there is no guarantee that an affluent man wearing Buddha pearls and chanting incantations is humbled by religious faith and genuinely espouses modesty.

However, no matter how oxymoronic and pretentious the neo-tuhao standard is, it indicates approval of identification with something more positive and healthier and the desire to distance oneself from the crass paleo-tuhao.

The intriguing thing is that the majority of those asked online about their association flatly reply that they don’t qualify as neo-tuhao. Apparently the labeling game is taken to a higher level than many can reach.

For astute observers, new buzzwords that pop up regularly are a barometer of changes in mass psyche.

Adaptation of tuhao as a legacy of the revolutionary era hints at the increasingly clear-cut stratification in China.

Tuhao has come back with a vengeance. It sarcastically captures the social fault lines that underlie public discourse. Its bling will likely glitter for some time to come.

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HARRODS’ CHRISTMAS WEIBO CAMPAIGN ENGAGES LONDON’S CHINESE TOURIST INFLUX

 

For Harrods' new Sina Weibo campaign, fans must find presents hidden by the retailer's iconic "Green Men" in the store and upload photos for the chance to win. (Harrods)

For Harrods’ new Sina Weibo campaign, fans must find presents hidden by the retailer’s iconic “Green Men” in the store and upload photos for the chance to win. (Harrods)

As London sees a huge influx of Chinese visitor spending thanks to efforts by both the UK government and retailers, luxury department store Harrods is engaging its Chinese visitors with a new online-to-offline (O2O) Sina Weibo campaign for Christmas.

Last week, the retailer launched its “Harrods Christmas Treasure Hunt” campaign, which was kicked off when Harrods’ iconic “Green Men” hid three Christmas gifts around the store printed with the Sina Weibo logo.

With the help of a printed Chinese-language store guide, Weibo fans and store visitors are tasked with finding each of the three locations in-store and uploading photos of themselves with the Christmas presents. One winner will be chosen to receive all three luxury gifts: a Harrods Steiff bear, a bottle of Laurent-Perrier Champagne, and an Aspinal of London luxury leather travel collection that will be specially monogrammed with the initials of the winner. The followers will be given one clue per day on Harrods’ Weibo page until the winners are selected on December 24.

Harrods_Treasure Hunt_Launch Image

The campaign is aimed at both Chinese visitors to the UK as well as the significant existing UK-based Chinese population, and is being supported by leading Weibo travel influencers to extend brand awareness to future visitors to the UK. Harrods is known for its early adoption of Chinese digital marketing tools: it was was one of the earliest UK retailers on Weibo, and in September 2013, became the first major UK retailer to launch an official presence on WeChat.

These marketing efforts are likely to be highly beneficial to the retailer: Chinese visitor spending has already grown by a stunning 132 percent this year, and is expected to keep climbing.

 

Original Article by Jing Daily

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