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CHINESE WHISPERS: Luxury brands hoping to tap into the Chinese market must be cultural curators as much as marketers. That was among key messages delivered at a conference held in Paris by agency BBDO Beau, the luxury arm of BBDO Worldwide, on Jan. 24.
Guest speaker Huang Hung, chief executive officer of China Interactive Media Group, one of the country’s most influential bloggers and a WWD columnist, cited the case of Chanel’s ongoing exhibition in Guangzhou as an example of how brands can educate Chinese consumers about the luxury world.
“Our education system does not give a decent background in European history, art and art history,” she said. “Such events give that.”
Brands must find ways of sharing their stories with Chinese consumers, she said, building bridges that will help boost brand awareness among middle class customers, increasingly the core consumer for luxury houses in China.
The ongoing crackdown on gifting among China’s upper classes means less ostentatious, more intimate luxury is increasingly important for that consumer base. As such, high-end brands are increasingly turning to the growing purchasing power and optimistic attitude of the middle classes.
BBDO China director of strategic planning Hans Lopez-Vito noted that China’s one-child policy now means there are more men than women in the country, putting increasing pressure on middle class men to show their success through ownership of luxury goods in order to attract women.
“Luxury goods are a symbol of male potential potency, growing the demand for luxury in the middle-class market,” he said.
Women are also increasingly earning more than their husbands and buying luxury products for themselves, whereas in the past luxury goods were mainly purchased as gifts, he said.
Brand awareness is also growing, both through the Internet and the increasing numbers of middle class Chinese travelling abroad, giving opportunities to more niche brands. “Being middle class does not necessarily mean a lack of knowledge and sophistication,” Lopez-Vito said.
He warned, however, that Chinese customers are little interested in brands tagged as “affordable luxury”, preferring to shop from a mix of mass and luxury offerings. “Brands offering ‘accessible luxury’ will not be compelling enough for China’s middle class,” he said. “Brands that target the middle class must avoid the middle ground.”