Every luxury market will meet its own ups and downs.

Every luxury market will encounter its own ups and downs, Chinese consumers are also from "brand fetishism" into the maturity of luxury consumption, luxury consumption began to go into the conventional.

Shanghai Waitan has been China's first top consumer landmark, but also witnessed the rise and fall of the luxury trend.

2003, Giorgio Armani into the Waitan 3rd, from here officially entered the Chinese market. Italy's first-line men's clothing (Ermenegildozegna) also followed the Cartier (Cartier), the Asia's largest flagship store in Waitan 18th, and Hugo Boss,gucci, Marc Jacobs and other front-line brands have entered the Waitan, Waitan a certain number once become a luxury brand identity symbol, and shop rent doubled growth also let the original two or three line brand difficult to adhere to, have withdrawn.

2013, stationed in the 10-year Giorgio Armani flagship store evacuated Waitan 3rd, Dolce&gabbana was originally located in Waitan 6th, the flagship store closed, Patek (Patek Philippe) will Waitan 18th of the store moved to the distance Waitan not far from Waitan source 33rd. Hogo Boss, Boucheron (Boucheron) and other brands have been withdrawn Waitan.

After 10 years, "Waitan" from the hot to fall out of favour, and the major luxury brands in the Chinese market sales figures are no longer the red line, the Chinese market to give them is their different taste.

McKinsey has a survey of data, 2009 China's market 50% of luxury consumption from "gift-giving demand." As the policy winds change, more often than not, the watches and jewels that are used as "gifts" are also more strongly impacted.

In the Swiss official figures, Switzerland's total exports to China's mainland were down 26% per cent year-on-year in the 1th quarter of 2013. In the 3-quarter earnings of LVMH 2013, the jewellery and watch sector was particularly weak, with sales falling 2.3% from a year earlier, up from a year-on-year increase of 141% per cent.

China's luxury consumption in the brand craze to precipitate more rational and taste, the traditional luxury brands are also due to consumption weakness of the brand growth of the bottleneck period. LVMH's fashion and leather sector, which is based on brands such as Louis Vuitton, Fendi and Céline, has experienced a 0.6% decline in sales over the same period last year, with a 17% per cent year-on-year increase in performance. In the first half of the Kering Group's 2013-year earnings, Gucci's luxury brands grew only 1.6% to 1.7548 billion euros, but the Gucci market grew at around 17% 2009 years later.

Naturally, brands still maintain strong growth, but they have their own stimulus, without exception. With the brand's own strong competitiveness and product design, Hermès has maintained vitality, in the first half of 2013, Hermès in China's greater Chinese region year-on-year growth of 21%; Prada, which has always won a low-key luxury design, grew 20% in the first half of the Greater China region. In the digital field of investment and early matting into this period Burberry the biggest growth opportunity, in July announced the first quarter results of the new fiscal year, Burberry's retail business grew 18% year-on-year. Coach, which has been "light luxury" as a differentiated location, has become the biggest consumer in the depressed Chinese market, with sales rising 35% per cent in the first 3 quarters.

In addition to the original competition brand, the first wave of luxury consumption trend of the retreat and turn to become a new market opportunities for niche brands, Kering Group's Italian brand Bottega Veneta and focus on clothing YSL, they are emerging in the 1960s, the young brand, But it achieved 38.5% per cent revenue growth in 2012, and the market was even more than the market performance of the strongest years of traditional brands such as Louis Vuitton and Gucci.

Luxury brands will experience a brand development curve from a strong expansion to a steady growth, just as every luxury market will encounter its own ups and downs. For the Chinese market, traditional big-name brands have been from the past high-speed growth into a smooth, new niche brand followed by the rapid expansion of the brand. In the 2012 China Luxury Goods market research report released by Bain in late 2012, the Chinese market has also quietly turned to luxury consumption, ending 10 consecutive years of rapid growth, from 30% year-on-year growth to 2012 7%, and from emerging markets to a maturing turning point.

Out of the "show off" period

The market performance of luxury brands in China is naturally linked to economic growth and policy changes, but Bruno Lanna, author of Bain's 2012 China Luxury market research report, sees "changes in the demand for Chinese consumers" as a major luxury brands should now focus on.

If you look back at the 2011-year Chinese luxury consumption mentality, there will be a high degree of uniformity, in the "China Luxury Report" released by Bain in 2011, 70% of Chinese luxury consumers believe that luxury goods are an important symbol for social intercourse, with the value of comparison. But two years from now, China's luxury consumption mentality will be a more complex proposition, the luxury Industry analysis platform, the founder of the Alicia Yu said, "First-tier cities and two or three-tier city consumers show greater diversity, the first-tier city consumers for luxury choice more value from the self-starting material and design , but the two or three-line city consumer's pursuit of the brand is just beginning.

Luxury electric business Platform the founder of Sun Yafi, said, "Perhaps the first wave of luxury consumer groups in the ' herd effect ' to complete the purchase behavior, but after nearly 10 years of experience in the purchase of luxury goods, they look forward to other, more reflect the personality of products." In addition, the group is gradually entering the luxury consumer groups, the Light Luxury network released in August this year, "2013 years of light luxury fashion attitude report" shows the attitude of the "luxury": they no longer pursue luxury brands represented by the luxurious attitude, but more attention to design and fabric technology quality, Also pay more attention to the expression of self style.

Therefore, in addition to the popular high-end luxury brands such as Louis Vuitton, Gucci, Chanel or Hermès, the Chinese consumers ' original brand choice began to subdivide, more consumers began to form their own taste, and their focus shifted to Lanvin, Alexander Mcqueen,bottega Veneta and other domestic brands to set up a few stores, giving these original niche brands more market space, in the first half of 2013, these brands in the Chinese market achieved double-digit sales growth.

As Sun Yafi said, "China's luxury brand consumer groups are moving towards rationality at an unprecedented rate." A significant brand name may also be the target of China's two or three-line city consumers, but it has become an element of circumvention for consumers in Beijing and Shanghai. In a study by Bain, 65% of luxury consumers in Beijing and Shanghai are planning to reduce purchases of luxury goods with significant trademarks, and they are more concerned about the value of their brands than their own, even if they are designed and tailored to their own aesthetic.

In a survey of consumer sentiment, coach found that consumer sales of branded products were rising rapidly, with Louis Vuitton's LVMH group and Gucci's Kering group's first-quarter earnings report in 2013 The trademark obvious traditional leather goods in China's sales growth all is the single-digit number, but opposite Prada, Bottega Veneta and so on does not have the obvious trademark brand leather department to maintain the double-digit growth rate.

Laha Chaha (Radha Chadha) in the book "Top brand" has been the Asian luxury brand consumption mentality has been divided. The Chinese market has also gone through the "rich period" defined in the book, the middle class is shaping up and has the luxury of spending power, and then the people who enter the "show period" eagerly buy the brand that can show their economic power and are eager to show it, in the last 5-10 years of "show period", Luxury consumption will enter the state of irreversible rapid transmission.

Laha Chaha that consumers in the 3rd phase of the "adaptation period" in the formation of the luxury consumption of their own taste, from the brand to the pursuit of material and design, and ultimately stay in the "life", the consumption of luxury goods eventually precipitated as a way of life, and as the normal existence.

Despite the findings of the Bain consultancy, consumers in different countries differ in their spending mentality on luxury goods. More than 75% of French luxury consumers to product designer's work as the value of judgment standards, in the United States more than 65% of luxury consumers for self-directed consumption, consumer luxury is in their real need to buy, and the Japanese people more value the product itself and exquisite workmanship.

But the fashionable luxury markets in Europe, the US and Japan have entered a "life-cycle" of steady growth, according to Bain & Company, where the annual growth rate of luxury goods in Europe and the United States is 7%~9%, while consumption luxuries have become part of life habits. Part of China's luxury consumption is also beginning to go out of the "brand fetishism" general display period, with the rise of the middle class, they gradually from the pursuit of the brand to explore the needs of their own, and began to show the "adaptation period" consumption habits.

Luxury China "New Deal"

The development of luxury brands in fact needs to go through similar brand development curve, just based on the change of consumer environment and their brand life cycle, they need different brand strategy and market performance.

Alicia introduced, "for luxury goods, brand development strategy considerations are divided into online and offline, on the line is the expansion of sales scale, and the line is to achieve the profit margin." Any luxury in the entry into every emerging market, usually through the store expansion to pursue sales growth to reach the scale of the line, but once the original style of sales in the first batch of consumers to reach saturation, it can only modify the design, the introduction of new models.

Traditional brands such as Louis Vuitton and Gucci entered China as early as the 1990s, becoming the first luxury brand familiar to Chinese consumers, and in the past 20 years, they have been busy expanding new stores and scale layout, distribution network in the national market. It was not until the first half of 2013 that Gucci had opened 59 stores in mainland China, and Louis Vuitton's stores had reached 41, and they had completed the enclosure in the first round of store expansion, with the market saturated almost to the ceiling.

"The need for luxury stores is based on population density, per capita GDP and per capita disposable consumer income," Sun Yafi said, "and if too many brand stores are attracted to consumer groups that do not meet the target." So in 2013, Louis Vuitton, Gucci and other brands were suspended from expanding to provide consumers with new consumer stimulus.

Bernard Arnault, chief executive of LVMH, has publicly said that 2013 Louis Vuitton will stop the planned expansion of its stores in the two or three-line city. The Kering group also suspended the Gucci Chinese market's store expansion plan in 2013, and they have all shifted to reshaping the brand's high-end image.

According to Bain's analysis of the luxury goods industry this year, in contrast to the sharp decline in domestic luxury consumption, China's luxury goods consumption increased by 42% in 2011, or about 31% in 2012, while Chinese consumers have accounted for 60% of their total luxury consumption in the overseas sector, And that data is still growing.

So this year, the major brands have focused on the existing store renovation and renovation, to give customers a more luxurious shopping experience. Hermès's flagship store in the past 26 years on Milan via Sant ' Andrea has just moved to the Via Montenapoleone Monte Napoleon Avenue, where the store has expanded nearly 1 time times compared to the site, while Gucci also opened the brand's first men's flagship store in Europe at Milan Center Brera District, and Brera Art Museum and Art District.

In addition, these brands have been modifying product design, in line with the new customer base for quality requirements. Prior to 2013, the products of the printed handbags, with Louis Vuitton logo, contributed 60% of all sales of Louis Vuitton, but at the March 2013 Fashion Week in Paris, Bernard Arnault announced, "Louis In the future, Vuitton will reduce the frequency of interlaced letters appearing in the brand, and shift the focus of the future to more high-end products with specialty leather.

Gucci was earlier aware of consumers ' boredom with obvious trademarks, and since 2012 Gucci has been consciously reducing the appearance of trademarks, and the design style of products has become more cautious and introverted. In the Gucci product sales data, double g pattern product sales in recent years has shown a downward trend. In the newly released Gucci2013 autumn and winter Ladylock handbags series "Gucci" has become a lock on the minimum of retro design, but chose the crocodile, boa, ostrich, calf leather and other superior materials.

As the traditional first-line brands such as Louis Vuitton and Gucci are slowing, the Chinese market is shrinking its front line and turning to other markets, but there is still room for more cautious, more low-key brands to expand in China. In the Merrill Lynch data, Chanel only opened 12 stores in mainland China, and Prada has only about 20 stores in mainland China. These brands have remained the pace of expansion in China, and Prada plans to open 12~15 stores in China this year, while Hermès plans to increase the number of stores in the country from the current 17 to 25, although Hermès has given a deadline of 10 years.

Burberry, which has always been a digital strategy, seems to be paying more attention to online promotion than ever, while nearly 20% of sales growth shows the effectiveness of the digital strategy in the Internet era, and Burberry is able to extend the momentum of expansion, and 7 new stores opened this year, 2 are in Shanghai, This December Burberry will also open Asia's largest flagship store in Shanghai. This year, Burberry in the beauty fragrance market to promote the promotion of Baidu, Youku and even Sina Weibo cooperation, and even through the Burberry Chinese network to provide consumers with styles, colors and other design customized services.

As the overall economic growth slows down, more people-friendly light luxury products will always have better market performance. But 2013 for coach is a sad and happy year, coach in the Chinese market continues to rise, as coach this year's biggest bright color, but in the largest market in North America, but the growth is weak, 2013 years ago 3 quarter of year-on-year sales growth of 5%, straight shop with the store sales year-on-year level, and closed 4 stores in North America.

As Alicia said, "Light luxury brands are more likely to experience brand fatigue than first-line big-name is also more likely to be replaced", coach this year in the U.S. market performance may be the best early warning in the future Chinese market, so coach is undergoing a brand transformation, expanding the footwear and accessories and other new product lines, more prominent "Coach New York story". And coach this year launched the new brand significantly reduced, color and design more rich and active, more inclined to the young people's aesthetic, new coach design director Stuart Vevers is bringing fresh blood for coach.

In recent years, Alexander McQueen, Céline, Ralph Lauren and other brands have entered China, luxury brands in the Chinese market is also facing more intense competition. Bottega Veneta has been quietly expanding its stores in 2013, and is still keeping about 10% of its stores in China. Michael Kors, the US light luxury brand, grew 41% Year-on-year in North America in 2012, and Michael Kors, the only 13 stores in the Chinese market, remained weak compared with coach's 132 stores in China, but Michael Kors has launched an offensive against the Chinese market this year and has held a big fashion show in Shanghai, and Michael Kors, which has been expanding 30%~40%, will be the biggest pressure on coach.

Luxury brands follow a similar development curve, in the Chinese market, the old generation of Louis Vuitton, Gucci and other luxury nobles are moving from the peak of high-speed growth into a smooth, but there are more new brands to fill the original market space, and stimulate new consumer demand, Also repeated on the traditional brand peak period of two-digit annual sales growth, nature will always go through a number of brands rise and decline.

Three times luxury wave

In Bain's data, China's luxury goods industry has been growing at a rate of more than 20% since 2005, even in the 2008 years of global consumption, which has reached 115 billion yuan in 2012, and if the Chinese market is placed in the history of the world's luxury goods, Similar luxury-development booms have occurred in the 1960s in the United States and in the Japanese market in the 1980s.

Luxury goods have always been the keynote of European aristocratic life, and by the 1960s the United States had emerged from the post-war era and had prospered for nearly 10 years throughout the 60. "Famous brand First" describes the the 1960s U.S. luxury consumption environment, at that time, the annual income in 3~10 million U.S. middle class accounted for about 80% of the total population, they do not believe that the consumption of purses or watches is a luxury thing, the comparison of consumption is gradually being the pursuit of personal style, "more than the optimal consumption" replaced.

At that time, traditional brands such as Gucci and Chanel began to move out of Europe, and the authority of a handful of haute couture elites in Paris began to be reconstructed and moved into post-modern design and towards popularity.

In fact, many of Europe's senior fashion brands in the 1970s faced a brand crisis, by the Eighties or nineties of the 20th century, the European traditional luxury industry has undergone a huge change, they abandoned the traditional family business model, into a holding company, but also to the overseas market, 1984 Louis Vuitton, who also listed in the Paris and New York stock markets, merged with the Ming Yue Hennessy, formed the LVMH group and then started the group operation, while Gucci was listed in New York and Amsterdam in 1995.

The commercialization of luxury goods ran into Japan in the wake of the economic rise of the 1980s, when Japan's per capita gross domestic product surpassed that of the United States, and the Japanese began to splurge on European luxury goods, and Japan became the first emerging market for European luxury brands after the capitalist transition, Gucci, Louis Vuitton, Chanel and other European big-name companies in Japan to open flagship stores, Laha Chaha (Radha Chadha) has described the the 1990s Japanese craze for brand name, "on average 3 Japanese women have 1 people have 1 brands, of course, mixed with a goods."

The Japanese at that time, like the Chinese consumers now, would have completed their purchases in addition to the local market. In the luxury research report of J.P Morgan, more than 80% of the sales in the Louis Vuitton flagship store of Paris's Elysee were made by Japanese tourists, and this trend continues to the present. Japanese tourists have also boosted the turnover of duty-free shops in Hong Kong, South Korea and Taiwan, and driven the trend of luxury consumption in Asia.

History will repeat itself, after 2000 years, the Chinese market to take the U.S. and Japan's luxury consumption spree, become the 3rd luxury consumption of hot land, 2000-2005 years, China's luxury market began to rise, in Bain's data, the 2000 Chinese luxury market size only 2 billion yuan, However, almost every year before 2005, the annual compound growth rate of 60%~70% was increased, and the annual growth rate was never less than two digits before 2012.

As the center of the first two rounds of luxury consumer trends, the US and Japan, which ended the spike in growth, still maintained single-digit consumption growth and became the main mature battleground for luxury brands, while China ended the 3rd round of high-speed growth, which fell to 7% in 2012, and Chinese luxury consumers began to "brand fetishism" Go into the maturity of luxury consumption, even after this process will take many years.

There were data that said, "when the average monthly income of 1500 U.S. dollars, the demand for luxury goods began to start, when the average monthly income of 2500 U.S. dollars, luxury consumption rose sharply", but this foreign luxury consumption structure of the change law does not apply to the Chinese market, in the United Nations Economic Commission for Europe report, In 2011, when China's luxury consumption entered its peak, the disposable income per capita of Chinese urban residents was 1840 yuan, about 288 dollars.

In the research data of Bain Consulting, the mainstream consumer group of Chinese luxury goods is younger, they focus on between 25~45岁, this average is 15 years younger than European luxury consumer, 25 years younger than American. The average level of world luxury consumption is 4% of personal wealth, but Chinese consumers will use 40% or even greater proportions to pursue luxury goods.

Perhaps China's third wave of luxury consumption has ended, can no longer be 30% of the annual composite growth rate, the consumer boom gradually into a smooth and conventional, but in the accumulation of social wealth, new consumer groups will continue to appear, two or three line market has not yet fully expanded, China's consumption of luxury goods will continue to grow for a long time.