The luxury-purchasing trend in China

The capability of Chinese consumer purchasing luxury product is increasing quickly. Based on the report of Analysis of Chinese luxury Purchasing 2013, Chinese people spend over 100 billion to purchase luxury products. There are some data could illustrate the purchasing power of Chinese consumer. Last year, Chinese people bought 47% luxury products of the world. They spend most 28 billion in luxury purchasing inside China and nearly spend 74 billion overseas. Chinese people obviously are the biggest consumers of luxury purchasing in the world.

On the one hand, this situation happened most because the development of Chinese economy and increasing of Chinese people’s salary. It enhances confidence of Chinese people to purchase luxury products in order to improve their living quality and to maintain friendship. On the other hand, the situation is because of largely entering of European luxury brand. In 2012, the luxury market was close to saturation. From 2013, some of luxury brand began to ender second level city of China.

However, from forecasting of experts, Chinese people will be more rational in luxury purchasing in the future. As far as I know, Chinese people began to discard some first level luxury brand. They chose luxury brand more rational. Although the purchasing scale of luxury products in China is still in improvement condition, the rate of increasing is in descending trend.

In my opinion, Chinese people will choose more low- pitched luxury brand in the future. Within the improvement of their living quality, they will become more confidence about their taste. They don’t want to show off. This tendency could be proofed by the popularity of Italy brand Bottega Veneta. There is no logo and some special iconic on the surface of its handbag and wallets. But why Bottega Veneta became so popular in China? I asked some of my friends who bought one or more BV’s products. They told us that they bought them because like hand-knitted leather and their brand story. It is from a classic Italian family, who lived in a beautiful town in Italy. Chinese people like this brand because they like the lifestyle that BV brings to them.

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(Taking from http://www.esquire.com/blogs/mens-fashion/bottega-veneta-book-102312)

 

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Topic 2 The future of consumer behavior

In the future, marketers will connect with consumers not just through email, cellphone or other general communication skills. They will connect with consumers through any channel. Marketers could contact consumers through any electronics, which could connect to Internet. For instance, in the future refrigerators in kitchen could connect to Internet.  Consumers could reflect using experience and feedback just using refrigerator itself. There will be a bigger screen in refrigerator in the future, size like mini pad. It will be more convenience for consumers and marketers contact each other.

About the contact ways and shopping methods, I believe marketing in future will keep lots of same methods. Consumers are willing to shop in physical store like currently. Their basic consuming behavior will not change in the future. There is impossible consumers will buy everything online. For instance, if they want to buy a dress, they should go to retail store to try. Even online store will provide more authentic review and model same as your size, consumers still can’t trust.

Also, the basic connecting ways that marketers contact consumers will not change in the future. Marketers will still use Internet to contact consumers. It is undeniable that fact to face communication through marketers and consumers will not disappear. Consumers need face-to-face communication in some particular situations.

With the development of technology, our consuming behavior and communication method will improve. Marketers will collect more data of an individual consumer. Marketers could collect data through every electronic that connect to Internet and make a thorough analysis of consumers’ shopping habit, needs and wants. Based on more detail segmentation analysis, they will design personality products. For instance, in the future oven in you kitchen will connect to Internet. So your oven could collect you using habit and your using model. So the company who product your oven could update you oven function based on your using habit or they could design your personal oven.

Also, Delivery Company will operate more humanization. They could make a special delivery plan based on habits of individual consumer. Also, consumer could manage their shipping date and receive date.

I believe our shopping experience will better within the development of marketers connecting ways and technology.

Topic1 Online store and Offline Store

When I was in China, I seldom did on line shopping. The biggest reason is most online stores lack of standardization. There are not too much online stores in China, especially famous brands. However, the situation is different in US. For instance, I always bought skin care products in physical stores. Because products like Lancôme and Estee Lauder didn’t provide online shopping function. I should to buy such products offline.  But in US market, almost every brand has their online store.

My favorite store, which could shop online and offline, is Neiman Marcus. The reason why I like shopping in Neiman Marcus is that I could buy every thing that suit for my taste in this store. The store collected together all the products that I need use in my daily life. I concern more about products quality not quantity. Commonly, I would rather like buy one product that contain high value than buy some products that each one contain little value. Neiman Marcus sells luxury stuffs. Also it sells high quality apparel, accessories, jewelry, beauty and home products. The most important is Neiman Marcus also provides all different brands for my need. It provides thousands choices.

I especially like its online store. Unlike some common online shop store such as Guess, Neiman Marcus provides different brands of products and pictures to help customers make decision. As a consumer, When I need to try a product such as clothing and shoe I will go to physical store to buy. However, when I just buy a skin care product that I usually use I will buy it online. In conclusion, I will go to physical store only if I need to try some products. Neiman Marcus sometimes will provide some special discount online, which is not exist in physical store. At this time, I will definitely choose online store to purchase products.

When I was shopping online, I would perform more sanely to make a purchasing decision. Because most of time I could not make sure the function and material of a product. For instance, if I’m surfing the Internet and attracted by a beautiful dress. I looked the picture that a model dressed. I would consider the material of the dress and suitability of the dress. I still concerned about the size, because some of clothing were larger or smaller than a casual clothing. Finally, I didn’t purchase this one and save money. But when I tried the clothing in physical store, maybe I will be attracted by the clothing and tried. In different result, I would by it. So the biggest different of online shopping and offline shopping is that you could not try it. This various would change your decision.

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(Taking from http://niftyba.com/2012/07/29/neiman-marcus-guerlain-and-champagne/)

11.11 Big sale in China

The meaning of Nov.11 for Chinese people is like that of Black Friday for American.

This festival was first began from a sales promotion from TaoBao, which is Chinese eBay. TaoBao is most famous online store for selling everything. I remembered on my undergraduate stage, young people began to celebrate Nov.11. The reason why young people celebrated Nov.11 is it was written like 4 sticks. Stick in China means single person. So every Nov.11, young people are doing some shopping to celebrate single day.

Marketers grasped this opportunity to make sales promotion. Sals companies gave customers discount to attract customers to buy more products than common days they would buy. What business man focused was quantity of products. People could buy a lot of this kinds of product for consuming. So this sales promotion method is not suit for selling luxury products.Image(Taking from http://content.businessvalue.com.cn/post/15650.html)

The first Starbucks store in China closed

 

 

 

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( Taking from http://ilonggang.sznews.com/lgnews/content/2013-06/22/content_8210407.html)

In the end of June 2013, first Starbucks store was closed in China. It was located in Guomao Beijing. The next store that instead of Starbucks located in this area is a luxury French brand named GOYARD. It is selling luxury handbags.

This Starbucks store was full of younger generations’ memory. Lots of young people fall in love and had sweet chat in this store. Before this store, Chinese people did’t know Starbucks and dislike the taste of coffee. This stores mean a lot for many people. But why Starbucks disappeared in this area?

There is undeniable that this Starbucks store have many loyalty consumers and maintained busy every day. However, the rental fee is further  than it incomes. Although there are a lot of customers in this store, they can not cover the rental fee!

This is a typical tendency of Chinese rental market. Guomao Beijing is located in the hottest location in Beijing, where is the capital city of China. You can not image a 100 square meter store will cost ¥600,000. In this location, only luxury brands could afford the rental fee. That’s the most important reason why Starbucks closed in Guomao Beijing.

German Luxury Cars in China

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(Taking from http://www.caranddriver.com/photo-gallery/2013-audi-s6-vs-2013-bmw-m5-2012-mercedes-benz-e63-amg-comparison-test)

Audi, Benz, BMW are three most popular German luxury car brands in China. These three brands occupied most of the luxury car’s market due to their high quality and excellent branding. In China they were recognized as the symbol of rich and successful. However, the percentage of market share of Audi, Benz and BMW are different, even if they are extremely similar brands. 

In China, Made in German usually known as high quality.  Chinese mid-class and rich people love German cars not only because they were good but also conflict with cultural recognitions. Japanese also made excellent cars like Lexus, Infiniti and Acura. But China used has a war with Japan.  So, Japanese car is not first choice of Chinese buyer.

In this case, Audi, Benz and BMW have huge opportunities in China thanks to the growing economy of China. However, Audi has the biggest market share, BMW is the second, and Benz did not doing well. In contrary, Benz has the biggest market share in luxury car all over the world. And Benz is the first luxury car that come in to China in 1980s.

Why Benz cannot open the market of China? First of all, they did not meet customer’s need in China Long wheelbase cars are more popular, because people who sitting in the back of car are more comfortable. But Benz thinks long wheelbase would decrease the turning ability of the car and increase weight. Clearly, Benz wants to build the best car but ignored the customer requirement.

Secondly, BMW aim to the younger generation who was born in 1980s, most of them were the only children of family. So, their parents are welling to buy a BMW as a gift to them. BMW’s branding ideas is to be the car with most fun when you driving it.

Finally, the latest model of Benz E-class car just arrived China. Sell 6500 cars in September, while Audi A6L selling 12900 and BMW selling 8500 cars. When the E-class just arrived they begin to make 5% off the price, make the customer think the quality of car is not good. And some say the smelling of Benz is not good, so they give a air perfume as a gift when you brought a new car. However, customer believed that the smell of Benz is really bad. Why I should buy a car with a bad smell?

In a word, the market strategy of the Benz is not clear, and failed to meet the customer’s need. Furthermore, luxury car should not on sale when they just came to the market even through the selling is not good. An expensive car should be perfect, should not have any excuses.  

ZARA in China

Zara entered China near 2005. The first retail store was opened in Shanghai China. Then a new era of fashion came to China. The design from Zara effluents lots of young people and brings a Fashion trend.

When I was an undergraduate students, the most favorite brand of clothes thing is Zara. Every Friday, my friends and I will go to commercial district to celebrate coming two-day weekend. We did some shopping, enjoyed restaurants and have sweet chat with each other. We will spend a whole afternoon in Zara, because there are hundreds designs and relax fitting room environment.

Why young people especially aged between 17-25 love Zara so much in China? In my opinion, the first reason is the latest design. Zara have over 400 designers. They are active in every fashion shows. What is the new season color, what is the next season fashion trend. Zara’s designers will not lose every fashion trend signal. Zara has unimaginative design update velocity and manufacture speed. Secondly, Zara has thousands design, which is triple or hundreds times design compare to other brand. You could always find one design you like in Zara. Finally, the decoration of Zara’s retail store is really cool. It was decorated based in dark and soft color. The dark color will make you more comfortable when you shop here.

Zara’s business model is really an successful case! We love Zara not only because of its low price but its luxury design!

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(Taking from http://www.newlifeinspain.com/2013/01/zara-zara-zara.html)