Fashion luxury agency in China

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Which fashion brands are the most dependent on Chinese consumers?

Since several years now, China is becoming unavoidable for most of the luxury brands in the world. If before the government was very restrictive regarding the implementation of foreign brands on the country since 2000 and thanks to political and economic changes, China became the promised land for some of the most recognized luxury brands. In 2010, it was more than 40 brands that had entered the market.Nowadays, some luxury brands rely on Chinese shoppers as they represent a huge part of their revenue, and actually more when you take into consideration the purchases made outside of China, when Chinese consumers travel.

What about the yuan’s devaluation?

Thus when the yuan was devaluated at the beginning of August some luxury brands expressed their concerns.A downturn in China’s luxury spending can directly hit those companies dependent on Chinese consumers.Finally, the yuan’s devaluation shouldn’t cause as much troubles as it was predicted. China’s economy is still expected to grow in the coming year and the sales of luxury items should as well grow.

Which brands rely the most on Chinese consumers?

A new report from the Deutsche Bank showing us which are the most dependent brands on the Chinese market regarding their revenues just released and the results can be quite surprising.Here are the share of revenue for the brand in Mainland China:Share of revenues from mainland chinaSwatch, Ferragamo and Gucci are on the podium but are closely followed by Burberry and Hermès.If we look at the figures concerning the brand turnover among Chinese customers inside and out China, Swatch and Ferragamo are still on the top of the ranking:

Share of revenue from chinese consumers  How can we explain the popularity of those brands among Chinese consumers?

It’s actually quite simple to explain, these brands are communicating toward the Chinese consumers.They’ve succeeded in applying the “Think global but Act local” strategy. They know how to diffuse their values to Chinese consumers and how to do good branding.But the more important point will be that they are very active online, on the Chinese social media for example as some of them are very reticent on the West.Let’s take the example of Ferragamo which is very active on WeChat and Weibo. They are very good at entertaining their community and interacting with their followers.Here is one of their post on WeChat. They diffuse beautiful photos and achieve to have more than 7000 vues per post.WeChat_1440569871 WeChat_FerragamoOnline communication is very important as Chinese consumers are very active on social media? That’s why it’s an incredible breeding ground for brand looking to communicate. Luxury brands don’t have to be scared of communicating on social media.Even youngest brands should use this channel to establish direct communication with their Chinese consumers.Isla & Caraibica, the french luxury brand has understood that to be successful on the Chinese market, a brand must be active online. The brand is communicating on WeChat and Weibo as well that on famous online magazine such as Elle China. Public relations are as well an excellent way to increase its brand awareness on the Chinese fashion market.If you’re looking to establish a strategy to enter the Chinese market, you can contact us.

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