Luxury in Asia

Knowing that Shanghai and Beijing only house a small fraction of wealthy Chinese, luxury companies are gradually moving to lower tier cities, some of which have long been out of China’s fashion industry. Harbin, the capital of Hei Long Jiang province located at the tip of northeast China, is the latest example. For years, foreign brands were hard to be spotted in the city and local fashionistas even have to go to forums to ask where to buy high street fashion brands, or buy online at Taobao website.

On June 18, Hermes opened a store in the downtown shopping mall Mai Kai Le, showing the local rich the latest design from Paris. Its neighbors include Louis Vuitton and Amarni, both of which came to the city after Mai Kai Le’s opening in mid 2009. Upcoming retailers will include Dior, Gucci and Versace, according to the shopping mall. As a former fashion hub back in the 1920’s, Harbin was heavily influenced by Russia due to its location, which earned it a nickname – “Little Moscow”. After 1949, the city started to focus on developing heavy industries, such as transportation, aircrafts and power plants. Only in recent years has the local government accelerated the urbanization of the city, trying to reproduce its former glamour.

via Luxee.

Short film by Wing Shya, showing a collaboration with critically-acclaimed fashion label Rodarte, luxury brand SWAROVSKI ELEMENTS, and famous actress Maggie Cheung. Rodarte designers, Kate and Laura Mulleavy, have handmade four one-of-a-kind creations specifically for this charitable initiative. Each piece is inspired by Maggie Cheung and references one of her films: In the Mood for Love, Hero, Clean, and Heroic Trio. The four stunning pieces have been captured in a short film with music by Peter Kam.

JOYCE announce a charity programme in aid of UNICEF, a collaboration with critically-acclaimed fashion label Rodarte, luxury brand SWAROVSKI ELEMENTS, and famous actress Maggie Cheung.

Tokujin Yoshioka was asked by Maison Hermès to design this mysterious moving window display in Tokyo…

With a continuing boom in the market and rising demand from the newly prosperous, China’s luxury consumer market looks increasingly buoyant, according to the 2009 21st Century Deluxe Report.

The report shows a shift in Chinese consumers’ attitudes to luxury purchases, one that has seen them graduate from mindlessly chasing fashion to making far more informed choices – and even beginning to set international trends. In the long-run, says the report, the move to a more mature and knowledge-based consumption pattern in the luxury sector will add to its vitality and sustainability.

As a result, manufacturers in the luxury sector are now paying far more attention to the opinion and demands of Chinese consumers, swayed by their enthusiasm for such products and their more informed purchasing decisions.

Organized by the 21st Century Business Herald, a leading Chinese business daily paper, and supported by Ipsos, a global market research firm, and Fudan University-Bocconi’s fashion and luxuries management team, the report analyzed the behavior of China’s high-end business people – the newspaper’s primary readership group – with regard to luxury purchases. The report is aimed at promoting mature and informed decision-making throughout the luxury sector. During three months of extensive research, more than 150,000 individuals across the country responded to questionnaires about their purchasing patterns and the factors that influence them. In addition, the average number of daily visits to survey’s official website was more than 10,000, with nearly 1,000 online surveys filled in each day. The questionnaire, designed by Ipsos, analyzed a wide range of the target group’s defining characteristics, including industry preferences, purchase motivation, lifestyle choices and social standing. The raw data was subsequently analyzed by the Fudan-Bocconi team.

Professor Lu Xiao, head of the team and an expert in luxury brand management, interviewed scores of participants in randomly selected focus groups. The qualitative data sourced via these interviews, combined with a detailed analysis of the respondents’ opinions, allowed the professor to deliver in-depth insights into the sector. Alongside the report, the favorite brands of the business people surveyed have also been announced. The results show that the China Minsheng Banking Corp was the only Chinese mainland homegrown brand to make the list.

Commenting on the initiative, the event’s organizers said: “The essence of any luxury brand lies in the historical values it embodies. These values need to be continuously nurtured in order to retain their aspirational appeal across all cultural boundaries.”

LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury-goods company, on Monday said its third-quarter sales slipped 0.6%, hindered by the consumer-spending implosion and retailers working down inventories without ordering new merchandise. The luxury-goods industry likely won’t fully recover from the downturn until 2011 or 2012, consulting firm Bain & Co. said in a forecast released Monday. This year’s decline in sales of luxury goods, including apparel, jewelry and fashion accessories, will be steep, off 8% to about $227 billion, Bain predicts.

LVMH, a bellwether for the luxury-goods industry, declined to give a full-year profit forecast even though all of its divisions performed better in the first half. Steep declines in LVMH’s champagne and watches businesses brought sales down to €4.14 billion ($6.17 billion), off from €4.16 billion last year. “I don’t think we can say the crisis is over, but we can start to see the light at the end of the tunnel, even though the light is far away,” said LVMH Chief Financial Officer Jean-Jacques Guiony.

Claudia D’Arpizio, a Bain retail consultant based in Milan, said she expects the industry’s heavyweights—a group that’s generally defined to include companies like LVMH, Cartier owner Compagnie Financiere Richemont, and Gucci Group, part of France’s PPR SA—to hold up better than smaller players. Mr. Guiony said LVMH aims to increase its market share this year, spread out over categories from cognac to perfume, bags and jewelry.

The U.S. and Japan have been the toughest markets for LVMH’s star fashion brand, Louis Vuitton. But strong growth in China, where it has 30 stores, buttressed the brand’s sales growth, which topped 10% including the positive impact from currency fluctuations. Vuitton contributes nearly half of LVMH’s operating profit, analysts estimate.

Indeed, a projected 12% increase in 2009 luxury-goods sales in mainland China could partly offset declines elsewhere, Bain projects. Luxury brands across the industry are targeting China with new store openings.