British luxury fashion brand Burberry has set its sights on China and is doing everything to tap into the growing luxury market in the Far Eastern country. On Wednesday night, the clothing brand held a concert at the Beijing Television Centre to showcase and celebrate the launch of the brand’s flagship store in Beijing. Local VIPs, suppliers and shoppers attended the invite-only high-profile do. There were about 1,000 guests at the event, which had Keane providing the music, even as techies projected holograms of models among real models during a real-life runway show.
It is not often that the launch of a new store is accompanied by such a gala. But you have to remember that luxury fashion brands are going to want to extend their reach within the Chinese market in the coming years. Projections by investment-research firm CLSA Asia-Pacific Markets suggest that China will become the largest luxury market in the world by 2020 with sales over $100 billion. Is it any wonder that other brands like Miu Miu and Chloe are also gradually spreading their fashion branding tentacles in the Chinese market? In fact, Burberry has already hired 50 Cantonese- and Mandarin-speaking sales reps to run its stores across China and in countries where Chinese tourists shop, said Burberry chief executive Angela Ahrendts.
The UK-based luxury brand is also going digital with a vengeance. Burberry has already been increasing its presence across Chinese social media sites like Kaixin001, Douban, Youku and Sina Weibo. Colleen Cheng, senior VP and national business director of Ogilvy Public Relations Worldwide China admitted that engaging in the digital channels is “critical for any brand that hopes to make an impact in this market”. Young consumers helped push up the profits of Burberry’s e-commerce ventures fuelling a 95 percent jump to $82 billion in China in 2010.
There is more from the tech front on Burberry, which is desperate to shed its stuffy tag in a bid to woo younger Chinese customers. According to consultants McKinsey & Co., in China, 73 percent of luxury buyers are below 45 years. In the US, that age group comprises 50 percent of luxury buyers. Meanwhile, 45 percent of high-end buyers in China is below 35 years of age compared to 28 percent in Western Europe. The scales of the luxury industry are slowly shifting to emerging markets in the east, convincing luxury fashion brands like Burberry to invest $40 million in emerging markets. Much of this will be in digital upgrades. For instance, Burberry plans to give its staff in Chinese outlets Apple iPads to help them track sizes that are not in stores. Plus, the company will be fitting its 57 retail stores in China with touchscreens the size of full-length mirrors. These will showcase special lines and beam Burberry fashion shows from across the world.
According to Ahrendts, Burberry’s current fastest-growing market is China. In five years, it should become the UK fashion brand’s biggest market. Of course, Burberry is not alone in wanting to tap the Chinese audience. Other fashion brands have also joined the China bandwagon.
Via: The Wall Street Journal