Recapturing China's Old Nobility

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How to build a Chinese Luxury brands? Presentation delivered at the China Luxury Summit 2010 in Macau

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Recapturing China's Old Nobility

  1. 1. RECAPTURING中国’S OLDNOBILITYBuilding a Chinese Luxury BrandPresentation delivered at the China Luxury Summit 2010 in Macau 1 1
  2. 2. China, arguably the world‟s most important luxury market 2010 © BBDO/Proximity Live China An Omnicom Group Company. 2
  3. 3. 12010 © BBDO/Proximity Live China An Omnicom Group Company. 3
  4. 4. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 4
  5. 5. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 5 Sources: Cap Gemini/Merrill Lynch World Wealth Report, TNS, KPMG, Credit Suisse
  6. 6. 2010 © BBDO/Proximity Live China 6 An Omnicom Group Company.
  7. 7. Given the importance of China as a market, many brands have begun toacknowledge the country more explicitly 7
  8. 8. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 8
  9. 9. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 9
  10. 10. Yet, the market for luxury is stillpredominantly all about Western brands 2010 © BBDO/Proximity Live China An Omnicom Group Company. 10
  11. 11. So, why aren‟t there enough Chinese luxury brands? 2010 © BBDO/Proximity Live China An Omnicom Group Company. 11
  12. 12. To answer this, we need toexplore two interrelated themes 2010 © BBDO/Proximity Live China An Omnicom Group Company. 12
  13. 13. 1 Besides having „first-mover advantage‟ in the Chinese luxury market, what can truly explain the “pull” of western brands? 2Are there applicable lessonsfuture Chinese luxury brands can glean from? 2010 © BBDO/Proximity Live China An Omnicom Group Company. 13
  14. 14. Of Royalty Of Imperial SupremacyA legacy of serving nobility Allowing them to export their culture; and to assimilate other countries into their way of life Of Experience and Expertise Craft skills and traditions passed along from14 one generation to another
  15. 15. “The King of Jewelers”2010 © BBDO/Proximity Live China An Omnicom Group Company. 15
  16. 16. “Serving the British Royal Household for Generations” 16
  17. 17. “Breakfast at Tiffany‟s” 2010 © BBDO/Proximity Live China An Omnicom Group Company. 17
  18. 18. HISTORY =GRAVITAS 2010 © BBDO/Proximity Live China An Omnicom Group Company. 18
  19. 19. China, more than any other country, also has a long and rich cultural heritage it can truly be proud of 2010 © BBDO/Proximity Live China An Omnicom Group Company. 19
  20. 20. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 20
  21. 21. But China‟s is a history that involves a period of significant social upheaval 2010 © BBDO/Proximity Live China An Omnicom Group Company. 21
  22. 22. Besides the relics we see in museumstoday (and what are sold in art auctions)… …nothing is left of the armies of cooks, couturiers, craftsmen, and artisans who have served the Imperial household and the scholar bureaucrats, all of which could have been the seeds of vibrant slew of Chinese luxury brands 2010 © BBDO/Proximity Live China An Omnicom Group Company. 22
  23. 23. For Chinese luxury brands to emerge inthis modern age, they will have to create a totally different path to glory… 23
  24. 24. From our research among affluentChinese, we have identified six (6)possible hot-buttons when creating viable Chinese brands in luxury 2010 © BBDO/Proximity Live China An Omnicom Group Company. 24
  25. 25. 1. Get the Quality Right2010 © BBDO/Proximity Live China An Omnicom Group Company. 25
  26. 26. FOCUS ON GETTING THE QUALITY RIGHT … The product 2010 © BBDO/Proximity Live China An Omnicom Group Company. 26
  27. 27. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 27
  28. 28. 1. Get the Quality Right 2. Materials that China is Proud of2010 © BBDO/Proximity Live China An Omnicom Group Company. 28
  29. 29. USE MATERIALSTHAT CHINA CANBE PROUD OF 2010 © BBDO/Proximity Live China An Omnicom Group Company. 29
  30. 30. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 30
  31. 31. Elevating the Product into a Brand There is a Choice Between … 2010 © BBDO/Proximity Live China An Omnicom Group Company. 31
  32. 32. A Retrospective View of Chinese CultureImbuing the new brand with the values and aesthetics from a bygone era Vs. A Progressive View of Chinese Culture Celebrating a new Renaissance of China 2010 © BBDO/Proximity Live China An Omnicom Group Company. 32
  33. 33. 1. Get the Quality Right 2. Materials that China is Proud of 3. Re-Create Imperial Glory2010 © BBDO/Proximity Live China An Omnicom Group Company. 33
  34. 34. RE-CREATINGIMPERIAL GLORY 2010 © BBDO/Proximity Live China An Omnicom Group Company. 34
  35. 35. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 35
  36. 36. “Though China lost lots of inheritances after the cultural revolution, but the concept is stillthere, the history is still there, so to re-glorify the history and make China’sown luxury brands is a very interesting thing to do and I support it.” Research respondent 2010 © BBDO/Proximity Live China An Omnicom Group Company. 36
  37. 37. Indeed, there is a much strongerfascination with one‟s own rich cultureand national identity than ever before 2010 © BBDO/Proximity Live China An Omnicom Group Company. 37
  38. 38. Cultural CloutA successful and most grandOlympic Games in Beijing Economic Clout Chinese economy‟s continued expansion amidst global recessionGeo-Political CloutChina‟s acknowledged globalinfluence; accorded “G2” status 2010 © BBDO/Proximity Live China 38 An Omnicom Group Company.
  39. 39. And along with this strong sense of pride isthe new-found desire to re-capture and re- build China‟s lost cultural heritage 2010 © BBDO/Proximity Live China An Omnicom Group Company. 39
  40. 40. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 40
  41. 41. Brands that are able to tap into thisnostalgic sense of pride will certainly find its advocates among affluent Chinese consumers 2010 © BBDO/Proximity Live China An Omnicom Group Company. 41
  42. 42. However, there are those whoembrace a more progressive view ofChinese luxury; and argue that China has more to look forward to than merely re-claiming past glory… 2010 © BBDO/Proximity Live China An Omnicom Group Company. 42
  43. 43. 2. Materials that China is Proud of 3. Re-Create Imperial Glory 4. Introduce a New Take on Chinese Design2010 © BBDO/Proximity Live China An Omnicom Group Company. 43
  44. 44. INTRODUCE A NEWTAKE ON CHINESEAESTHETICS 2010 © BBDO/Proximity Live China An Omnicom Group Company. 44
  45. 45. In the absence of an uninterrupted brandlegacy/heritage to speak of, a new Chinese design aesthetic could be the starting point for a truly Chinese luxury brand 2010 © BBDO/Proximity Live China An Omnicom Group Company. 45
  46. 46. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 46
  47. 47. Learning from the Japanese‟s Strong Reliance on Design 2010 © BBDO/Proximity Live China An Omnicom Group Company. 47
  48. 48. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 48
  49. 49. How about going to market with a Chinese luxury brand? 2010 © BBDO/Proximity Live China An Omnicom Group Company. 49
  50. 50. 1. Get the Quality Right 2. Materials that China is Proud of5. Tap into 3. Re-Create The West Imperial Glory 4. Introduce a New Take on Chinese Design 2010 © BBDO/Proximity Live China An Omnicom Group Company. 50
  51. 51. STRATEGIC USEOF THE WEST 2010 © BBDO/Proximity Live China An Omnicom Group Company. 51
  52. 52. The Paradox Proud as they are, Chineseconsumers still look to the western world for cues of acceptance… 2010 © BBDO/Proximity Live China An Omnicom Group Company. 52
  53. 53. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 53
  54. 54. “We need to have people ofinfluence in China who are willing to spend money to buy and influenceothers to buy. In addition to attracting Chinese, we need to be able toattract Westerners to love the brand.” Research respondent 2010 © BBDO/Proximity Live China An Omnicom Group Company. 54
  55. 55. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 55
  56. 56. 56
  57. 57. There is a last button, and possibly the most challenging one… 2010 © BBDO/Proximity Live China An Omnicom Group Company. 57
  58. 58. 1. Get the Quality Right 6. The right 2. MaterialsBrand owner that China Mindset is Proud of 5. Tap into 3. Re-Create The West Imperial Glory 4. Introduce a New Take on Chinese Design 2010 © BBDO/Proximity Live China An Omnicom Group Company. 58
  59. 59. NOT BUSINESSAS USUAL 2010 © BBDO/Proximity Live China An Omnicom Group Company. 59
  60. 60. “I would worry that the quality cannotbe good, and that the person doing the brand won’t have a long termplan that could help build the brand,and they would give up easily if theymeet any obstacles, and don’t havea lot of money to sustain it because it would meet a lot of hardships.” Research respondent 2010 © BBDO/Proximity Live China An Omnicom Group Company. 60
  61. 61. “Because doing a luxury brand needs a long heritage, good story, this is not easily done.” Research respondent 2010 © BBDO/Proximity Live China An Omnicom Group Company. 61
  62. 62. “We Chinese investors doesn’t care about the brand reputation. They only want to make money in short time.” Research respondent2010 © BBDO/Proximity Live China An Omnicom Group Company. 62
  63. 63. 1. Get the Quality Right 6. The right 2. MaterialsBrand owner that China Mindset is Proud of 5. Tap into 3. Re-Create The West Imperial Glory 4. Introduce a New Take on Chinese Design 2010 © BBDO/Proximity Live China An Omnicom Group Company. 63
  64. 64. Research MethodologyQualitative research• Face to Face qualitative research study of China based High Net Worth IndividualsRespondent profile• Financial Assets (not including primary residence) in excess of 10MM RMB• Average age of 38 yrs old - 85% Local Chinese - 15% ExpatriateBBDO Voices• Real time monitoring of consumer feedback through a regular consumer panel. With periodic special editions. 2010 © BBDO/Proximity Live China An Omnicom Group Company. 64
  65. 65. Presented By Angelito TanManaging PartnerBBDO / Proximity Live • Angelito is a communications specialist with over 10 years of luxury brand experience • He has developed holistic results-driven strategies for some of the world‟s top luxury brands, and is considered an expert in communicating with China‟s HNWIs • BBDO / Proximity Live is a brand communications agency dedicated to creating unique and compelling strategies for luxury and premium brands targeting China‟s HNWIs and affluent middle class • Part of Omnicom Group Inc. (NYSE:OMC) and aligned with the global BBDO Network All the ideas contained within remain the sole intellectual property of BBDO/Proximity Live. No part of this document can be reproduced, executed or given to third parties without first seeking the written permission of BBDO/Proximity Live. 65

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