1. LUXURY CHINA. B0OK REVTEW
Lackingluxury
Luxury Chrna doesn't have the flair for . L",*"! China is not wholly without merit,
which its topic is known though.The authors'analysis of the diffusion of
lur-ury products in an Asian context is a particular
strong poinr, offering insight into the behavioral
ou've heard the patterns_of the Chinise cJnsumer.They note that,
story before: With unlike Westerners, Chinese luxury purlhasers
the rise of China's have a slow adoption rate due to a hesitance to
wealthy consumer classes, take on new products. In contrast, purchase rates
lu-rury brands are clamber- drop offvery quickly larer in the product cycle, as
ing over each ro pick up a buyers switch brands once the normarive sian-
larger share of this rapidly dards oftheir reference group change.
expanding market. Brr oid This interpretation iithe'n uppli?J to different
dogs in the luxury goods types ofshopper - from the luxury lover to the
business are fast iea'rning lurury laggard-- which adds weight ro the overall
that they need new tricks consumer profile.
to attract Chinese consum-
ers, whose expectations and
. To complete the analysis, the book also breaks
down the various rarget groups, identifiiing rheir
values can vary starkly from current composition and how it miqht change.
those of their Wesrern Counter-inruitively, the luxury bran'd custom-
counterparts. er_s-are predominantly male
Seeking to shed light
-in 2001, three out
of four consumers were men - but the authors
on this enigmatic mar-- believe the focus is shifting toward females. The
ketplace, L ux uryt C h in a : target market also appears younger than one
Market Opportunities and might assume,with-86o/o oithe irembers of
Pote n t i a / by Michel Che- China's "affiuent class" aged 47 or below.In addi-
valier and Pierre Xao Lu is tion, more than 50% of the disposable income of
a survival guide for foreign one-child families living in urban areas is spent
luxury brands looking ro on or by its youngest mimbers.
enter China. The authors
Luxury China: cover all the major areas - customer and market Star appeal
Market Opportunities analysis, distribution and branding, and an essen- Once Chevalier and Lu have established the
and Potential tial discussion on counterfeiting -*but the book as identiryof the shopper, they move on ro rhe
by Michet Chevatier a whole lacks a major thesis. It-often reads like a brands. The discourse on ceiebrity endorsement is
and Pjerre Xiao Lu; set of separate research papers, compiled only on e_nlightening, outlining past hits and misses which
.John WiLey & Sons; accoxnt of having a common topic. draw attenrion to the broad spectrum offactors
us$29.9s Some parts seem to have bein unnecessarilv that must taken into consideration when choos-
included and add limle value. Notably, this occurs ing a brand representative.
in the discussion on advertising, which descends TAG Heuer, for example, is deemed to have
into inane descriptions of the media in China, made a poor choice whenlt signed up popular
with no link to lux.rry goods or any other idea NBA basketball player Yao Mi""g,Tli.'S#r,
raised by the authors. ne same probl.- .rop, timepiece brand is seeking upper--middle class
up again - gn{ is perhaps at its mosr pronounced associations yet Yao brings a mass-market sports
- at the end ofthe book, which coveri brand appeal. In conrrast, Mercides Benz successfirllv
protection and counterfeiting but fails to draw played offthe appeal of Chinese movie-srar
together the issues raised. Zhang Ziyi to sell its latest convertible...Through
Even when the authors do draw conclusions, a clever interplay oflanguage in the advertising"
they are poorly stitched and at times questionabie.
:]ogrlr., rhe'extreme 6eaJry' of the [M ercedJs
fol .IrTp^k-, Chevalier and Lu are unequivocal in Benz] CLS and that of its endorse, b..^*.
their belief that China is not a profitable market intertwined," the authors write.
for luxury brands, arguing that ihe capital re- Although Luxurlt Chinahas its flaws, it is
qurred_to grow is dauntingly large. Yet elsewhere nevertheless a useful and insightful guide for
in the book, during att uss.irm."nt of the hish those working with lux'ury br-ands iriChina or
barrie.rs to entry in the China market, they ilaim elsewhere. For those without a vested interest in
that the dominant position of the incumbents can the topic, however, it might make for a difficult
deliver a strong renrrn on capital investment. This read.
is supported by the high profits actually achieved
by the major brands such as Louis Vuitton.
At,oaaw Cuarnu
China Economlc Review . December 2009