• Understanding why the current brand building and market development approach of many luxury brands in China is insufficient -- and often ineffective • Leveraging the growing intersection of travel and luxury: How delivering unique customer experiences can differentiate brands in an ever more crowded luxury market • Developing a virtuous circle: How innovative cross-border marketing strategies can generate sales, loyalty and intelligence both in China and abroad

1. Engaging with the Global, High
Net Worth Chinese Consumer
Philip Guarino
Helping Brands Connect with
Customers of the Future

2. EMLA: The Company
• Boutique consultancy in Los
Angeles, London, Shanghai and
Beijing
• Work with luxury brands and
retailers in US and Europe to
better engage and retain
affluent consumers in Asia and
Latin America
• Brand Strategy, Consumer
Research, Corporate Training

3. Selected Clients

4. The State of Luxury
€200+ Billion industry
14% Average sales increase YOY
2/3 Growth from
emerging markets
China is world’s largest
consumer of luxury at 25%

5. A Powerful Intersection:
Luxury and Travel
40%
Luxury
consumed by
tourists
50% 58%
Luxury Increase
purchases in YOY
Europe by
Chinese
travelers
Sources: Bain, KPMG, Global Blue

6. Local Spending on Luxury
Percentage of Affluent Chinese Intending on Making Purchases in China
DECREASE OF
29%
Source: KPMG

7. Overseas Spending on Luxury
Percentage of Affluent Chinese Who Have Shopped in Europe in the Past Year
INCREASE OF
567%
Source: KPMG

8. Overseas Spending: Here to Stay
What s your strategy?
67% 31%
Luxury goods
Growth
consumed outside
of China 7% abroad
in China
Source: Bain & Co.

9. Drivers of Overseas Purchases
• Price
• Perception of
Assortment &
Availability
• Counterfeits
• Service
• Caché

10. Corporate Dissonance
• Transfer of traditional US/European investment models
• Disproportionate investment in traditional marketing
techniques
• Mass Outreach: Demography vs. Geography
• Lack of understanding: China has a different economic
history, Chinese demographics are much younger
• Corresponding underweighting in digital marketing, social
media

11. The Conundrum
• A Passive Approach: Most brands are riding a boom
• Missed opportunities:
• Brand-building- Engaging with China s most affluent
consumers in a personal, meaningful way
• Information and intelligence gathering about
customers; most intelligence is poor, generic
• Building effective loyalty schemes
• Increasing sales both abroad and in China

12. Inertia, Tactics or Strategy?
Most Common Approaches:
• They will come
• Let s Buy them
• Let s Delight them

13. Experiential Marketing
• Generates emotion
• Highly personalized
• Builds affinity and
loyalty
• Communicates
authenticity
• A natural element luxury
brands can provide

14. Experience is key...
• Chinese consumers are still highly brand conscious
but are becoming more discerning
• Shift in consumption towards more discreet luxury
• Younger generations seeking more uniqueness in
brands
• Chinese consumers are making brand decisions
TODAY.

15. What offerings can attract and
retain the HNW Consumer?
• Brand as host : Curate unique, limited brand
experiences
• Concierge-like services that differentiate the brand
• Special items, backstage access, limited collections
• Loyalty Programs to increase spend and track data
across borders
• Provide access while communicating exclusivity.

16. The HNW Client Business
Continuum
Assess Brand
Assets and Curate Unique and Measure Results
Market and
Existing Strengths Compelling Seek Feedback
Promote
in Chinese Experiences Share Information
Demographic

17. Case Study:
Leading NYC Department Store
• Objective:
• A high-end United States
based luxury department
store seeking to expand its
brand awareness and
outreach to Global Chinese
consumers in order to
increase traffic, raise
average transaction value
and improve customer
loyalty

18. Case Study:
Leading NYC Department Store
Program:
• Develop comprehensive Chinese tourism strategy ranging from
messaging to merchandising, training, payment procedures, and
outreach strategies
• Host Chinese New Years event featuring fashion show and designer
meet and greet with prominent designers including Oscar de la Renta,
Diane von Furstenberg, Chinese celebrities, media editors and visitors
• Undertake targeted public relations outreach towards the travel media
in China
• Create Chinese digital and social media presence to increase awareness
among customers and influencers

19. Case Study:
Leading NYC Department Store
• High attendance
• High visibility
• VIP clientele
• Mix of Designer,
Creative and
Businesspeople

20. Case Study:
Leading NYC Department Store
" Results:
" More than 40 media hits in Chinese
lifestyle and travel trade, plus
significant recognition within the
fashion industry for leading edge
efforts with Chinese customers
" Increased buzz on social media
following among influencers and
customers
" Increased Chinese tourist traffic
" Significant increases in average
transaction value and net sales with
Chinese customers

21. Case Study:
Italian Men s Fashion Leader
" Objective:
" An Italian leader in the men s
luxury fashion market with a
strong China presence seeks to
increase engagement with HNW
Chinese tourists while they
travel overseas, increase
average sales value, acquire
richer customer information and
promote brand heritage.

22. Case Study:
Italian Men s Fashion Leader
" Program:
" Curate unique brand experiences in different key strategic locations
internationally
" Promote the experiences to more than 50,000 professionals in the
tourism trade
" Segment the groups inquiring about the experience to target affluent
Chinese traveler
" Promote experiences to VIP customers, ensuring that tour operators and
agencies include the experiences in their itineraries
" Shift in the economic model

23. Case Study:
Italian Men s Fashion Leader
• Results:
" Tremendous, immediate
interest and positive response
from travel trade
" Inclusion of the experience in
several tour operator
itineraries
" Promotion of the experience by
one of China s top 3 airlines to
their First class, Business class
and highest-tier elite and VIP
travelers

24. What Can Brands Do?
• Critical to take multi-faceted, innovative approaches
• Encourage cross-border marketing and information-
sharing that allows for brands to engage on a global level
• Dismantle silos and territoriality where possible; Bridge
gap between HQ and China offices
• Embrace and deploy technology- online and off
• Make your brand accessible 24/7

25. Concluding Thoughts
• China represents the single most important opportunity in
a generation...
• The HNW Customer demographic is global => a
management approach and P&L needs to reflect this
• Brand and Branding to HNW customers needs to take new
dimensions
• Execution is key and takes into account entire customer
experience
• Feel like leaders- bring insights back to management You
will be in the boardroom!