Chinese luxury brands seeking to come of age
While China is well on its way to becoming the largest luxury market in the world, a number of home-grown companies are ambitious to make their own names known in an arena long dominated by foreign brands.
On a December afternoon at the headquarters of Beijing Aimer Lingerie Company, one of China's largest lingerie makers, Li Cong and a couple of sales staff are checking the latest collections of bras, knickers and nighties displayed in the company's showroom.
Li is the brand manager for La Clover, the high-end arm launched by Aimer five years ago. Gently picking up a red silk bra, Li said the lace used was imported from Europe and worth more than 1,000 yuan a metre (HK$1,217). The bra has a price tag of 1,880 yuan and the matching knickers are priced at 820 yuan.
'Our products are by no means inferior to top European brands in terms of fabric and sewing details,' Li said with confidence. The company's website describes La Clover as a luxurious, sexy and exclusive brand that mainly targets successful businesswomen, white collar professionals and rich socialites.
'We are determined to build it into a world-class luxury brand from China. All we need is time,' said Li. While a new generation of home-grown luxury brands has been on the rise in China, influential brands remain scarce. Chinese brands are trying to attract Chinese consumers away from their single-minded pursuit of foreign luxury brands, such as Louis Vuitton and Gucci.
'If the next decade is a golden era for international luxury brands in China, it would be a 'double golden era' for those local brands,' said Li Yifei, former chairwoman of China at Vivaki, a French communications and advertising conglomerate, which has provided its services to several Chinese luxury brands.
'They are very smart people. I think these brands will be catching up very fast over the next three to five years,' she said.
Chinese luxury brands have many things in common: they source the best fabrics and materials from around the world and adopt advanced manufacturing techniques to ensure product quality. They invite foreign designers to create their collections. And they open shops next to top international brands in big malls in Beijing, Shanghai and other key cities.
But when it comes to building brand images, they often take two different directions. Some choose to give their brands exotic names, adopt Western-style designs and hire blue-eyed, blonde models to promote their products.
'Many people consider us a foreign brand when stepping up to our counter,' said Li Cong when asked why their models are mostly Westerners and use an Italian term for their brand name.
'But that's not our real intention. We are a 100 per cent Chinese brand. Europe is where lingerie originated. Many of our customers have overseas work or living experiences or yearn for a Western lifestyle. Their taste is also reflected when shopping lingerie. We just cater to that.'
Casarte is also taking the same approach to catering to Chinese consumers' desire for a Western lifestyle. The high-end home appliance brand - launched in 2007 by Haier Group, China's largest electronic appliance maker - said its products would be 'a combination of high quality and artistic appearance that reflects the true spirit of European design'.
The name Casarte is a combination of the Italian words la casa and arte, which literally means 'art of home'.
Other Chinese luxury brands prefer to highlight their Chinese roots. They apply traditional Chinese cultural elements to their products, or emphasise the rarity of the fabrics and materials used in their products, which are only available in certain parts of China.
Such brands include Hermes-backed lifestyle brand Shang Xia, Richemont-backed Shanghai Tang, Shanghai Viva, the luxury brand of skincare seller Shanghai Jahwa, fur coat maker NE?Tiger, and 1436 Erdos, a new luxury brand launched by the Erdos Cashmere Group, which is based in Inner Mongolia.
Long Qin, spokeswoman for 1436 Erdos, said the cashmere used was from year-old goats raised in Inner Mongolia. More than 100 manufacturing processes are involved in the making of a plain sweater. Currently, prices of 1436 Erdos tops are about 5,000 to 8,000 yuan, while an overcoat sells for about 20,000 yuan.
The brand has opened 22 independent shops in first-tier mainland cities and plans to expand abroad in the next couple of years.
Ouyang Kun, the China office head of the World Luxury Association, said many renowned luxury brands were founded in Europe between the 18th and 20th centuries, when social turbulence created a class of wealthy people.
China is undergoing a similar experience and the luxury market is entering a period of rapid growth, according to Ouyang.
'But so far, there are virtually no domestic luxury brands in the true sense because most of these Chinese brands are still too young and lack a mature consumer base compared with European ones, which often have more than a hundred years of history,' he said.
'It would be even harder for a Chinese brand to be accepted by the Western world, especially when Chinese culture and lifestyle have not been well accepted by the Western world.'
Li Cong said La Clover would open more outlets in Malaysia, Hong Kong and Taiwan this year.
'At this stage, we can only say we have the 'genes' of a luxury brand,' she said.
'But what we are sure of is that people will know that the difference is there when they touch and feel our lingerie.'
The estimated spending, in US dollars, of Chinese shoppers on luxury products in 2011, says China Market Research Group