Vertu sees sustainable growth in China amid anti-corruption drive
Vertu, the pioneer maker of luxury mobile phones, expects to achieve more sustainable growth on the mainland, its biggest market, following the central government's corruption crackdown.
"The government is not against luxury; it is against corruption, which is a good thing," Vertu chief executive Massimiliano Pogliani told the South China Morning Post. "Now, the people who are buying our products really love these devices and the brand. So I think it's better now than before."
The anti-graft drive comes at a major juncture for Vertu as the British company ramps up activities on the mainland this year with the launch of the top-of-the-line Signature Touch, its first 4G smartphone, in the world's fifth-largest luxury market and the biggest in terms of smartphone sales.
"The growth of the luxury goods market on the mainland over the past two to three years may have been inflated by those [corruption-linked] purchases, but that situation is no more. Business is continuing to grow at a slow rate, but this is more sustainable," said Pogliani, who declined to provide Vertu's global sales figures. "We are already ahead of last year's numbers in the first six months of this year."
The mainland's luxury goods market slowed to around 2 per cent growth last year from 7 per cent in 2012, according to a study published in December by consulting firm Bain & Company.
Pogliani said he expected Vertu's Android operating system-based Signature Touch, which costs from HK$89,000 to HK$190,000, to do well in its target market segment. It features a 4.7-inch display protected by a 118-carat, 5.1-inch sapphire crystal, titanium and stitched-leather casing, a Hasselblad-certified camera, audio tuned by Bang & Olufsen, Qualcomm's Snapdragon processor and concierge service.
The mainland's total smartphone market is forecast to exceed 450 million units this year, according to research firm IDC.
The British company, however, expects its foray into the premium-priced wireless speaker and over-the-ear headphones accessories markets "to reach new consumers who want to start learning about the Vertu brand", Pogliani said.
He said these will be the most accessible products for consumers since the speaker costs HK$5,200 and the headphones HK$6,500.