Luxury Brands China Burberry Earnings Tencent Hong Kong


This morning saw British super brand Burberry report strong H1 results, despite continued unrest in Hong Kong shaking profits in the region. Hong Kong revenue dropped from 8 percent to 5 percent of global sales for Burberry in H1, with the brand claiming the significant decline was largely driven by a fall in mainland Chinese tourists.

As protests in the former British colony continue, Burberry said its sales in Hong Kong declined by a “double-digit” figure, and it took a £14 million impairment charge against its stores there.

Burberry, which has 12 stores in Hong Kong, said this slump in sales will not result in the permanent closure of Hong Kong stores but that many stores have had to be temporarily closed during the protests “for the protection of its staff,” according to Chief Operating and Financial Officer, Julie Brown in a call with media this morning.

Brown reiterated that the decline in Hong Kong was not due to the violent effects of the protests — stating no store or product damage — but rather because of a distinct lack of mainland Chinese tourists. Burberry, therefore, remains optimistic, expecting “an element of repatriation of tourist consumers into mainland China and Korea.”

And indeed, despite this significant headwind in Hong Kong, globally Burberry’s pre-tax profits rose 11 percent to £193 million for the six months to September, while revenue increased five percent to £1.28 billion. In mainland China, sales grew by a “mid-teen percentage” with the brand continuing to localize its China communications. As part of its campaign for Chinese Valentine’s Day, Qixi, Burberry gained over 200 million views across Chinese social media platforms and contributed to strong double-digit quarter-on-quarter growth in its WeChat engagement rate in Q2.

This optimism is supported by the announcement today of an exclusive partnership between Burberry and the Chinese technology powerhouse, Tencent, to develop social media retail in mainland China. The first step of the partnership will be for Burberry to open its first “social retail store” in Shenzhen, powered by Tencent technology. The store is expected to open in the first half of 2020, in the new MixC Shenzhen Bay development. The store will offer unique experiences that connect luxury customers’ social and online lives to their physical environments. According to Burberry, this will be a unique space to test and learn, serving as a laboratory to trial innovation that can be expanded to the rest of the Burberry network in China.

Marco Gobbetti, Chief Executive Officer at Burberry commented, “Social media is becoming such an important part of the luxury customer journey, particularly in the inspiration phase, and retail needs to keep pace with this. Continuing our history of innovation, we wanted to explore the connection between these touchpoints by merging social media and the store experience to reflect the way luxury customers are engaging with brands. China was the obvious place to start as it is one of the leading hubs for innovation and technology and Chinese consumers are some of the highest users of social media. We are thrilled to be partnering exclusively with Tencent on this pioneering project which is an example of the step-change in our ambitions for the next phase of our transformation.”

Burberry has noticeably been focusing its efforts on mainland China in recent months in an attempt to cushion the effects of Hong Kong’s declining sales. At Riccardo Tisci’s celebrated Spring/Summer 2020 show, the brand actively targeted the Chinese consumer by harnessing the power of its Chinese brand ambassadors, including singer Kun Chen, actress Dongyu Zhou, and rapper Lucas Huang.

Despite exciting advances in mainland China, today’s results suggest that political turmoil in Hong Kong creates an uncertain future for many luxury brands in the Asia Pacific region. Now, with Tencent in tow, Burberry will be looking to avoid the worst of the negative impact.

Meanwhile, back in Hong Kong, and according to the brand, Burberry is currently pursuing rental renegotiations with landlords in the hopes of boosting profit margins and are switching focus to local clientele and pursuing local business. At least for the foreseeable future, mainland Chinese tourists will be looking to buy the ironically British brand elsewhere.





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Luxury Brands China Gen Z Gucci Saint Laurent


In spite of their general resistance to marriage and procreation, millions of millennials have nonetheless embarked upon the adventures of family life. Yet once they embrace parenthood, their priorities and spending habits change from a focus on frivolities and leisure activities to parenting products and services. Therefore, the luxury industry came up with a contingency plan by turning its focus toward Generation Z. Both generations remain relevant, but Gen Zers are credited with bringing new blood into streetwear culture while helping to modernize classic brands like Gucci and Saint Laurent.

According to Campaign Monitor, “Generation Z is one of the most powerful consumer forces in the market today. Their buying power is $44 billion and expands to $600 billion when considering the influence they have on their parents’ spending.” But despite their incredible potential, marketers remain baffled by this consumer segment. This is understandable to a certain extent, given that Gen Zers have unique traits that make them both appealing and frightening as an audience.

They are indeed the first true digital natives, but this aspect has particular implications and challenges because not every brand is fluent in social media lingo or is up-to-date with the latest technology. Furthermore, this generation is a result of the strict enforcement of China’s “one-child policy.” Because of this, Gen-Z kids grew up in households free from sibling rivalry and were pampered by older relatives. Some critics argue that this situation has created a generation of “little emperors” or “narcissistic and weak-willed children spoiled by parental attention and newfound material comfort.” The narcissism is debatable, but we can acknowledge that Generation Z has unique characteristics that impact their consumer behavior.

The fastest way to a Gen Zer’s heart is with engaging video content.

Another Gen-Z trait is that they are even more socially conscious than millennials. According to a report by MNI Targeted Media, 56 percent of Gen Zers “consider themselves to be socially conscious and more than 50 percent report that knowing a brand is socially conscious influences their purchasing decisions.” Moreover, as the most educated generation in history, Gen Z understands the importance of staying informed, and this knowledge formed their beliefs that brands should adopt socially and environmentally responsible practices.

Ultimately, Generation Z is a generation like none that has come before it, and marketers feel pressure to redesign their whole marketing strategy to engage it. For this reason, we outlined the best strategies for brands to implement so they can build long-lasting connections with Gen Zers.

  1. Authenticity and brand honesty should become the core values for brands who are interested in Gen Z

As mentioned earlier, Zers are intelligent consumers. They will cut right through advertorials, branded content, and sales tricks. So instead of creating ads, brands should focus on creating value.

Marketers serious about winning Zers over should promote transparency and honesty. This implies elevating the interaction with the consumer through thoughtful dialogue. International retailers need to listen to what’s important for their buyers while also offering incentives. Successful examples include turning loyal brand customers into advocates (Apple) or offering discounts and promotional offers to users who post product reviews on social media (Amazon, Alibaba). In short, retailers need to elevate their service offerings and shopping experience through a tactful, honest and genuine approach.

  1. Diversity and inclusion

According to a recent report, 60 percent of Gen Zers want to positively change the world through their work, and a study by Ernst and Young highlights that when working in a team, 63 percent of interviewees “feel it is most important to work with people with diverse education and skill levels” and “an additional 20 percent think that having people of different cultures (ethnicity/origins) is the most important element to a team.” We find the same ideas even in Facebook’s “Getting to Know the ‘Me Is We’ Generation” report, where it’s noted that Gen Zers see diversity as an asset. Meanwhile, according to Ryan Jenkins, 77 percent of Gen Zers look at the company’s level of diversity when deciding on a career move. That means brands emphasizing diversity and building an inclusive culture will surely win the hearts of this demographic.

Nike, for instance, went through a complete rebranding when it reorganized its management team and dismissed executives whose behavior was “inconsistent with [the company’s] values.” The company’s efforts were noticed, and the new branding was also beneficial for sales: When Nike unveiled its “Just Do It” campaign with former football quarterback and political activist Colin Kaepernick, online sales jumped 31 percent.

  1. Experiential marketing

Zers crave experiences more than owning material goods. For this reason, Inphantry says that Zers can be reached at “music gatherings, art exhibitions, product launches, brand activations, gaming conferences,” and other unique events, while traditional marketing bores them. Therefore, international brands should follow Alibaba’s lead and promote the “retailtainment” model. The Chinese giant is using multisensory experiences “to help buyers develop and forge an emotional connection to the brand.”

  1. Video content

The fastest way to a Gen Zer’s heart is with engaging video content. Jessica Baron from Forbes calls the phenomenon a “rise of visual culture” and she’s right: This generation has a very short attention span (about 8 seconds compared to millennials, who clock in at around 12 seconds). That’s why brands should seriously consider their video content because they won’t get a second chance to make a first impression with Gen Z.

Creating effective and engaging video content for Nice, Tencent Video, and DouYin (TikTok) is key for any successful marketing campaign in China. DouYin, in particular, with its quirky mix of content, is becoming a goldmine for marketers. According to WalkTheChat, 43 percent of DouYin users are in Tier-1 and Tier-2 cities and are predominantly young (20 percent are younger than 19, and 32.8 percent are 20-24.)

Given these particulars, it may seem difficult to engage with Gen Zers, therefore, international brands shouldn’t do things half-heartedly if they want to win them over. Only retailers that are genuine, inclusive, and dedicated to a socially responsible agenda will be able to count on this highly lucrative segment.





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Luxury Brands Alibaba New App Ruwo WeChat Gen Z


These days, China’s social media landscape is fragmenting along multiple fault lines. That means consumers are starting to spend less time on WeChat and Weibo, and luxury brands need to plan for ways to reach these users in their new online homes. In a bid to break WeChat’s dominance, Alibaba, Jingdong, and ByteDance are all developing new social platforms that target students, turning the college campus into a crucial battleground for the future of Chinese social media.

That arena has become particularly crowded over the past two years, with the number of Chinese social media platforms vying for market share growing exponentially. In 2018 alone, 159 new platforms appeared in Chinese app stores, with another 53 apps debuting during the first two months of 2019. In comparison, the entire seven-year period between 2008 and 2015 saw the launch of 153 new social media apps.

Alibaba’s new student-focused platform, Ruwo (also known by its English name, “Real Like Me”) is attracting particular interest. The e-commerce giant began beta testing the app in September, but an earlier version was also tested under the name Lanlan in several Zhejiang colleges towards the end of 2018.

The app is targeting a perceived yearning for authenticity, as that idea is often associated with Gen Z consumers. The platform promises that its users can “share and discover real people, real things, and real feelings.” Users can scan friends’ faces to add them to their network, use a celebrity face-match feature, and use an array of filters and stickers.

Young people with a college education want something that belongs to themselves that is also different from WeChat or Alibaba.

These new platforms are battling it out to emulate WeChat’s success, but they should each offer a distinctly different user experience from Tencent’s all-conquering app. This is mostly due to growing disillusionment with WeChat’s ubiquity, prying family members and friends, and overbearing, influencer-driven commercial content. Research by QuestMobile shows a decline in WeChat usage, suggesting that users are looking for alternatives. WeChat users spent 32.4 hours on the platform in June 2019, compared to 35.4 hours in December 2018 — a drop of  8.6 percent.

It’s no accident that many of the new social platforms are targeting college students. China’s college campuses have witnessed the passing of the generational torch this year, with undergraduate classes now composed exclusively of Gen-Z students. Experts believe Gen Zers are ready to break ties with WeChat in favor of a platform that can offer a more private experience and allow them to express themselves and post what they want, away from the watchful eyes of older family members.

There is a precedent for college-based social networking in China: Renren, which started in 2005 as one of the country’s first social networks under the name Xiaonei. Renren was hailed as China’s answer to Facebook, gaining over 100 million users at its peak. However, as the smartphone era dawned, Renren was quickly eclipsed by Weibo and then by WeChat. Renren’s original fanbase graduated — both from college and in terms of technology — and in spite of a 2011 IPO, the platform was soon rendered irrelevant, though it attempted to reinvent itself numerous times.

Sun Baohong, a marketing professor at Cheung Kong Graduate School of Business, said college students will welcome platforms that speak specifically to their experience. Sun said that demand has not been met by the platforms that have burst onto the scene in recent years, such as Pinduoduo and Douyin. “The increase in popularity of those platforms has been contributed to more by young people from third- and fourth-tier cities,” says Sun. “Young people with a college education want something that belongs to themselves that is also different from WeChat or Alibaba. So somebody needs to come out and serve them.”

Indeed, Alibaba wasn’t the only company rolling out a new platform to coincide with the new college semester. September also saw JD Finance begin testing on its campus-centric app, Liwowo. Only verified students can use the platform, which promises to connect like-minded users by deploying AI, a personality test, and interest-based tagging. As with Ruwo, Liwowo’s marketing seems designed to emphasize authentic relationships by appealing to students’ desire for true friendship rather than networking for the sake of networking. An ad for Liwowo promoted the platform as an antidote to campus loneliness, promising its users will find close “confidants.”

In the same month, Douyin’s parent company, ByteDance, acquired the college networking app Biu Campus. Biu Campus was launched in 2017, but reports on the acquisition noted that no updates to the app had been released in over a year.  The app allows students to leave comments, or “impressions,” on their classmates and see what classmates are saying about them.

Sun believes that Alibaba will have to overcome several challenges if Ruwo is to succeed. The company historically has been less mobile-savvy than some of its competitors, and it doesn’t have a lot of experience in building communities, partially due to its focus on e-commerce and a lack of user-generated content. Laiwang, Alibaba’s 2013 foray into social networking, was a failure, but on the bright side, Alibaba has seen success with its workplace network DingDing, which Western observers have labeled “China’s Slack.” “It’s hard to tell if Ruwo will be successful or not, but clearly it’s the right direction,” says Sun.

Thomas Graziani, the founder of the WeChat agency WalktheChat, said the biggest challenge to WeChat will come from established contenders like Douyin, Kuaishou, and Toutiao. However, he believes WeChat’s appeal will endure even as the social landscape fragments. “It’s not so much fatigue as it is a wider choice of apps for more specialized uses,” says Graziani. “WeChat will likely keep dominating relational social networks, but there is a lot of space for new interest- and entertainment-based platforms such as Douyin.”

Sun agrees that given its power as an ecosystem, WeChat will remain important for the foreseeable future. The introduction of WeChat’s app-like Mini Programs has bolstered the platform even as user engagement has fallen: the QuestMobile study found users were spending 23 percent more time inside WeChat mini-programs. Indeed, Sun distinguishes between WeChat’s potency as a mass-market driver of sales and its value as a branding tool. “Brands are not going to leave WeChat because it’s a more useful platform to acquire customers,” she says. “But to build a luxury brand image, I think now is the time for brands to find a social media platform that the new generation will hop on.”

Emerging, campus-oriented platforms could offer companies that opportunity, but it depends on the shape they’ll eventually take. Sun cited platforms like Pinterest and Keep as examples of how communities built around shared interests can create openings for brands. If Ruwo and its counterparts do emerge as more private social networks, brands will need to develop smart strategies for reaching potential loyal customers within the communities where they spend time fostering close relationships with people similar to them. How these platforms will ultimately roll out is uncertain, but brands need to be where Gen Z is or risk losing out on China’s wealthiest generation of consumers to date.





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Luxury Brands China Galeries Lafayette Happiness Science


Galeries Lafayette is making sweeping changes aimed at younger consumers’ needs for entertainment and experiences. One of the groups’ new Paris ventures is GL ANTICIPATION: a contemporary art foundation designed by OMA architects to support new actions in contemporary art. These activations will be implemented at the ambitious new Galeries Lafayette Champs Elysées and Shanghai stores this summer.

Galeries Lafayette’s China Chief Digital Officer, Wael Benkerrour, opened up about the group’s strategic ambitions to create a seamless retail bridge between France (the Haussmann store, the Champs-Elysées store, and others) and China (Shanghai, Beijing). “We are currently working on [the program] and it is one of our focuses in the coming months,” says Mr. Benkerrour. “The most important thing is to improve the customer journey.” For Galeries Lafayette, this means when Chinese customers are in HSM/Champs Elysées, they will also be aware of the brand’s existing Chinese business and can follow them on our Chinese social networks.

“It allows them, when they return to China, to be aware of the brand lifestyle trends from the Galeries Lafayette point of view, the events and the commercial offers in our Chinese stores, and in our e-commerce platform,” Benkerrour adds, At the same time… they have to be aware of our Parisian stores and their news. If they plan to come to Paris, they have to know why they should come to our Parisian stores at this moment, [for] exclusive products, events, arts, services, commercial offers, etc. In the future, it will be the same for other French stores located in cities where Chinese customers love to go.”

It is a rigorous science, and science tells us that everyone is entitled to be happy. The only thing needed is to find the right way.

An example of this can be seen in Galeries Lafayette’s new Chinese loyalty program, which will allow top VIP customers in China (roughly 2 percent of their active members) to have access to VIP services when they come to Haussmann, including a VIP lounge, drinks & catering, a personal shopper, and more (the group is still working on special advantages at its Champs-Elysées store.)

The recent opening of Galeries Lafayette’s Shanghai store offers a clear picture of how storytelling and retail can be implemented at a global level to modernize the mall concept. It uses behavioral science to elevate the client experience, ultimately leading to better sales. “Happiness is more than an emotion,” explains professor of psychology Kaiping Peng of Tsinghua University. “It is a rigorous science, and science tells us that everyone is entitled to be happy. The only thing needed is to find the right way.”

The retail experience as a ‘Happiness Shaker’

The Luxury Practice of PRS IN VIVO, a consulting group specializing in behavioral research, is assisting Galeries Lafayette in its quest to bring their clients greater satisfaction. They say there are five happiness drivers that helps define the behavioral data we need to measure. They include experience over ownership, altruism, managing your point of reference, gratitude and kindness, and savoring.

Elevating experience is particularly important for department stores that want to attract luxury brands to their retail space. Galeries Lafayette is on this path by utilizing the store’s one-of-a-kind architecture (experience over ownership), engaging with spend-for-good programs (altruism), pushing a unique selection of fashion items in China (managing point of reference), and displaying artworks (savoring the moment).

Happiness

Artwork, Danse D’Ellipses, by Felice Varini offers can only be seen fully composed from a unique standpoint. Photo: Galeries Lafayette

Anne-Laure de Broissia, the Global Head of PRS IN VIVO group, explains further, saying, “Luxury brands must create a highly emotional connection with customers in order to influence their behavior. Luxury customers don’t just settle for being satisfied, and traditional customer satisfaction metrics fall short of capturing the end-goal of a luxury experience around happiness. We have learned that creating memorable moments that literally evoke happiness is key to driving long term loyalty.”

Brands that empower consumers to find happiness will be embraced because Millennials value experience over ownership, De Broissia explains. Their value system shows a clear shift from previous generations in that they value doing over having, unique over exclusive, and personalized over universal.

“Build peak moments” with new ways of thinking to achieve retail excellence

By leveraging the most recent learning in behavioral sciences, Galeries Lafayette has focused on understanding customer decision processes in retail environments. Based on the belief that we’re irrational but predictable, the brand chose to focus on studying the customer’s brain in-depth, which lead to a golden rule in retail experience: The Peak and End rule.

Introduced by psychologist and Nobel prize winner in economic science Daniel Kahneman, the Peak & End rule focuses on the drivers of happiness peaks that make experiences memorable. A peak is a memorable moment along the customer journey, writes Stanford University professors of organizational science Chip Heath and Dan Heath, and brands should build peak moments to imprint memories of their brand’s luxury experience.

According to Kahneman, “We do not choose between experiences, we choose memories of experiences.” By creating peak moments, we thrive at transforming our space into what Benkerrour calls a “seamless boutique.” So what’s the best way to start building a peak? Create a good story.

If peak moments increase the ROI of your designed experience, they can also lead to further measurable. “While Behavioral Sciences is a prerequisite to actually being client-centric,” says de Broissia, “Happiness Science is a way to reconcile the need for measurement tools and the luxury core mission.” The practice consists of two approaches: the IVS Intelligence Video System and the Emolive. The Emolive approach consists of using innovative technologies with new behavioral techniques, like a bracelet that measures your body temperature, sweat, heartbeat, and movements during a store visit, combined with qualitative interviews to help unlock the consumer’s implied desires.

Emolive also helps define when and where peaks happen during the experience. At the Galeries Lafayette Shanghai store, for instance, a very particular art piece is aimed at creating a strong peak moment. The graphic installation is only completed from a single viewpoint, creating a surprise for the viewer who also acts as co-creator.

The Emolive approach also shows why peak moments happen by collecting behavioral data. A strong influence from the sales staff versus the impact of the store’s design can be measured via interviews that note “attentive, thoughtful staff service” as opposed to a heightened experience that fosters “a one-on-one relationship.”

Tanguy Laurent is a Managing Partner of Creative Capital, Altavia Group Leading US Chinese retail branding agency Follow us for more insights on Linkedin.





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CL Yachts Hits Home Run with Hong Kong-Owned CLB72


It was one of the shorter deliveries CL Yachts has made in its brief history. After the first two units of the CLB72 headed to the US, the third hull was for an owner in Hong Kong, headquarters of the new motor yacht brand.

The third CLB72 by CL Yachts runs through Hong Kong harbour

The third CLB72 runs through Hong Kong harbour

A fresh offshoot from Cheoy Lee, CL Yachts shares the historic shipyard’s head office and service yard in Lai Chi Kok in west Kowloon, and builds its yachts in its parent company’s enormous facilities outside Zhuhai, an hour’s ferry ride west of Hong Kong.

Founded in Shanghai over a century ago, Cheoy Lee moved
 to Hong Kong in 1936. From powered cargo vessels, Cheoy Lee diversified in the 1950s into teak sailing and motor boats, mainly for export to the US, and by the following decade 90 per cent of its production was pleasure craft. The company became a pioneer in the use of fibreglass, phasing out wood production, and in 1999 opened its Zhuhai facility.

Today, the vast majority of Cheoy Lee’s global business is commercial boats including tugboats and ferries, although the brand remains recognised as a pleasure boat builder in the US, where it has a purchasing, sales and marketing department in Fort Lauderdale.

In fact, it was at the 59th Fort Lauderdale International Boat Show in late 2018 that the company announced the formation of CL Yachts to build new lines of luxury motor yachts, explains Hans Lo, CL Yachts’ Deputy Director and a fifth-generation member of the family that has owned and managed Cheoy Lee since its formation.

The Hong Kong-owned CLB 72, I Did It, finds a place to rest

The Hong Kong-owned CLB 72, I Did It, finds a place to rest

“The Cheoy Lee name has recognition in luxury yachting, but not among the younger crowd, so we thought it was time to start a new division that was entirely dedicated to production motor yachts,” says Lo, the nephew of Martin Lo, Director of both Cheoy Lee and CL Yachts.

“CL Yachts represents a shift in focus, allowing us to create this new brand which will represent our luxury offerings in the future in line with our new brand ethos and philosophy.”

GROWING FAST

This September, CL Yachts attended the 49th Newport International Boat Show in Rhode Island with a new CLB72, a unit that had been sold at the Miami International Boat Show in February.

The company then marked its first birthday at the 60th Fort Lauderdale show (October 30-November 3), where it showed hull four of the CLB72 and the first CLA76, while also promoting its upcoming flagship CLB88, currently under construction and scheduled to be shipped to the US in the second quarter of 2020.

The aft cockpit has a wide granite table and convenient features like a bar and fridge

The aft cockpit has a wide granite table and convenient features like a bar and fridge

Lo, who was born in Hong Kong and educated in Canada, says the two CLB models will be the drivers of the CL Yachts brand, with the 72 leading the way. Hull number three, I Did It, is the first CL Yachts model sold into Asia and offers a window into this new company, as we visited Lo and the boat in Lai Chi Kok.

In fact, on what is generally a clean, minimalist exterior, the most immediately striking feature is the size of the hull windows, which almost seem to mirror those above in the superstructure.

Howard Apollonio of Apollonio Naval Architecture was responsible for the concept and exterior styling, and worked with structural engineer Gurit to produce a RINA-certified, resin-infused composite hull designed for durability, efficiency and performance, reflected in a top speed of 31 knots, using twin Volvo IPS1350 1,000hp engines. Structural integrity is enhanced by the strategic use of carbon-fibre throughout the boat.

“This hull is RINA certified, with CE certification available, which is difficult when you have windows of this size,” says Lo, who spends most of the week at the factory in Doumen and returns to Hong Kong at weekends.

Lit by big windows, the saloon features a lounge and, forward, a large L-shaped kitchen with an island counter, a corner dining table and a single-seat helm station

Lit by big windows, the saloon features a lounge and, forward, a large L-shaped kitchen with an island counter, a corner dining table and a single-seat helm station

Also notable is the enormous lift-powered beach platform, which extends almost 5ft from the hull so providing almost 7ft of decking from the transom, ensuring masses of space for lounging and fun by the sea, as well as storage for a 12ft tender.

GALLEY UP, ISLAND CENTRE

Upon boarding, the yacht welcomes you with a large aft cockpit featuring a long sofa and sliding granite table, all protected by the flybridge overhang. To starboard is a bar counter with sink, while beside the flybridge stairs to port is a convenient drinks cabinet and fridge, so helping to avoid repeated trips to the galley.

The interior by Carmen Lau, of Interiors by Carmen, features walnut flooring and wenge veneers. The lounge area is clean and formally structured, with a portside L-shaped sofa below large windows, facing a television to starboard.

In the forward half of the saloon, an L-shaped kitchen mirrors the sofa and is packed high and low with storage areas, while an island counter adds to the country kitchen feel.

The island counter provides a social hub by the galley and dining table

The island counter provides a social hub by the galley and dining table

As we make our way out of the harbour, it doesn’t take long to see how the entire galley area becomes the focal point of indoor socialising on what Lo describes as a ‘family-centric’ boat.

The island is like a magnet, the most natural place for people to gather, have a drink or a snack, and chat in pairs or groups; it’s also easy for anyone to join or leave. If the kitchen is the hub of family life, so it is here on the CLB72.

“The galley-up layout allows families to gather as a focal point and that’s why the galley is so big for a boat of this size” says Lo, whose grandfather led Cheoy Lee’s move to Hong Kong over 80 years ago.

For more formal dining, there’s a forward L-shaped sofa to port with a diagonal table that allows space for one or two loose chairs, while the area also contains a dayhead to starboard, with more storage areas fore and aft.

WINNING MASTER CABIN

Forward of the dayhead, beside the single-seat helm station, are the stairs to the lower deck, which offers enormous headroom throughout, a reassuring feature that adds to the yacht’s comfortable, homely feel.

The full-beam master cabin features the bed athwartships, large windows and great headroom

The full-beam master cabin features the bed athwartships, large windows and great headroom

The hallway leads aft to the full-beam master cabin, which benefits from enormous windows on each side and has the double bed athwartships, a layout that appears to dramatically increase useable space.

It creates a huge amount of room around the desk/vanity table to starboard plus easy access to the en-suite bathroom with double-sink vanity, and an impressively roomy walk-in wardrobe aft of the bed. The bathroom even has a glass door that can change from transparent to opaque.

“It’s rare to feel this much space in a boat of this size,” says Lo, who also points out a washer-dryer in front of the master suite. “Everything’s square and open, and you don’t feel like you’re going to bang your head anywhere.”

Lo said the master cabin in the first CLB72 featured a more conventional layout, with the bed on the centreline. However, as the bathroom mirrors blocked the window, the yard changed the layout on the second hull so the bed faced across the room, a design preferred by the owner of I Did It.

The CLB 72 has enough toys for a fun day out or weekend in Hong Kong’s sheltered bays, plus a huge swim platform, which extends the LOA to 76ft 9in

The CLB 72 has enough toys for a fun day out or weekend in Hong Kong’s sheltered bays, plus a huge swim platform, which extends the LOA to 76ft 9in

The portside guest cabin has twin beds that can slide together and en-suite access to a forward bathroom, which is also used as a dayhead and by the smaller starboard guest cabin, which has bunk beds. The comfortable VIP cabin is in the bow, up three steps, and has a skylight and an en-suite bathroom.

At the other end of the boat, accessed via the transom, is an attractive crew bunk cabin with bathroom. Crew also benefit from a particularly large engine room, with plenty of work space around the machinery, making service and maintenance easier and more comfortable.

The flybridge with non-slip flooring features coffee tables and an L-shaped sofa on starboard, with an adjustable backrest on the aft seats so guests have the option of looking over an open aft deck that can be used for yoga, loose furniture or storage of water toys.

The flybridge has an L-shaped sofa, with an adjustable backrest on the aft seating

The flybridge has an L-shaped sofa, with an adjustable backrest on the aft seating

The large portside counter features a big covered barbecue, refrigerator, ice-maker and a long counter top, while forward is the outdoor helm station, with a central pilot seat and a co-pilot seat to port. The foredeck features a slightly sunken, three-quarter length double sunpad, although it’s hard not to think more could be made of this area.

The yacht’s technology includes at-rest gyro stabilisation, as
well as an active interceptor system to create a smoother ride. Volvo Penta’s Glass Cockpit System integrates CZone monitoring, navigation electronics and engine monitoring, while the IPS pod drives include multiple joystick controls, with two wing stations, port and starboard.

Reassuringly, CL Yachts offers owners a limited 10-year warranty on the hull against structural defects, and a limited two-year warranty on boat parts and components.

The simple foredeck offers a three-quarter length double sunpad

The simple foredeck offers a three-quarter length double sunpad

Looking ahead, the company plans to consolidate its growing reputation in the US by exhibiting at the Miami International Boat Show in February and the Palm Beach International Boat Show in March.

At the same time, the company is also working on a galley-down layout, with the galley taking the place of one of the guest cabins, to create a much larger entertaining space on the main deck.

“We are currently reconfiguring the layout of the CLB72 for Asia, so other design options for this region will be available soon,” Lo says. “We plan for Asia to become one of our primary markets.”

www.clyachts.com

www.cheoylee.com

The original article appears in Yacht Style Issue 50. Email [email protected] for print subscription enquiries or subscribe to the Magzter version at: www.magzter.com/SG/Lux-Inc-Media/Yacht-Style/Fashion/

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Why Luxury-Mass Collaborations are Booming in China


In 2004, the Swedish fast-fashion retailer H&M entered into a collaborative partnership with Karl Lagerfeld creating a capsule collection that was an instant success. Since then, the retail world has seen various luxury-mass collaborations, such as H&M partnering with Stella McCartney, Roberto Cavalli, Comme des Garçons, Versace, and Maison Martin Margiela or Target and Isaac Mizrahi, Thakoon, Jason Wu, and 3.1 Phillip Lim. These collaborations proved to be a very successful formula for retailers in the West. Analysts, however, wondered if the performance and success of lower-priced collections could be replicated even in China. The answer, it turns out, is yes.

Evidently, though, not all luxury-mass collaborations achieved the expected results in there. For instance, the Versace for H&M collection “had high return and exchange rates at stores in Beijing, Hangzhou and Shanghai.” In fact, some collections did not impress the demanding and “always on” Chinese buyers, while other collaborations built up excitement but in the end, buyers turned against the brands because of unprecedented difficulties. To give an example, the Alexander Wang x H&M collaboration became an internet phenomenon in China but logistical complications turned fans against the retailer.

Given possible missteps, should retailers promote high-low collaborations in China?

Definitely, yes. China is a competitive market bestowed with the power of building or breaking international brands. However, the right business strategy can make all the difference. By way of example, the Uniqlo x KAWS collection created great desire among Chinese consumers. According to the South China Morning Post, “shoppers across China swarmed the aisles, dived under security barriers, ran the length of shopping malls, stripped mannequins and even traded blows” just to get their hands on a coveted T-shirt designed by the American artist. However, the success of this collection is not an isolated case. The H&M x Moschino collaboration (2018) achieved equal success, creating a veritable hysteria in China.

In both cases, the brands used brilliant marketing campaigns to appeal to the sensibilities of Chinese consumers. While H&M x Moschino was a glorious tribute to the 1990s and played well with the nostalgia of millennial consumers, Uniqlo x KAWS conquered the market through low price points (RMB 99 for a T-shirt) and a brilliant viral campaign. Photos and videos of buyers fighting over the Uniqlo T-shirts went viral and were re-shared millions of times. What’s On Weibo even reported that the hashtag #EverybodyKaws had received over 140 million views on Weibo while the Uniqlo online selection was sold out in seconds.

Why do most luxury-mass collaborations work in China?              

1. Label-obsessed culture                 

It’s been widely reported that social media and the change in consumer values have brought the end of traditional luxury. Luxury is no longer exclusive, discreet or aspirational but rather inclusive and attainable. “The idea of what is luxurious is changing; I think it’s about brand rather than luxury,” said Lazaro Hernandez, cofounder of Proenza Schouler. Indeed, the concept of luxury has been extended to sneakers and hoodies and is no longer exclusive to haute-couture gowns or Birkin bags. Evidently, the democratization of fashion is favoring luxury-mass collections because buyers don’t downgrade the collaborations to fast-fashion, but they see them as an extension of the luxury brand.

Equally important, younger Chinese consumers of lesser means that seek the prestige of international brands will be drawn to such partnerships. Since they can’t afford a Chanel tweed jacket, investing in a pair of trendy sneakers at a lower price point, or a T-shirt for RMB 99, is an affordable way to gain some social currency. It’s safe to say that as long as label-obsessed youth continues to spend much of their income on designer apparel, established fashion designers will continue collaborating with fast-fashion retailers. In the end, this is a win-win situation. The fashion designer and luxury brand both win exposure, while buyers get label products that come at a much more affordable price point.

2. Accessibility

The market for luxury goods in China is defined by high costs and scarcity. In 2017, the Business of Fashion reported that China was the world’s most expensive luxury market. According to BoF, the average luxury goods prices in mainland were “20 percent higher than the global average.” And despite recent tax cuts, luxury goods have remained expensive and unattainable to most buyers in China.

Furthermore, there are even some geographical factors that should be considered. In the past decade, luxury brands have embraced an aggressive expansion strategy for tier 1 and tier 2 Chinese cities, but smaller ones were neglected, suffering under a “thirst for the luxe life.” And despite the market’s vast potential, extravagant shopping malls and high-fashion shops are scarce in smaller cities. According to Luxe Digital, “45% of middle-class consumers in Chinese tier 2 and tier 3 cities are interested in purchasing luxury goods, versus 37% in tier 1 cities.” Naturally, scarcity pushes the performance and profits higher; thus, there is the possibility for luxury-mass collaborations to achieve greater success in smaller cities.

3. The new status signaling              

According to Ogilvy China’s report “Making Luxury Brands Matter,” middle-class consumers are not extravagant shoppers. They don’t dress to impress but to better themselves. Consequently, they won’t invest in goods that signal social status but in “casual luxury” brands that are more accessible like Michael Kors or Coach. From the perspective of middle-class consumers, luxury-mass collaborations are similarly appealing alternatives since they create the same value but (usually) come at lower price points. Moreover, some of the luxury-mass products have additional benefits, such as higher media exposure and a higher BCR (benefit-cost ratio). The new status signaling implies accessibility and discretion instead of boorishness.

4. The testers              

Testers are usually KOLs with large platforms, who have the power to influence followers and communities, mainly Chinese millennials and Gen Z. And as reputable testers, these KOLs feel the need to review, test, and communicate their insights to their followers, who like to experiment with trends and fashions, and are ultimately responsible for the proliferation of various trends, from streetwear to sneakers; thus, it’s not surprising that for them luxury-mass collaborations are “special edition” design experiments for them.

Considering the global success of luxury-mass collaborations, it’s safe to say that we’ve only seen the tip of the iceberg. The appetite for such partnerships in China is uncontrollable and in view of China’s economic slowdown, it’s expected that consumers will look for more cost-friendly alternatives to luxury. Consequently, the co-branding model will likely expand even further, pushing established luxury brands to consider similar short-term collaborations.





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Luxury Brands Singles’ Day Score Card on Tmall Luxury Pavilion


What happened:

The latest data from China’s shopping extravaganza Singles’ Day proves that consumption in China isn’t cooling down despite the current economic slowdown and the U.S. trade war. The inventor of the holiday, Alibaba, maintained its exceptional 10-year-track record by scoring $38.4 billion (268.4 billion yuan) in GMV (Gross Merchandise Volume) — a 26-percent jump over the previous year’s sales. While luxury brands have traditionally stayed away from the discount-heavy festival, this year, they leveraged the opportunity to broadcast their latest offerings, according to data released by Tmall’s Luxury Pavilion:

Quick Stats: 

  • 295 luxury brands attended Singles’ Day 2019
  • More than 40 percent of luxury brands dropped new products
  • Over 95 percent of brands integrated Huabei (Alipay’s virtual credit card) as a payment solution
  • The majority of consumers were from post-90s generations

Top-selling Items:

Within 3 hours, these items sold out:

Breitling watch; Burberry scarf and MCM bag 

Breitling watch; Burberry scarf, and MCM bag

Vacheron Constantin watch; Valentino Daydream capsule collection; Maison Margiela Tabi shoe; Moschino x Budweiser T-shirt

Vacheron Constantin watch, Valentino Daydream capsule collection, Maison Margiela Tabi shoe, Moschino x Budweiser T-shirt

Special offline events: 

  • Valentino 3D virtual shop

Launched in collaboration with the Alibaba AI lab, consumers spend more than 5 minutes on the page.

  • Carven new Spring and Winter products

In addition, consumers can enjoy in-store alteration tailor service.

  • Burberry scarf embroidery service

Consumers can book appointments online to receive in-store services.

Implications: 

Several experts we spoke with criticized the numbers reported by the e-commerce giants, saying they don’t reflect actual revenue, for several reasons: There is no overnight record sale, in fact, it runs over a pretty long promotional period — from October 21 to November 11; the GMV doesn’t take return orders into account, and the companies often include the full price instead of the discounted price for products. Nevertheless, luxury brands actively participated and stepped up their game this year, with over 40 brands celebrating Singles’ Day on Tmall. They dropped new products, released limited-editions, and co-branded goods. It shows just how eager luxury brands are to engage with consumers and stand out among the Singles’ Day noise.





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Luxury Brand Key Hidden Value Drivers


Luxury is an elusive concept. When most people think of luxury, they think “expensive.” And, yes, the price point of luxury is typically in the top 1 percent of all products in a category. However, a product in this extreme pricing tier will only be successful if the value it creates matches the price. As such, the price is a result of value creation — not the value itself. Therefore, to create luxury, brands need to create value. But what drives this value? And why do people buy luxuries?

Most people I talk to, even seasoned managers, answer intuitively with “social status.” Social status is surely a part of a luxury brand’s value, but the overall value is so much more than that. This is critical for luxury brands to understand: The product and its qualities (design, features, materials, craftsmanship) don’t create luxury value. The product merely signifies “luxury” to the public (or it doesn’t).

Once people perceive a brand as a luxury, effects kick in that drive its product’s value in a nonlinear way. Some drivers, like social status, are intuitive, but others are hidden in consumers’ subconscious. These hidden drivers are of particular interest because they offer bigger opportunities for brand differentiation, brand storytelling, and other competitive advantages. Our research revealed that “enhanced attractiveness,” “expert signals,” “public protection,” and a “mindset shift towards new experiences” were four hidden drivers that are more crucial than most luxury brands realize.

Hidden aspect #1: enhanced attractiveness

We performed a study that placed the same person in two different contexts: a luxury context and a non-luxury context. In the luxury context, a woman was driving in a Bentley convertible and a man was wearing a Patek Philippe watch. In the non-luxury context, the same woman was driving a Volkswagen and the same man was wearing a Swatch. The study was such that the participants didn’t know the topic was luxury, but instead, they thought it was a general psychological survey. They were asked their personal views about the people in these contexts, and a single participant either evaluated the first or the second situation exclusively without knowing the other context existed.

The stunning results showed us that physical beauty and attractiveness are not absolute evaluations, but rather, they depend on context. The Bentley and the Patek made their owners seem significantly more attractive, desired, and beautiful to evaluators than the same owners wearing non-luxury products. After the participants answered all the questions, we asked them if they would ever be influenced in their evaluation by luxury. Whether or not people verbally stated that luxury products influenced them, the results were consistent. This indicates that people have a high sensitivity to this hidden effect, regardless of their views on luxury. In other words, people subconsciously ascribe enhanced attractiveness to luxury, and that expected attractiveness drives the value of luxury products significantly.

The expectation of perceived expertise is also an important driver of luxury value.

Hidden aspect #2: expert signals

Participants in this study also attributed a greater amount of “expertise” to the people who were pictured using luxury brands, as compared to those people shown using non-luxury brands. The luxury context triggered a conviction that people with luxuries knew a considerable amount of information about many things, making them seem like experts. The expectation of perceived expertise is also an important driver of luxury value.

Hidden aspect #3: public protection

A third and more complex hidden aspect is something I call “public protection.” When participants looked at the aforementioned luxury context, they concluded that those people using luxuries — unlike people using normal brands — were somehow allowed to do a lot of things others couldn’t and wouldn’t fear reprisal for doing them. This sense of public protection is highly desired and drives luxury value in a nonlinear fashion.

Hidden aspect #4: mindset shift towards new experiences

Participants assumed that the people pictured using luxury products were having a lot of fun and experiencing spectacular or unusual things. In other words, luxury can create a mindset that allows people to try new experiences and break out of their common patterns and usual routines. The desire for exceptional experiences is also a critical driver of luxury value and should not be underestimated.

Why brands should care

When uncovered, these four hidden drivers can offer brands significant opportunities to create value. People anticipate those aspects from luxury, so the more brands center their storytelling around these subconscious desires, the more they will be able to create a relevant brand proposition.

When we analyzed luxury, lifestyle, and consumer brands, it became obvious that a brand’s storytelling directly correlated with its market success. Brands that project who they are with clarity — not just on paper but through the superiority of their daily execution — have a drastically higher chance of successfully connecting with their customers, while brands that aren’t clear usually fail. For brands, simply focusing on heightening social status isn’t enough. Managers need to think beyond status and tap into the more hidden aspects of luxury value to create a lasting competitive advantage.

Daniel Langer is CEO of the luxury, lifestyle and consumer brand strategy firm Équité, and the professor of luxury strategy and extreme value creation at Pepperdine University in Malibu, California. He consults some of the leading luxury brands in the world, is the author of several luxury management books, a global keynote speaker, and holds luxury masterclasses in Europe, the USA, and Asia. Follow @drlanger





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As Violence Increases in Hong Kong, How Worried Should Luxury Brands Be?


What happened: 

Today marked “a day of violence and anger in Hong Kong,” as reported by the New York Times. The protestors had planned an all-day strike to commemorate the death of a student protestor that fell from a parking garage during last week’s protests. The day, however, started with more bad news: two protesters were shot by policemen, both seriously hurt but alive. And by the afternoon, things just kept spinning out of control: during a verbal dispute, a middle-aged man was doused with gas and set on fire by a group of violent protestors, and then footage of the police running over some protestors surfaced online, seemingly setting the whole city off in anger.

Jing Daily witnessed first-hand as the protests exploded in Central, the business district in Hong Kong, where investment bankers, lawyers, and accountants work and normally crowd the streets. It was a surreal scene. Under luxury malls and boutiques and billboards, protestors marched and chanted on the streets, as police fired warning shots in the air, while businessmen in suits quickly walked by. Until today, the protests had taken place on the weekend, when districts like Central were less crowded, but that has now changed — which speaks about how serious the protests and the situation in Hong Kong has become.

Bottom line:

Brands should be aware of the increasingly violent situation in Hong Kong and prepare emergency backup plans, as the six-month-long protests only seem to be growing more and more violent. And now, beyond disrupting businesses, the protests have directly impacted the retail market as well. Many luxury brands have been taking a wait-and-see approach until the end of the year to renegotiate retail spaces or possibly shut down. But some have reacted quicker. Both Prada and TAG Heuer closed their stores in Hong Kong’s retail heart, Causeway Bay, and the Chinese apparel group, EPO, also announced that they would temporarily withdraw from the market until things settled down. The question now, perhaps, is how many more luxury brands will follow suit and shutter stores until the escalating and unstable situation comes to — hopefully — a peaceful resolution.





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Alibaba Singles’ Day 2019 Sales Generates $38.4


As Alibaba Singles’ Day comes to a close, the tally is in, and 2019 generated US $38.4 billion (RMB 268.4 billion) of gross merchandise volume (GMV), reports Alibaba. The sales marks an increase of 26% compared to 2018.

This year’s Singles’ Day featured 200,000 participating brands, one million new product launches and 1.3 billion delivery orders. The top five international countries selling to China through cross-border platforms were: Japan, United States, South Korea, Australia, and Germany.

According to Alibaba, 299 brands surpassed U.S. $14.3 million in sales and 15 of those brands surpassed U.S. $143 million in GMV. Top selling fashion brands included: Estée Lauder, Gap, H&M, L’Oréal, Levi’s, MUJI, Nike, The North Face, Under Armour, and Uniqlo.

The success of many brands, like Estée Lauder, can come down to single product. Within 25 minutes, 410 thousand bottles of Estée Lauder’s Advanced Night Repair eye cream were sold during Tmall’s Singles’ Day presale on October 21.

For more of our Singles’ Day news and analysis, read the below: 





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