East Meets West At The Coach Pre-Fall 2019 Runway Show in China

As far as the bygone times of New York City go, the roaring seventies remains one of the most iconic periods with its neon signs and graffiti walls. That was exactly the quintessential New York style that Coach brought to Shanghai for its first-ever runway show in China.

Coach Pre-Fall 2019 collection in Shanghai

The show, dubbed “Coach Lights Up Shanghai” featuring the man behind the American brand, Stuart Vevers, is the third show to stage its runway in Asia following Valentino and Dior Men in Tokyo. The backdrop reinterprets New York City’s Times Square in the 1970s, and was completed with a vintage car and neon lights to match the acid-colour shearlings and trippy knitwear in the collection. While there were no distinctive Chinese elements in the setup, the Chinese codes were alluded to in the collection as well as the selection of models, including Huang, the Chinese male model who opened the show.

“I love the contemporary art scene in Shanghai and it inspired me to connect with creatives based in China to create special pieces that connect authentically to the inspiring city where we are showing our collection,” – Stuart Vevers (Bof)

China has been one of the biggest markets for Coach since its first launch in 2003. According to Business of Fashion, when Coach bought back its Chinese retail business a decade ago, annual sales steeped from approximately $50 million to over $600 million. And for his pre-Fall 2019 collection, Vevers was inspired to create a line of clothing that merged Coach’s Western heritage with Eastern elements. Which in turn, creates a stronger presence in categories beyond handbags as the luxury ready-to-wear sector is booming in the China market.

Coach collaborated with China-based creatives to transform its dinosaur mascot Rexy into a motif seen across the ready-to-wear pieces and accessories. Beyond simply a marketing move, the collection also reflects an awareness of China’s growing presence in the global fashion scene. With this collection, Vevers hopes to open doors for the brand.

View runway images here:

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Comparison Between Chinese Akoya Pearls and Japanese Akoya Pearls

Pearls have been used for making jewelry for centuries. Pearls fall into different types. Akoya pearls are famous for its stunning luster. Nowadays, China and Japan are major production places of this type of pearls. Many people often make comparison between these two countries' pearls.

As a matter of fact, Akoya is a kind of oyster in salt water. Akoya pearls are cultured with the help of this creature. Akoya is a small living thing in three to ten millimeters. This is the reason why the pearls are typically in four to nine millimeters. Although the size is very small, pearls enjoy fine grain and shinning luster.

Pearls farming were developed in Japan decades ago. With the development of China, many countries build companies in China, so do Japanese pearl jewelers. About forty years ago, Chinese farmers bought the techniques of culturing the pearls. The initial result was not promising. They were quite inferior in quality compared to Japanese ones. Later, Chinese farmers have made great efforts to find the advanced culturing methods. In early 90s, pearls enjoyed good quality. Due to the improvement of the culturing technique and huge demand from the market, Chinese farmers have expanded the production in recent years. In fact, eighty percent of pearls in the market are cultured in China.

There is no doubt that the fast growth of Chinese pearls in China is a great threat. Japanese farmers find the way to balance the situation and take the upper hand. They make great efforts to improve the quality instead of quantity. Generally speaking, Chinese Akoya pearls are in size four to eight millimeters. There is little possibility to produce the pearls in larger than eight millimeters. However, Japanese farmers are capable of culturing pearls larger than 8 millimeters. Akoya pearls larger than 8 millimeters are rated as the invaluable. This is may be the reason why people treat this kind of pearls only produced in Japan and the price of Japanese pearls are much higher than that of Chinese ones.

According to the above description, we can easily know that eighty percent of Akoya pearls are produced in China. They enjoy good quality and are in size of 4 to 8 millimeters. But the extremely valuable Akoya pearls usually found in Japan such as a pearl in 8.5 millimeters which is the symbol of status and luxury. At the same time, Chinese ones are much cheaper than Japanese ones.

Source by Jessica Luo

Emerging-Market Investors Bullish On China’s Middle Class

Rapid Growth Of Still-Nascent Middle Class Signals Opportunity For Investors And Family Offices In China

Many investors are banking on the prospects for Chinese middle class consumption

Many investors are banking on the prospects for Chinese middle class consumption

We’ve kept a close eye on China’s burgeoning middle class, which — despite its recent appearance on the world stage — already numbers in the hundreds of millions, presenting a vast and unique potential consumer base for companies selling everything from cars to jewelry, household goods to fashion. While the Chinese middle class is expected by many to play a major role in the global economic recovery, their buying (and saving) habits, investment strategies, and long-term financial goals by and large remain poorly understood. Today, the Wall Street Journal looks into emerging market investors who eschew the popular financial planning target customer — the wealthy or ultra-rich — to serve the Chinese middle class, and investors in the West who are banking on the continued growth of this consumer class.

In coming years, it seems inevitable that the increased consumption of China’s hundreds of millions of middle class investors will affect, in some way, investors and money managers in other countries. If that is indeed the case, it pays to read up on this subject now, when the market is just starting to be defined and more fully understood:

Encouraged by the steps the Chinese government has taken to boost consumption, some equity-fund managers are putting money into sectors related to domestic demand, such as retail, automobiles and financials.

Chinese industrialization in recent years has lifted the average income of millions, propelling them into the ranks of a swelling middle class some say could grow to be the largest in the world.

“Thirty years ago, there wasn’t a consumer class in China, and that’s changed quite a bit,” said Constantine Papageorgiou, vice president and portfolio manager at Acadian Investments, which has roughly $9.9 billion in emerging market assets. “Those types of trends are likely to continue.”

As a strategy, investing in the Chinese consumer echoes a larger trend, where investors are seeking growth opportunities in developing-country consumers around the world, as they expand their buying prowess, purchasing a car or cell phone for the first time, for instance.

The move is also seen as a long-term investment, though, since China’s consumption push is still in its infancy phase. Some economists also say further policy changes are needed for China’s consumption trends to see upward trajectory long-term.

China’s private consumption was roughly 35% of the country’s gross domestic product in 2008– quite a bit lower than the levels in most developed markets. If China does pursue a more aggressive policy reform, the country’s private consumption could be raised to as much as 50% of GDP by 2025, according to an August report from McKinsey Global Institute, the economics research arm of consulting firm McKinsey & Co.

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Karndean Flooring Exposed – Information About This Type of Flooring

To most people Karndean Flooring is this beautiful looking designer flooring and you would be right, however people also associate Karndean flooring as an individual type of flooring – this is definitely not the case!

Karndean is a brand name of the flooring product Luxury Vinyl Tiles, there are 100's of brands out there selling luxury vinyl tiles, the well known brands such as Amtico, Polyflor, Marley, Project-Floors and obviously Karndean.

Karndean claim to be the manufacturer, however this is not the case as nearly all luxury vinyl tiles in the UK are manufactured in China, Taiwan etc. and are re-branded and brought into the UK. Therefore Karndean spend over £ 1 million each year on establishing their brand so that people become aware of the products they sell. So this is why Karndean is more expensive, as a lot of what you are paying for, is the brand awareness, which has been costed into the product.

If you are reading this article and are interested in buying Karndean, think again, here is a good tip for you, go to Google, or any other search engine facility and search for luxury vinyl tiles (LVT's), you will find suppliers selling LVT's very similar to Karndean for a fraction of the price. You can still create borders and features in these floors, the only difference is, you guessed it – the brand name. Like when you go to the supermarket and they have branded peas and unbranded peas, they both look the same when you take the packaging away and taste the same, because they are the same thing! this is the same with Karndean and LVT's if you market it well and make it look nice it sells better – typical evaluation of marketing. However save yourself a small fortune and find an LVT with a cheaper price tag, odds are they are still top quality just cheaper due to the company selling them having a low marketing budget.

The quality of an LVT is measured in the wear layer, most have a wear layer of between 0.3mm and 0.7mm, the thicker the wear layer the better the quality, although a 0.3mm wear layer is a domestic wear layer and is suitable for all domestic areas, a 0.5mm wear layer and above can be used for commercial installations.

So now i have explained that Karndean is a luxury vinyl tile, lets discuss the possibilities and strengths of this type of flooring compared to alternative flooring products:

1. Durable – unlike ceramic tiles or solid wood, luxury vinyl tiles (LVT's) will not split, chip, crack or splinter and will stand up to most things being dropped onto them. Most LVT's come with gurantees between 8 and 20 years.

2 Realistic – they are designed to replicate natural products and are designed to a very high realistic standard.

3 Designer – luxury vinyl tiles (LVT's) are one of the most bespoke, designer looking flooring available, using borders and strips you can create a floor that fits in perfectly with your interior needs.

4 Easily Maintained – cleaning LVT's is very easy, unlike natural wood floors, you wont need to sand and seal every couple of years, instead you can just mop the floor with hot water and a splash of LVT routine cleaning solution.

5 Waterproof – To a certain degree luxury vinyl tiles can with stand water a lot better than a laminate or wooden floor can, it can be mopped and cleaned a lot easier.

6 Quiet and Warm Underfoot – unlike ceramic or stone tiles or laminate flooring, luxury vinyl tiles are quiet and warm underfoot.

These are just a few benefits of using luxury vinyl tiles opposed to natural flooring products. So when you hear about Karndean remember that it is an LVT and to always look for a luxury vinyl tile first so you can see the price comparison. Luxury vinyl tiles like Karndean are a great product to use as they have more benefits than any other type of floor covering, however for them to look good and perform how they should, you also need to prepare the floor as per the installation instructions given by the manufacturer. As a perfect sub floor is one of the most important aspects of the job.

Source by Stephen G Latham

British Theater To Stage “Romeo And Juliet” In Seven Chinese Cities

TNT Theater’s Tour Will Visit Tianjin, Shenzhen, Guangzhou, Beijing, Ningbo, Hangzhou And Xi’an

TNT's past staging of "Oliver Twist" was a big hit in Beijing

TNT’s past staging of “Oliver Twist” was a big hit in Beijing

It seems that cultural exchanges between China and the rest of the world are becoming increasingly commonplace, with large-scale events like Carnegie Hall’s “Ancient Paths, Modern Voices” festivals in New York and Orange County, the “Experience China in Israel” event in Tel Aviv giving foreign audiences a chance to see a cultural cross-section. Over the past few years in China, foreign cultural organizations and groups have made regular trips to the country to give Chinese audiences a chance to do the same. The most recent of these cultural exchanges, a staging of Shakespeare’s “Romeo and Juliet” performed by Britain’s TNT Theater, began its seven-city tour of China this week, and is set to perform the play throughout the country until November 29. From Xinhua:

Cui Yang, general manager of the Beijing-based Milky Way Arts and Communications Co., Ltd, the play’s importer, said the new version featured a cappella (singing without instrumental accompaniment) and live score which was specially commissioned for the play. 

 According to Cui, all the sound effects in the drama were created by human voices instead of being pre-recorded.

The TNT Theater, founded in 1980, has been distinguished for its simple stage decoration, strong British style and cross-gender performances. It has previously won the acclaim of Chinese audience with dramas such as Charles Dickens’ “Oliver Twist” and Shakespeare’s “Hamlet”.

In the run-up to next year’s Shanghai’s World Expo, and certainly in its aftermath, we should see a great deal more cultural exchange going on both inside and outside China, as more foreign audiences look to learn about China’s ancient and modern cultures, and Chinese audiences look to learn more about important global and historical trends.

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The Chinese Henry Ford

Li Shufu, dubbed 'The Chinese Henry Ford' is the man responsible for the takeover of the renamed Volvo brand, by Zhejiang Geely Holding Group. Li Shufu is the chairman of the company that has just completed a $ 1.8 billion purchase of Volvo Cars from Ford Motor Co.

This transaction representations China's largest offshore auto deal and illustrates the growing influence of the country on the international market. Li Shufu seems to be intent on building a global brand with high prestige and profit margins.

Mr. Li Shufu is the son of a farmer from the Zhejiang province, in China. He started to make cars in 1997, despite that he had no experience or track record. Some of the habits of his personality are similar to Henry Ford's, beginning with their childhood spent on a farm and a determination to build cars from nothing. This is why he probably wanted to buy Volvo from Henry Ford's company.

The agreement to buy Volvo was first announced in December 2009, as Volvo has been on the market since 2008. Ford Motor Co. was hoping that Volvo sales could pay off the debts and allow focusing on Ford's core brands in this difficult time for the auto industry.

As Volvo has been struggling to increase sales and has not registered profits since 2005, this deal could mean a very profitable move for Volvo. China is the current the world's largest car market, with a rise of 50% compared to the previous year. The company also intends to benefit from the European market Volvo is associated with.

Volvo will remain a separate company with headquarters still in Sweden. The existing manufacturing facilities in Sweden and Belgium will be preserved. Car manufacturing will however, take place in China, catering for the Chinese consumers. The Chairman of Zhejiang Geely Holding Group wants China to become the second home market for Volvo.

Li Shufu was trained as a mechanical engineer, but after graduating high school he opened a photo studio in his native village. He moved into refrigerator parts business in 1984, then into motorcycles turning a state managed company into the best-known domestic brand in China. He moved into cars and his company became the largest privately owned car maker in the country.

He came to be one of the richest men in China by focusing on mass-marketing cars with prices around $ 6,000. By contrast, Volvo will sell cars for as much as $ 205,000. In 2009, Mr. Li was ranked number 44 richest man in mainland China by 'The 400 Richest Chinese' American Forbes. One other pursuit is to manufacture TX4 cabs after including a controlling stake with Manganese Bronze, a London based black cab taxi manufacturer.

Although Li had once dreamed of taking America by storm with the cheapest car, he changed his mind and decided to have a luxury brand as China's largest privately owned automaker. And he finally succeeded, but still he has to face other problems of a company with an expensive cost base and a safe but rather boring car. Will Li succeed where Ford failed?

Source by Dennis J James

Conspicuous Consumption “Here To Stay” In China: How Will Retailers Take Advantage?

Luxury Market In China A Mixed Bag For Foreign Brands, Who Fight To Get Customers To Buy Inside China Rather Than Traveling Overseas

Although Beijing and Shanghai are China's "crown jewels," second-tier cities like Chongqing may ultimately prove the engines for the creation of a more comprehensive Chinese consumer culture

Although Beijing and Shanghai are China’s “crown jewels,” second-tier cities like Chongqing may ultimately prove the engines for the creation of a more comprehensive Chinese consumer culture

We’ve discussed recent reports on the rebound of the Chinese luxury market (which didn’t drop that much to begin with, despite global economic woes), and this year’s findings in McKinsey & Company’s Insights China report that China is rocketing towards the top of the list of the world’s biggest luxury markets. Although China remains one of the only bright spots in the world of luxury retailing at the moment, foreign luxury brands — despite rapid growth in the mainland market — often have difficulties convincing many of the country’s highest-potential customers (the wealthy and super-rich urbanites in top-tier cities) to buy their products within the mainland, strangely enough, because of the large luxury tax China levies on high-priced imported goods.

Possibly to combat this problem, as we’ve seen this year, many companies are looking towards second- and third-tier cities as a source of future growth, and perhaps leaving the top-tier cities alone and letting their Beijing or Shanghai boutiques function only as “showrooms” for ultra-rich customers who’ll simply buy the products on their next overseas or Hong Kong/Macau trip. In these smaller urban areas, middle- and upper-middle class customers, who still want to differentiate themselves through conspicuous consumption but are most certainly not part of the economic elite, could be the key for luxury brands who want their China locations to actually sell things rather than simply show them off like a real-life catalog. Middle- and upper-middle class urban professionals in cities like Xi’an, Qingdao, Nanjing and Chongqing — who make a decent living but can’t afford to fly to Hong Kong or Macau (let alone Paris or Tokyo) for luxury shopping sprees — are likely going to buoy luxury brands’ losses in top coastal cities.

Second-tier cities in particular present major opportunities for businesses in a range of industries. A 2006 U.S. Commercial Service in China study (PDF) indicated that lower competition and lower saturation in second-tier cities made them an excellent target for importers, and the relative novelty of foreign brands would give them a leg up on domestic competitors for the medium- to long-term. From the study:

A less-saturated market also means one with fewer competitors, presenting a crucial opportunity for U.S. companies to be among the first to touch a market. This advantage also gives U.S. exporters the chance to win over a Chinese customer base, known for its strong brand- loyalty behavior and tendency to associate U.S. brand names with high quality. One exporter recently explained, “In big cities there is a lot of competition already. But in second-tier cities, we have an edge because fewer of our international rivals are there.”

Even though this study is a few years old, the trend of increased spending on imports in second-tier cities seems to have not only continued but intensified. This summer, a joint report on China’s luxury market issued by Ruder Finn Asia and Albatross Global Solutions found that purchasing patterns in first- and second-tier cities were only marginal, as consumer confidence and purchasing power in smaller cities shows signs of growth. As a Global Times article this summer pointed out, while first-tier cities will probably maintain their role as luxury brands’ “crown jewels,” with opulent showrooms in Beijing, Shanghai and Guangzhou, the important stores — the ones actually selling items — are the real key to long-term revenue in China:

“While brands continue to allocate image-building resources in tier-1 cities, tier-2 cities are anticipated to be key to their long term and sustained success,” said Jean-Michel Dumont, chairman of Ruder Finn Asia.

Despite optimism among many analysts looking into the second-tier luxury sector in China, uncertainty remains among others about the future of luxury retailing in China. This week, an excellent Luxury Society article investigates the two outlying concerns that many luxury execs have about the future of the Chinese market: consumer taste and prohibitive pricing (a byproduct of the aforementioned luxury tax). In this article, the author discusses the short- to medium-term prospects for luxury in China with a number of industry experts, and finds that there are no easy routes for sustainable revenue in the Mainland market. As long as wealthier customers can find luxury products abroad at a cheaper price, or can pop over the border to Hong Kong or Macau for a quick day-trip, even the most exclusive luxury brands will have trouble cajoling these customers to shop locally.

[D]espite the allure of these glamorous and expansive retail establishments, many anecdotal reports suggest that a significant proportion of Chinese shoppers don’t use local malls as the primary outlet to buy luxury goods.

[Simon Lock, managing director of IMG’s Fashion Asia Pacific division] explains: “At the moment, it’s all about the land grab for the brands, trying to establish spots in as many retail luxury shopping centres. These retail centres are acting more as showcases for the brand, which are distinct from actual retail sales. So you’ll find a lot of Chinese consumers will go into the Dior shop in Plaza 66 in Shanghai [for example] and they’ll look at the merchandise that’s in there. But because of the 30% luxury tax at the moment, their first luxury experience with the brand will actually be when they come to Hong Kong or Macau.”

As Lock suggests, the high price of luxury goods in China is the foremost hurdle. Between tariffs and value-added taxes, prices in China can be up to a third higher than in Hong Kong. Hence, a quick and cheap flight to Hong Kong can deliver more bang for their buck since travel visas are relatively easy to acquire for wealthy Chinese customers. For the hardcore luxury addict, Tokyo offers more luxury options than anywhere else in Asia, becoming an increasingly popular destination with visa restrictions now also reduced. McKinsey found in its “Coming of Age” survey that the Chinese rarely justify their foreign purchases on price differential alone, as they also want access to the more expansive product selection in Hong Kong and Tokyo retail branches.

But even if Hong Kong is driving away some sales from the mainland, boutiques in China do perform an important function within promotion and brand awareness, equally providing a critical communications channel for fostering sales abroad.

Although this article is wide-ranging and incredibly informative, a fuller sense of the buying habits of second-tier, and even third-tier, cities would probably be necessary to get a better sense of where the Chinese luxury market is headed. Quoting an expert on luxury markets in emerging economies, the Luxury Society article noted that conspicuous consumption of flashy (or, some would say, gaudy) and expensive luxury items is a hallmark of societies with wide income disparity, and in China’s growing urban areas this disparity is vast and, in some cases, growing.

If this trend holds true, we should probably see a two-sided growth for luxury brands in second-tier cities, as more brands open boutiques or mall showrooms and income gaps yawn. Though both will, over time, slow down and probably reverse, for the medium- to long-term it looks like brands looking to build a real footprint in China and build real brand equity should look past the marquee cities in the east — or at least understand that these eastern cities are just going to function as living catalogues for the Chinese urban jet set.

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New Designs and A Younger Market Bring New Life to Jade

The jadeite jade market remains strong and has been growing over the past few years even when sales of most other types of gemstones and jewelry have been lackluster, to say the least. A growing middle class in China, and a general attraction to Eastern culture in the West, have ignited new interest in this exceptional, significant and fascinating gem.

According to wikinvest.com "Estimates of the size and growth rate of China's middle class vary. Roughly half of China's projected urban population will be middle class in 2025 … The first industrial revolution created a 250% increase in per capita income over a 100 year period. The second industrial revolution triggered 350% per capita income growth over 60 years. By comparison, China is on track to create a 700% growth in per capita income in just 20 years. "

It is this demographic that has greatly inspired the resurgence in the popularity of jadeite jade jewelry. Much of this middle class are younger professionals with disposable funds to invest and enjoy. Sales of the classic indulgences such as travel, fine dining, automobiles and luxury goods are rising at an unprecedented rate in China. Even though many of the worlds designer 'fakes' may be produced in China, the Chinese prefer the finer things in their most genuine and authentic forms. Natural, untreated jadeite jade is one of these finer things. According to a recent article in Jewelery News Asia entitled Jadeite Gains Market Share "The market's appetite for Type 'A' jadeite, which is 100 percent natural and untreated, remains strong … The global economic downturn has not barred consumers from purchasing jadeite. " In fact, at recent jadeite jade auctions record prices for jade slabs and lots were not unusual. Many sales resolved in 4.5 times the reserve prices.

Jade has been a vital part of Chinese culture for centuries; as far back as the Neolithic period jade was used and revered. "Known as the 'royal gemstone', jadeite has been inexactably linked to Chinese culture, and has been prized for centuries by emperors, noblemen, poets and China's seriously rich." The value and beauty of jade is one of those wisdoms that have been ingrained in the younger generations. "Modern cuts and trendy designs have further enhanced this priceless treasure's allure, reeling in a younger generation of consumers who also prize jadeite jewelery for its beauty and inherent value" (Jewelery News Asia, July 2010).

"Asia is not the only market that has an insatiable appetite for jadeite. According to US-based jewelery wholesaler Mason-Kay, a rise in the popularity of things Asian in American culture has translated to greater interest in jadeite jewelery" (Jewelery News Asia , July 2010). The article continues on to point to new designers with fresh styles that have contributed to this new generation's interest in jadeite jewelry. Mason-Kay's Azure Collection is mentioned as one of their top selling lines, incorporating exquisite blue sapphires with better green jadeite jade. In the US Mason-Kay has been at the forefront in designer jadeite jade jewelry, learning a best earring finalist position in last years JCK Jewelers Choice Awards with a pair of earrings from their Azure Collection designed exclusively for Mason-Kay by Kristina.

Mason-Kay continues to develop green and lavender jadeite jade designs as well as other jade colors. Mr. Jeff Mason of Mason-Kay Jade also stated they have had much interest and increasing sales of better black nephrite jade. "We have also begon to design our Midnight Collection of better black jade in white gold with diamonds and cabochon colored gemstones" (Jewelery News Asia, July 2010). Mason-Kay is planning on the debt of the completed Midnight Collection in the spring of 2011.

Source by Kristina Mason

LVMH Acquires Chinese Traditional Spirits Distillery: Could Westerners Be Sipping Baijiu In Coming Years?

Market Analysts See Foreign Investments In Chinese Traditional Liquor As Smart Move To Cash In On Emerging High-End Domestic Consumer

LVMH's baijiu joint venture with Wenjun Distillery could be a huge money-maker in China; But will it appeal outside the country?

LVMH’s baijiu joint venture with Wenjun Distillery could be a huge money-maker in China; But will it appeal outside the country?

Although most westerners may be unfamiliar with baijiu, the traditional spirit of China, drinkers within the country have been sipping the powerful, often tear-inducing alcohol for centuries. Less famous abroad than Japanese sake or Korean soju, two of its descendants, baijiu is most certainly big business in China, with the most expensive bottles often selling for more than $10,000 USD. This high-end spectrum, populated by rare bottles produced by only a handful of companies, has apparently garnered the attention of more than one foreign company looking to get a piece of the premium baijiu market, as Diageo bought a 43% share in baijiu producer Sichuan Chengdu Quanxing Group last year and, recently, LVMH Moet Hennessy acquired a 55% stake in one of China’s top producers, Wenjun Distillery.

This acquisition should fit seamlessly with Louis Vuitton Moet Hennissey’s broader China strategy. As we wrote earlier this week, LVMH is making a massive push into the Chinese market, buoyed by figures that indicate China has leapfrogged past traditional luxury markets like the United States this year and should surpass the Japanese market within five years. Acquiring a premium baijiu with real brand pedigree — the first Asian brand to be owned by the LVMH group — is being greeted as a gutsy move, as the high-end baijiu market is both exclusive and highly competitive. As Karen Cho writes, the acquisition of Wenjun has huge potential as incomes grow throughout China, but — as uncharted territory — presents LVMH with a host of new challenges:

“This is the first experience for the whole LVMH group owning an Asian brand,” says Allan Hong, development manager at Sichuan Wenjun Spirits Sales Company. “Because of the great potential in China, the whole group decided to run the Wenjun brand as a super-premium brand in China,” he adds.

The article goes on to discuss increased foreign interest in the high-end baijiu market, exemplified by Diageo’s investment, and looks at some of the unique cultural challenges presented by the Chinese market, such as Chinese drinkers’ preference for drinking baijiu at restaurants rather than nightclubs:

[A]s LVMH had always targeted modern nightspots, and no one was drinking bai jiu in those outlets, they had to shift its focus to Chinese restaurants.

This, Hong says, posed an immediate challenge, because LVMH’s sales force had relatively less experience with Chinese restaurants.

“So (in our) communication with our distributors, with restaurant owners, we have made a lot of efforts to understand their needs and (also) what their consumers want in those kind of outlets.”

Although LVMH will undoubtedly face massive difficulties in this vast yet complex market, the combined brand power of LVMH and Wenjun names should give the new joint venture a leg up in the market. As Allan Hong says in the article, it is all about serving the lucrative but mysterious niche market of super-premium baijiu drinkers: “[With this joint venture,] we want to capture this opportunity; we want to get a niche market that only belongs to ourselves.”

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Is it Legal to Import Brand Name Merchandise From China?

With all the business education you can find today with just the click of a mouse, I am still amazed at some of the unrealistic expectations people have when it comes to product sourcing. Those who have chosen product marketing as a business model are naively under the impression that most wholesale suppliers will be able to provide them with just about any popular retail product, affordable to them at any price. Reality, however, always seems to get in the way of our ideas. Most current, in vogue, branded merchandise usually have restrictions on the way it is distributed. For example, LV Handbags are never sold "wholesale to the public", or to just anyone who has a resale certificate. And while there are exceptions, you will never see too many "half off" sales of Louis Vuitton Handbags even at the retail level.

In addition, unsold inventory is not passed along to wholesalers or the secondary surplus market. Excess product that is damaged, is sent to their corporate service centers to be repaired. What can not be sold or repaired is destroyed. In terms of online retail sales, the only web portal that markets LV handbags is Eluxury.com. Moet Hennessey, one of the leading luxury products group owns Eluxury.com as well as the rights to sell a number of additional products under the Louis Vuitton monique. Moet Hennessey also owns most over the counter retail stores that distribute Louis Vuitton merchandise. Not all brands are as restrictive, but some corporate buying policies can still provide barriers to entry in different ways.

Both Nike and Reebok do not confine the sale of their product to wholly owned corporate retail, or online stores. They distribute their brands to retail giants like Footlocker and will supply most independent clothing or sporting goods stores if they have the infrastructure and the funding to meet their monthly, or yearly purchasing minimums. Most small business start-ups do not have the finances to end the costs of carrying popular branded merchandise. However, a limited amount of Nike and Reebok merchandise can find their way into the secondary surplus and wholesale market. But, that is mostly shoe or sneaker products that maybe one to two years out of style. You will never find current Nike or Reebok sneaker styles being transported by any wholesale distributor.

Since some of the strict procurement obstacles that corporations can provide, it does not prevent some people from giving up on the search for the branded merchandise of their choice. Some will try to bypass a company's wholesale distribution chain or corporate purchasing restrictions by searching for the original equipment manufacturer. Since most popular retail clothing, apparel, sneakers, and electronics are manufactured overseas, the ever-vigilant Entrepreneur will usually turn to importing as means of securing items that have popular retail status here in the United States.

Take for instance Shenzhen, China. In Shenzhen, there is an enclosed shopping mall called Luohu Commercial City. The mall is six stories tall and sells a wide range of items, including handbags, brand name clothes, shoes, audio-visual products, souvenirs, and digital video discs. All can be had for a price that is about half to one third of what you would pay here in the United States. Some DVD's can be purchased for four Hong Kong dollars, which translates to fifty cents in United States currency.

The biggest problem with all of the merchants selling their wares within this megaplex of retail activity is the undeniable fact that most of it is counterfeit. And, like the never ending parade of fakery that is part of the Luohu retail environment, finding your way to the authentic manufacturer or wholesale distributor of a particular branded item is like searching for the proverbial needle in a haystack.

Paperwork, does not make it authentic! There is a prevailing wisdom among some brand seekers that receiving a certificate of authenticity from a brand name overseas manufacturer will provide assurance that the article is genuine. Supplying paperwork to overseas customers as "proof of purchase" for branded merchandise is basically a fallacy. Any labels, tags, paperwork, or certificates of authenticity that assures the buyer of brand certyty can be faked right along with the product itself. The only individual or businesses that are required to have proof of authenticity, are those who are authorized to resell the branded item, or the original equipment manufacturer (OEM), of the brand in question.

If there is a legal challenge to the authenticity of the product that they are selling, then paperwork can be provided to confirm that they are legally sanctioned to sell or manufacture a particular brand name product. To my knowledge, no wholesale supplier of brand name merchandise, either overseas, or in the United States, will offer their customers paperwork stating proof of authenticity. The proliferation of counterfeit items within the People 'Republic is staggering. The replication industry in China, as well as other Asian countries rarely on the production of counterfeit merchandise and has become an industrial staple. It is estimated that 8.5% of the Chinese GNP involves the production of counterfeit merchandise.

In addition, if you are thinking about importing brand name merchandise through online trading forums such as Alibaba.com and EcEurope.com, than I have some less than encouraging news for you. A majority of the trades leads on both forums require extensive research and a working knowledge of the importing business before you ever think about doing business with any of the listed companies. However, I do not want to be altogether negative about trade lead forums. I think that they serve their purpose in terms of finding leads for non-branded general merchandise, manufacturer leads, and industrial equipment purchases. But, I would be very skeptical of anyone who presented themselves as the original wholesaler or manufacturer of American brand name merchandise.

Trying to forge a relationship with someone who claims to have the genuine article can also be a finanally dangerous endeavor. Most overseas business to business suppliers require payment in the form of wire transfer or telegraphic transfer (T / T). The purchasing minimum that some suppliers ask for is a shipping container load of merchandise. Wiring cash into an overseas business account can be a recipe for disaster. Once the money leaves your account it is gone forever. If the seller does not deliver, you basically have no legal recourse in terms of getting your money back. The only way to recoup any funds would be for the seller to rewire the cash back into your account. You are basically at the mercy of the supplier.

The bottom line is this. If you want products like Nike Air Jordan, you have to go to Nike and find out how to purchase their products. The same is true with just about any name brand merchandise you want to buy. If you can not afford a particular product, well, then sell a non-branded item. There are plenty of product niches out there that you can explore. With that being said, I am not the last word when it comes to importing brand name merchandise. Please do your homework and consult the appropriate legal, business and import-export resources.

Source by Robert Potter