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Are Luxury Brands Pulling a Jekyll and Hyde in China?

on February 27 2013 | in Retail | by | with 2 Comments

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Luxury brands are aggressively courting luxury consumers in China, yet more than a few are offering some of the poorest or costliest after-sales services that are driving consumers away. Can luxury brands afford this jekyll and hyde behavior?

Jeff Gong of Beijing Vogue Glamour Brand Marketing Inc had some harsh words for luxury brands and their treatment of Chinese customers, which he penned in China Daily. “Luxury items are mostly rare and expensive, and their appeal to Chinese shoppers, particularly to the hard-working middle class, is great because they are perceived as a reflection of the owner’s personal values,” Gong said.

And as such, he decries the hundreds of luxury brands that have appeared in China in “blind pursuit of maximum profits.”

Gong firmly believes that a service disparity exists between China and the rest of the world when it comes to product maintenance and customer care. “If you buy a battery for an Omega watch in its flagship store in Milan, the store commits that as long as the store is still operational, replacing the battery and cleaning the watch will always be free. But in China, replacing a battery costs you 200 euros, while the watch itself was just 3,000 euros,” he offered as an example. And Omega is not alone – Gong also called out the French jewelry company Van Cleef & Arpels, stating that free lifetime maintenance in Europe translates into long waits and fees in China.

“Perhaps today’s flood of purchases of luxury items has blinded brands….The operators of luxury brands may mistakenly believe that they do not need to provide attentive services and that their sales will skyrocket without them,” Gong mused. He does not believe that sales growth can be sustained while customer loyalty is not being cultivated, despite the “blind and irrational herd consumer behavior” the country is experiencing in the wake of the boom in middle-class buyers.

In addition to poor after-purchase services, Gong chides the way that sales associates treat customers, saying that despite the beautiful decorations and affluent air of luxury stores, they offer the same “customer as fish meat” attitude that most little street shops convey. “The attitude of the shop’s sales staff toward customers depends entirely on the price and amount of goods purchased by the customer,” he explained, “If you buy inexpensive goods, you are very likely to suffer scorn and resentment from the salespeople.”

Gong insisted that the world’s finest brands were going to need to devise in-depth and practical measures to grasp the middle-class consumer – and not push them away. Luxury brands need to act fast if they want to preserve customer loyalty and sustain sales.

photo credit: gma.yahoo.com

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2 Responses to Are Luxury Brands Pulling a Jekyll and Hyde in China?

  1. Timothy says:

    I think Mr Jeff Gong is incorrect in his observation that “If you buy a battery for an Omega watch in its flagship store in Milan, the store commits that as long as the store is still operational, replacing the battery and cleaning the watch will always be free.” In Europe, we also pay about 200 euro for a battery change for an Omega watch. Servicing an automatic watch is a laborious and time-consuming process and is definitely not free in Europe or anywhere in the world.

  2. Tania says:

    I agree with Timothy. I would also add the paying £5 for a Baume & Mercier battery change in a small town in Italy and £80 for the same battery change in London it is quite unfair…

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