If There Really Is Brand Fatigue in China, Why is Burberry’s Popularity Rising?

on May 8 2013 | in Fashion Retail | by | with No Comments

One day, Louis Vuitton is spelling out doom and gloom for the luxury market, and the next, Burberry posted better-than-expected quarterly sales. How can two brands similar in demographic have such a different experience? The experts, according to Quartz, say that exposure, legacy, and price point all impact Louis Vuitton’s waning and Burberry’s rising popularity.

Novelty is what most Chinese luxury consumers are after these days. It seems Louis Vuitton, who has been in the country for more than 20 years, can offer little of it these days.

They may also have saturated the landscape with stores. LVMH announced in January that they would keep boutiques out of second- and third-tier cities. They have no desire to become pedestrian. The brand has also raised prices to avoid being too accessible.

Burberry also has a delicate balancing act.  However, given that it did not enter China until 2010, brand fatigue has not completely set in.

The key to Burberry’s success may be its enormous dedication to connecting with Chinese customers for its future growth. This includes wooing the rising affluent whose salary ranges from $19,500 to $100,000 – by opening 100 stores in the next 4 years.

But its real prowess is digital savviness.

With many people doing research online for luxury products, Burberry’s strong social media presence is serving the brand well. They are featured on 4 Chinese social media sites. This year, in a ranking of digital IQs for luxury brands in China, Burberry took first place.  While Louis Vuitton’s traveling exhibitions grab publicity around China, they can’t beat the power of Weibo.

Louis Vuitton’s presence in China has given it an identity and a culture of its own there, unless it embraces digital innovation, its spark will likely dimmer.

image credit: burberry

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