Betting that luxury lingerie will take off in China?
La Perla, the upscale Italian lingerie and swimwear label, is making a major investment in Asia with 19 flagships slated to open by the end of 2011.
Of course, China plays a key part in La Perla’s expansion strategy. La Perla believed that its elegant and sumptuous lingerie is on its way to captivating women (and men) all over China.
La Perla recently opened its first flagship store in Shanghai in the Peninsula Hotel. The bright and spacious boutique decorated with a soft cream interior offers a wide range of products for both women and men. Besides the main lingerie, swimwear, ready-to-wear, hoisery and perfume collections for women, the boutique will have a dedicated section for men’s underwear: GrigioPerla and NeroPerla.
A second Shanghai store will open in September at the Plaza 66 Shopping Mall. La Perla already has successful stores in Greater China, four in Beijing and five stores in Hong Kong.
While La Perla stores in Asia are generally smaller than those in Europe, they bring in more revenue per square meter. Hong Kong, in particular, is a booming market with its five stores bringing in 15,000 to 20,000 euros ($21,174.90 to $28,233.20) per square meter annually, said Andrea Bonardi, managing director of La Perla Asia.
Sales from Asia totaled 6 million euros, or $8.3 million last year, which is about 5 to 7 percent of total sales. Asia sales is projected to reach 10 million euros, or $14.3 million in 2011.
La Perla’s target consumers in China are slightly younger. In Europe, La Perla is popular among women over 35. In China, La Perla is favored by women in their 20s.
“It was surprising and encouraging news. These young girls are fascinated with our products, and are getting a touch of elegance,” said Bonardi. “There should be a gap when they turn 30 to 35, get married or go and have babies, but after that they don’t forget us and come back. Our target group is urban female professionals.”
Foremost in La Perla’s China strategy is to get people to know the brand. The company plans to do that by going directly to the customer, talk to them and let them try its products. “Once Chinese consumers try our lingerie on, they will find that La Perla is speaking directly to them, makes them feel confident and beautiful while wearing [lingerie],” said Bonardi.
La Perla had seen initial resistance to luxury intimates, but the tide may be changing in its favor as first mover in this niche segment.
“First of all, there was a gap in the market for luxury intimates,” said Bonardi. “We are intercepting customers as they discover this new niche and I believe this will create brand loyalty.”
Favorable market dynamics help. As Chinese shoppers evolved and are more familiar with luxury brands, they are becoming much more sophisticated; and as aesthetics become more important, women are becoming an increasingly important consumer segment.
“Women have spent years spending money on handbags, clothes and beauty products. Now, they are paying more attention to their bodies as well,” said Bonardi, noting that the popularity of cosmetic surgery among Asian women is on the rise.
Perhaps exhibiting a little pragmatism, Bonardi expects Asia to be a large part of its business, but still a few years away.
“From this point on, we are planning to open an average of five stores per year, and given the non-dynamic nature of this growth, we expect to make a significant impact on total revenues in three to five years,” he said.
photo credit: la perla