Slow and Steady Wins the Race for Foreign Brands Expanding in China

on June 11 2015 | in Retail Trends | by | with No Comments

luxury retail

Due to the complexity of the Chinese retail market, international brands looking to sell in China must be patient and do their due diligence if they hope to have success in the country, according to a report by CR Retail.

Though companies often blame China’s anti-consumption measures for poor sales, it is more likely that a lack of understanding of the Chinese market is to blame, reports Luxury Daily.

“However familiar the retailer thinks they are with China, they should not rush in and should spend time undertaking thorough due diligence,” said CR Retail managing director James Rogers.

He added, “This will help determine who their target customer is and how to engage with them.”

In the Chinese luxury market, the consumer is king, and it is folly for brands to forget this.

“Brands continue to make the mistake that because they are successful in other markets then they will automatically be a success in China,” Mr. Rogers said. “They often believe that the consumer will adapt their styles and tastes for the brand, but this is often not the case.”

Central to the luxury business in China is online shopping and the influence of social media on luxury purchases.

Not only do the brands need to establish a presence on websites like Alibaba’s Tmall or JD.com, along with Weibo and WeChat, but if they are going to launch their own web portal in the country, they must be aware that China’s internet firewall has been a major headache for retailers in the past.

“The brands that have and will continue to be successful are the brands that understand the consumer and adapt for them,” Mr. Rogers said. “Brands such as Burberry that understand the importance of technology in the consumer’s daily lives, have integrated it into their stores.”

Despite the luxury spending slowdown in China, luxury brands should heed the words of CR Retail’s report. According to A.T. Kearney, China’s retail market is expected to double the value of the U.S. retail market by 2022, reaching a total value of $8 trillion.





image credit: herry lawford

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