This week in the news, social media is influencing buying decisions in China, David Beckham will develop a namesake brand with Hong Kong’s Global Brands, there are four major reasons Chinese consumers go online, Fratelli Rossetti ramps up its expansion in China, and British footwear brand Nicholas Kirkwood makes its debut in Beijing.
A recent study conducted by management consultancy AT Kearney showed how Chinese are spending their time online. Compared to the U.S., Chinese spend most of their online time on social networks and online entertainment. Shopping and transactional services were mentioned by 12 percent and 6 percent of the respondents, respectively. The study found that social media’s influence on purchase decisions correlates closely to age. More than two-thirds of respondents 35 and younger say they either frequently or occasionally base their buying decisions on what’s happening in their social networks; in contrast, more than 80 percent of respondents older than 65 say that they rarely or never base their buying decisions on what’s happening in their social networks.
Hong Kong-based Global Brands, which manages over 350 brands, including Coach, Calvin Klein, Under Armour, Dockers, and Tommy Hilfiger, has formed a partnership with David Beckham and American Idol creator Simon Fuller to develop and distribute David Beckham-branded merchandise globally. Fuller and Beckham will own 50 percent of the venture and Global Brands, a subsidiary of Li & Fung Ltd., will own the other half. At the press conference at the Ritz-Carlton in Kowloon, the new partners didn’t reveal many details other than that the partnership would include the development of products across the whole spectrum of consumer goods, including all apparel, kid’s wear, electronics, and food, not all in the luxury sphere.
China has the world’s largest internet population and internet use is growing the fastest in the central and inner provinces of China. What motivates consumers in China to go online and stay online? There are many attempts to decode Chinese internet users. AT Kearney’s recent Connected Consumer Study identified four basic universal needs – interpersonal connection, self-expression, exploration, and convenience – that bring people online. They surveyed 10,000 “connected consumers” — those who say they connect to the Internet at least once a week, but generally much more, and included about 1,000 consumers each from the United States, the United Kingdom, Germany, Japan, Brazil, Russia, China, India, South Africa, and Nigeria.
Italian luxury footwear maker Fratelli Rossetti will open 11 new stores in China over the next 4 years as part of its greater expansion plans in Asia. The company’s expansion into China began with the opening of a store in Harbin, which will be followed by stores in top shopping malls in Beijing, Shanghai, and Hangzhou. Though the company decided to take the franchise approach in other areas of Asia, Fratelli Rossetti has teamed with a local partner in China to better control the company’s brand and long-term vision. Company president Diego Rossetti said, “You cannot approach China with franchising. [It’s] a long-term investment. You cannot expect franchises to have a long-term vision.”
British footwear brand Nicholas Kirkwood has opened its first store in China in partnership with Beijing department store Shin Kong Place. French luxury conglomerate LVMH purchased a controlling stake in the footwear company last September and has been looking to expand the brand into new markets. The Beijing store will be the brand’s first outside of the United States and Europe. It is the company’s fourth brand-owned boutique after London, New York, and Las Vegas. The Beijing store will stock the brand’s new autumn/winter collection, ‘Arcs of Orbit.’ With LVMH’s support, Nicholas Kirkwood plans to double its points of sale by the end of 2015 and double that number again the following year.
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