This week in the news, Baijiu maker Wuliangye has teamed up with Jack Daniels whisky owner Brown-Forman, French leather goods brand Moynat will open micro-galleries in China next year, Mercedes’ smart car celebrates its 5th anniversary in China, luxury spending in China is expected to rise, and digital marketing in China lags behind the rest of the Asia-Pacific region.
Chinese baijiu maker Wuliangye Yibin Co has teamed up with U.S.-based wine and spirits producer and distributor Brown-Forman Corp, the owner of Jack Daniels whisky, to develop new products for emerging markets and to counter slow baijiu sales. Brown-Forman was the third most popular company in China’s whisky market in 2013 behind Pernod Ricard and Diageo. Though the markets for beer, liquor, and wine are expected to grow at a single-digit rate, the cocktail market in China is booming with a growth rate of 30 percent annually from 2009 through 2013. It is expected to reach a worth of 4 billion yuan ($647 million) this year. To capture younger drinkers, the partnership will introduce the pre-mixed cocktail Rio as its first products.
French leather goods maker Moynat will test the Chinese market by opening three micro-galleries in Greater China next year. Revived by LVMH in 2011, the French company, which is celebrating its 165th anniversary, plans to move further upscale as it expands internationally. The planned galleries in China will each be smaller than 400 square feet and will showcase a select collection of the company’s most expensive items. The company’s full collections will only be available at their original Paris boutique and London flagship for the time being. The first gallery will open in Hong Kong’s Landmark mall on January 8th, followed in February by one in Harbour City and another in Macau in April.
Mercedes-Benz’s smart car brand is celebrating five years of success in China. First arriving in the country in 2009, smart established itself in 12 cities. Since then, the brand has made its way to 77 cities via 143 outlets. The smart car’s compact design and willingness to cater to Chinese consumers have been large factors in the brand’s success in China. Smart has also pioneered different marketing and sales campaigns on online platforms and became the first automaker to use WeChat for sales. To celebrate it’s fifth Chinese anniversary, the brand staged a live pop concert at Shanghai Stadium, which was attended by 50,000 people of which 10,000 owned smart cars, and unveiled the China-exclusive 5th Anniversary edition and 2015 New Year edition.
Despite the slowdown in spending and the government’s crackdown on luxury giving, consumer confidence remains high. According to The China Luxury Forecast, released by Ruder Finn and Ipsos Group, 90 percent of the approximately 2,000 respondents plan to increase or maintain their spending on luxury goods. The survey also found that the government’s crackdown on luxury gifts has been very successful. Only 12 percent of those surveyed admitted to purchasing luxury items for friends or business colleagues. However, 44 percent of respondents planned to buy luxury goods for themselves or their families this year, but overall luxury spending is moving from physical luxury goods to experiential luxury.
A global survey conducted by California-based Adobe Systems Inc. and CMO Council found that marketers in China have the least faith in digital marketing in the Asia-Pacific region. Of the Chinese marketers surveyed, 87 percent “exhibited faith in the competitive advantage created by digital marketing,” which includes marketing campaigns on websites, mobile devices, social media, and other digital platforms. In the rest of the region, 92 percent of marketers on average exhibited the same faith in digital marketing. Despite this huge number of mobile internet users in China, only 33 percent of those surveyed felt that ”the proliferation, appeal and capability of mobile devices are driving the acceptance of digital marketing.”
image source: moynat