Happy Year of the Ram! This week in the news, Rolls-Royce has teamed up with Chinese artist Morgan Wong for Art Basel Hong Kong, competition in China’s luxury market is heating up as middle-class spending cools, AmorePacific plans to open 300 stores in China in 2015, Infiniti hopes its local plan in China pays off, and the weak euro means European retailers could get a big Golden Week boost.
Art Basel Hong Kong runs from March 15-17 and Rolls-Royce is hoping to lure affluent art lovers to its showroom by teaming up with artist Morgan Wong for a special installation. Wong’s collection, titled “Untitled – Expressway” explores the “value of urban development in relation to the automaker’s Spirit of Ecstasy.” The installation will also include a video of the drive between the Hong Kong city center and a new satellite town containing the city’s “prehistoric history,” which will be projected in the main showroom and on the cars’ displays. Rolls-Royce’s move follows in the footsteps of BMW’s creation of exhibits and initiatives to drive the attendees to its showrooms during Art Basel Miami 2014.
China’s economic growth is slowing, and though more Chinese are seeing their disposable incomes rise, they are not spending like they were previously. China’s economy is expected to grow 7 percent, which pales in comparison to the growth rate over the last 20 years. That means middle-class Chinese are being more careful with their spending as they no longer believe their wealth will grow as rapidly as before. The middle-class is no longer buying items based on status, but rather based on ease of purchase, value, and the desire to find new and unique products. The brands that have embraced mobile commerce properly are seeing huge success. Mainland China’s leading flash sales site, VIPShop, revealed that 60 percent of its total sales were through a mobile device last year.
South Korean skincare company AmorePacific plans to open at least 300 stores in China this year to capture a bigger share of China’s booming beauty market, which grew by 29 percent between 2009 and 2014. Despite having 2,335 points of sale in the country already, AmorePacific, the owner of brands including Laneige, Sulwhasoo, and Etude, controls only 2.1 percent of the Chinese beauty market. The company hopes to achieve a 30 percent increase in sales in China in 2015 by expanding its network of stores by around 15 percent, equating to 300 to 350 new stores. In 2014, AmorePacific’s China sales grew 21 percent to $4.3 billion, making it the brand’s largest market outside of South Korea.
Infiniti is banking on its strategy to produce vehicles locally and the launch of its brand building campaigns in China to reach a goal of 100,000 vehicles sold in the country per year by 2018. The brand has seen a steady rise in China, with sales increasing in 2014 to 30,046 units, up 76 percent from the previous year. Infiniti’s locally produced models are produced jointly by Infiniti’s parent company Nissan Motor Co. and China’s Dongfeng Motor Group in Xiangyang. The Q50L sedan, introduced last year, will compete head-to-head with BMW’s 3 series, Audi’s A4L, and Mercedes’ C-Class. Infiniti’s second China-produced model, the QX50 SUV, will be introduced in the first quarter of this year with a campaign featuring Chinese actress Zhou Xun.
With the euro at nearly record-low levels, more Chinese than ever are traveling to Europe for the Golden Week to hunt for bargains on luxury goods. With the holiday running from February 18-24, Ctrip, China’s largest online travel agency, has seen holiday flight and hotel bookings for Europe double compared to last year. Group tour bookings for Europe were also up 50 percent over last year. Since the European Central Bank announced in late January that it would launch a quantitative easing program to stimulate economic growth in the region, the euro’s exchange rate with the yuan hit its lowest ever rate. Overall, the euro has fallen more than 15 percent against the yuan since May of 2014, and that means bargains on European travel and shopping.
image credit: aural asia