In Case You Missed It…Week In Review June 9-13

on June 14 2014 | in Week in Review | by | with No Comments

china luxury

This week in the news, Zara plans to set up shop on Tmall, Tiffany & Co. is partnering with a Chinese artist for its latest marketing campaign, Marks & Spencer is looking for a partner for its expansion in China, Prada has opened its fifth store in Shanghai, and China has entered a new luxury market era.

Zara to Set Up Shop on Tmall
Spanish retailer Zara hopes to attract a wider range of Chinese shoppers, especially those in lower-tier cities, by opening up an online shop on Tmall. Zara isn’t the first fashion label to try to capture a piece of China’s 1.84 trillion yuan e-commerce market, with Burberry, Gap, Asos, and Uniqlo having already opened stores on Tmall. Pull&Bear and Bershka, also owned by Inditex, already have stores on Tmall. Additionally, Inditex has 450 brick-and-mortar stores in China, of which 152 are Zara stores. Although the company suffered its biggest decline in five years with net profit falling by 7.3 percent to 406 million euros due to the strength of the euro, the company beat analysts’ forecasts due to cost control.

Tiffany Collaborates with Chinese Artist to Market Its Keys Collection
Luxury jeweler Tiffany & Co. has partnered with renowned Chinese painter Yu Hong – known for her paintings of women – to create a number of portraits of women with Tiffany’s signature key symbolically “unlocking” the women’s futures. Tiffany is not only trying to market its Keys collection, but is looking to better position itself in the Chinese market and to appeal to more consumers. Collaborating with a local artist, particularly one with a largely female fan base, could win over new consumers. The multifaceted campaign also looks to reach out to more consumers by using familiar faces in their portraits. One portrait that has surfaced on the jeweler’s Facebook page is of the well-known Chinese actress Zhang Ziyi.

Marks & Spencer No Longer Wants to Go Solo in China
British retail giant Marks & Spencer (M&S) is revamping its China plans, which could include creating a partnership with a Chinese company. M&S managing director for greater China Stephen Rayfield said the company’s goal is to “work with a strong partner with excellent local experience and expertise and accelerate growth across China.” Since entering the Chinese market in 2008, Marks & Spencer has opened 15 stores in greater China, with seven in Shanghai alone, and the stores are wholly owned by M&S. The company plans to close 5 stores in second and third-tier cities and open new ones in Beijing and Guangzhou. The company launched an online store on Taobao last year.

Prada Opens Fifth Store in Shanghai Despite Slipping Sales
Prada has opened its fifth store in Shanghai at “L’Avenue” mall in the city’s Changning district. The 1,000 square-meter store was designed by Italian architect Roberto Baciocchi and features Prada’s men and women’s leather goods, accessories, footwear and ready-to-wear collections. The new Shanghai store follows recent store openings in Beijing and Xian. In May, Prada rolled out its fourth store in Beijing in the In88 mall and launched its second store in Xian at the Modern Capital Printemps mall. Prada’s sales and earnings in the first quarter have come under pressure due to weaker spending by Chinese tourists and rising costs from store expansions.

China Enters New Luxury Market Era
China is becoming a normal emerging market. In 2013, luxury spending increase by just 2 percent, compared to the rate of 7 percent in 2012. Now, companies are skirting their associations with super-rich extravagance, stressing factors like quality and authenticity over opulence when marketing their products. The trend reflects larger changes in consumer taste as well as China’s current political climate. Despite the overall slowdown on luxury purchases, interest in women’s fashion brands has increased dramatically. Since almost 70 percent of Chinese women now work away from home, what was once a male-dominated market is gaining an increasingly feminine appeal.

image source: shanghai tang

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