Luxury Products Marketing in China

How to Sell to Chinese Rich People – Know What They Think

During the Spring Festival only months behind us, European and American department store industry were awed by the purchasing power displayed by the Chinese consumers. Facing this phenomenon, western media has made the following remark: in Asia, the conspicuous consumption is gaining in the popularity. Through purchasing the most famous luxury brand, people are actually showing off to the people around them.?

However, when luxury products from LV, Gucci, with logos printed all over, are dominating the Chinese market, the real man of wealth began to find these “entry level” luxuries dismissive. In their circles, only those private, customized, low-profile gadgets can prove equal to the name of luxury. Originated from Europe and the United States, these products find their way to China through non-mainstream channels. They always maintain a low profile and their reputations are being spread from mouth to mouth. Limited edition, plus the customized production, making these brands maintain a high price.

As production and sales of these products are very low, they follow a unique survival tactics, that is, be mysterious. Behind their low-profile show they are putting on, these products are really high profile.

The Brands Value Are Improved by Its Reputation

Reputation in the consumer circles are the survival secrets of these luxuries. To engage in this trade, a rule must be borne in mind: if the customers find the whole shopping experience satisfactory, they may tell 5 friends in their circle. However, if they find a single procedure not to their liking, more than 20 friends in their circle would most definitely get the message.

Mike is the Sales Manager of one of the Europe’s top yacht brands in Shanghai. For most of the time in one year, he had no sales achievement at all. And his work is to go to a private posh club. And in his spare time he would go playing golf or enjoying coffee, idling his days away.

To get in the wealthy circles is the core of Mike’s work. Only through establishing long-term relationships with those billionaires, can he sell his yacht. Although each year he can manage to sell one yacht only, he still makes a great living as the price of each yacht is as high as tens of millions dollars.

Yacht of this kind is rarely exposed to the general public, but in the posh circles, they are very much being sought after.

To do business with the rich, one need to be fully acquainted of their habit and characteristics. For example, although the rich grow increasingly interested in the yacht, they need to hire the specialized yachtsmen as they cannot drive the yacht themselves. Besides, they seldom purchase yacht in the mainland China, but via Hong Kong instead. Sometimes in order to buy a yacht, they will specifically register a company in Hong Kong. And then trade under the name of the company so as not to reveal their own name. The rich are experts in financial management. Even with great economic power, few of them would be willing to make a lump-sum payment. To sell a yacht to them, the seller needs to provide them with all the loan procedures and other matters.

Reputation in the consumer circles are the survival secrets of these top luxuries. One Malaysia diamond dealer said that to engage in this trade, a rule must be borne in mind: if the customers find the whole shopping experience satisfactory, they may tell 5 friends in their circle. However, if they find a single procedure not to their liking, more than 20 friends in their circle would most definitely get the message.

The consumer group of the top luxury is limited to a very tiny number of super-rich people. Once their reputation gets damaged, these luxuries simply cannot survive.

Diamond enthusiastic pursues only satisfaction— they have their own appreciation and understanding about the design and cut of the diamond. Most of them are not keen on showing off with the diamond. What they would do is to appreciate their own collections and then put them back to the safe, keeping the joy only to themselves. 

A top diamond flagship store was opened in an old house villa at the former French Concession in Shanghai. The majority of its guests are introduced by friends in this circle. Those jewelry counters in the crowded shopping district are considered to be short of privacy.

Operating luxury brands often require a great deal of patience over many years to soak in the rich circle. The recognized brands that last for decades or even centuries all experienced a painful process of getting accustomed to all kinds of peculiar tastes and habits of rich people before they could maintain a stable business.

Limited Version & Customized Design

As they only need to meet the needs of a very limited number of customers, these luxury brands are not interested in public awareness. The long-term service for a few top rich customers is often enough to support the continued existence of the entire brand

Mr.Lu is a luxury collector. And his personal favorite is Bottega Veneta, a brand famous for its waving technique. He enumerated the features of the handbags that attracts him: natural leather material, strict hand-woven technique, and the most special feature is that no LOGO could be seen on the entire handbag, from top to bottom.

A 35 cm Bottega Veneta handbag shall be priced up to 20000-30000 yuan, which was far beyond those “notorious” conspicuous brands.

Although no LOGO was printed on the bag, the weaving and designing style of the bag is so unique that the experts can recognize it with even one glance, and thus would show admiration to the bearer of the handbag, which is exactly what they need.

“The rich will not wear the same clothes as we wear. For them, the most embarrassing thing is to dress in a same dress with the others in a party. Therefore, they want their dresses as well as handbags to be unique.” said Mr. Lu. In his familiar circle, luxury brands which could suit to individual needs and do customized services is the most sought after.

A customized European wristwatch brand adopts a very low profile strategy. In China, it takes individual order only. Only after receiving specified orders and requirements from guests, the making of the wristwatch could be started. Throughout the year this brand would make only several or even one wristwatch of a kind. What’s more, to get the product, the buyers often have to wait for a long time.

A similar situation also exists in the fashion industry. It is precisely the low-key, private, and unique style of the customized brand that attract the rich and the celebrities, those top-notch persons.

Hou Mingxiang, manager of Luxury agents Jebsen Group Brand & Communications said that, now when the customers choose watch, they are no longer blindly worshiping those luxury brands. Whether to be high-profile or low profile is not their concerns. What they emphasize is that whether the brand culture and meaning is consistent with their own personality. A German watch brand, though only producing less than 20,000 watches each year, has a unique German flavor. Although its market activities are not as frequent as those ordinary brands, it enjoys great brand loyalty among a fixed group of enthusiasts.

An industry source told reporters that many urban women engaged in the financial industry do not want others to praise her new Prada handbag. What they enjoy doing is to take a beautiful and eye-catching handbag with brand unknown to others. It can always give them a sense of satisfaction.

As they only need to meet the needs of a very limited number of customers, these luxury brands are not interested in public awareness. The long-term service for a few top rich customers is often enough to support the continued existence of the entire brand

Give the Guest Clues to Follow

In order to maintain the independence of their beloved master brand, some designers will design several sub-brand to be the breadwinner.

Hiring Madonna or Sophie Marceau to be the brand spokesperson or publishing gleaming advertisement on fashion magazines are common practice among brands like LV and Dior. However, In Europe and the United States, there are many designer brands catering to smaller elite consumer groups. They never do such a thing as advertising, yet they still maintain a very high price.

Wang Feng in the luxury retail industry told reporters that “designer brands” are also very expensive. However, they are different from traditional luxury brands like LV or Gucci in their marketing ideas. Chief designer though they have, the traditional brands rely on a designer group to design their products, which means not all products are from the chief designer.

By contrast, Niche brand adopt a totally different approach. These brands tend to take names after the designer, emphasis on the designer’s personal style and often stick to the design concept for decades. These designers are often exclusive and conceited in manner; therefore, they do not appreciate the idea of using large LOGO to highlight their own brand. Instead they regard their personalized design as signature on the products. 

As they are unwilling to come under the spotlight, the sales of these niche luxury brands are not large. But these brands tend to have a stable group of enthusiasts who are always in pursuit of being different and unique—-they are bosom friends with those designers. These brands rarely have their own exclusive store. They maintain small-scale sales by opening boutiques in department stores such as the Fifth Avenue , Lane Crawford, as well as Joyce.

Wang Feng finds that in China, not only consumers in the first-tier cities as Beijing, Shanghai, Guangzhou and Shenzhen began to wake up from the worshiping of LOGO, consumers from the third or fourth-tier cities began to show interest in those niche designer brands. These brands through a variety of ways quietly penetrate into China, and received unexpectedly good result among Chinese consumers.


Of course, these designer brands do not always say no to exposure. They just have a more subtle way of delivering messages to its fans. Over the years, they would stick to their classical products, which can be recognized by fans through a single glance. And when new products are launched, they would invite some pop stars and celebrities to wear these dresses.

European and American fashion magazines and forum is interested in “street shooting” of the stars. After wore by certain pop stars, these clothes would soon be searched out by the fans. Let the fans take the initiative to find out about the brand not only to achieve the effect of publicity, sustains the low-profile brand style as well.

However, small-sized sales would bring about pressures on brand management. In order to maintain the independence of their beloved master brand, some designers will design several sub-brand to be the breadwinner. For example, the U.S. designer Marc Jacobs, in addition to having his namesake designer brand, also creates the sub brand Marc by Marc Jacobs, whose price is lower and buyers groups are broader.

Compared with the main brand, these products would use materials of a lower notch. They adopted friendlier marketing approaches and their profit can also help with the development of the main brand.

Wang Feng said that compared with the popular designer brands in the United States, the European family of luxury brands still retain the ancient workshop of the ” with shop in the front and workshop at the back.” This is a tradition of many generations. Their workmanship is superb, but they stubbornly refused commercialization, and are unwilling to give their own brands to factory abuse. They still only produce for a few enthusiasts. Against the backdrop of the financial crisis, many of these brands are having difficulties to support themselves, and eventually they are very like to be acquired or even go bankrupt.

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