Paul French

Shopping in a secluded environment of private houses for sometimes personalized high-end items adds a new feature to the way how wealthy Chinese prefer to spend their money. Retail analyst Paul French comments in the Sydney Morning Herald on a new feature.

The Sydney Morning Herald:

Hermes, a brand built on the principle of quiet luxury, recently broke with tradition to craft a garish “Chinese flag” version of its Birkin handbag. Louis Vuitton flies its high rollers to camel polo matches in Mongolia. Dunhill has a private members’ club in Shanghai, the KEE Club, and in Shanghai and Hong Kong, Alfie’s, a British gastropub.

“Dunhill was the first one to do it with their private house,” says Paul French, chief China market strategist at Mintel.

“You would be amazed at how many people want to spend time in a shop. I think there are going to be a lot more of these concepts. Putting walls around everything is important in China. Once you are inside the walls, it is all about eliteness and imperial grandeur”.

The move comes against a backdrop of slowing growth. The days of 20 to 30 per cent annual growth in the luxury market may be over, much to the chagrin of companies such as Burberry…

The response for many companies has been an old marketing trick: limited editions, certificates, personal invitations. At Louis Vuitton’s flagship stores, certain floors are by invitation only.

In the Chinese hinterlands, meanwhile, many luxury brands will sell only accessories – handbags and wallets – while keeping their full range for Beijing and Shanghai.

“Companies like Gucci cannot sell their brown logo bags any more because they are too ubiquitous. So they do special lines of rare skin bags which you would not find in Europe or the United States,” says Mr French.

Mont Blanc produced a Dragon pen, Rolls-Royce has a China-only Year of the Dragon car and La Perla produces lingerie embroidered with dragons.

Unlike the heyday of the Japanese market in the 1980s and 1990s, Chinese customers have proved more fickle. “The Chinese like the idea that you can speculate on products as a way of diversifying assets, and these limited editions come with certificates and could hold their wealth,” Mr French says.

More in the Sydney Morning Herald.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

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