HONG KONG — China might have huge potential for luxury brands in the long run, but companies should take things at a slow, steady pace in entering the market, according to industry executives.
Christian Blanckaert, executive vice president in charge of international affairs at Hermès International, said the mainland should be entered over time in part because few cities are open to luxury items, even though the country is so vast.
“China is small for [Hermès] and we have a lot to do to try to touch the heart of the Chinese people,” he said during a speech on the second day of the International Herald Tribune’s conference, “Luxury 2004: The Lure of Asia.” It isn’t a market to be penetrated immediately, he continued. “I think we have plenty of time.”
Blanckaert sees the country as more of a key source of inspiration for Hermès than a market to sell its products. Even with the slower approach, “Hermès will succeed because it will remain Hermès,” he predicted.
Hermès has seven shops in Hong Kong and three in mainland China. It has a shop in the Peninsula Palace in Beijing as well as in the airports of Shanghai and Beijing, according to its Web site.
Francis Gouten, regional chief executive of Richemont Asia Pacific, said the Swiss group’s 15 brands have been in the Far East for 30-plus years. Currently, 12 of its brands are distributed in China with three others — Chloé, Van Cleef & Arpels and A. Lange & Sohne — joining soon. Its other brands include Cartier, Montblanc, Dunhill and Shanghai Tang.
For its business in the Far East, all markets have hit double-digit growth, with sales in the Asia-Pacific region alone rising to 360 million euros, or $479.5 million at current exchange, for the first six months ended Sept. 30.
The group’s advantage is having management and staff of the brands present in the market for many years, which brings knowledge and better management of the local situation, said Gouten. Richemont is focusing on developing its presence in the central cities of China.
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