SHANGHAI — With luxury brands from all over the world descending on the China market, a shortage of qualified and experienced high-end salespeople is forcing many international players to find new solutions to source employees.
It might seem nonsensical that a country with a population of 1.3 billion would be the site of serious staff shortages. But as many brands have discovered in the fast-growing Chinese market, good salespeople are hard to come by.
In response to those dynamics, Compagnie Financière Richemont recently opened what it claims to be China’s first specialist luxury retail academy late last year. Its most recent group of students begin their studies this week. Similarly, Dior is planning to open a Chinese campus of its Dior Academy to train new employees.
According to Renee Hartmann, co-founder China consumer strategy consultancy group, China Luxury Advisors, there are a number of reasons for the shortage, the most obvious being a lack of service history in China.
“Excellent service is a relatively new concept in China, and most people are not accustomed to experiencing great service. The lack of respect and tradition for service quality makes it difficult for most retail staff to really recognize and provide luxury class service,” she said.
As new brands arrive, and those already with a presence in China aggressively expand inland, to China’s second- and third-tier cities, the shortage is becoming more pronounced, as locally-sourced staff often have far less familiarity with international sales standards than their first-tier compatriots in cities such as Beijing and Shanghai.
This intensifying competition for skilled service people, as well the very common inclination of young Chinese employees to “tiao cao” or “jump jobs” in order to better their wages and conditions, has led to a veritable poaching war between brands, according to Hartmann.
Thought it many not have mattered only a few years ago, as Chinese consumers buy more luxury goods, they are also becoming more educated about what they should be paying for in terms of quality and service.
Ouyang Kun, head of the Beijing office of the World Luxury Association, an independent market research group, said Chinese consumers often paid a luxury price for international brands without receiving the standard of service offered by the same brand in other markets.
“Some luxury goods sellers see China as a place to make easy money. They bring in the goods but fail to deliver in terms of delivering value for money on the brand,” Kun said.
As more and more Chinese travel abroad in order to buy luxury goods, they are sizing up overseas service standards and are, naturally, inclined to expect the same level of service when they shop for the same brands domestically.
One of the major differences between recruitment markets in Europe and China are the number of highly-educated, MBA graduates in China who have an interest in luxury and are willing to start their careers as sales associates, Christian Dior president Sidney Toledano said during a recent trip to Shanghai. “You don’t see that in Europe,” he said.
Toledano added that after seeing Chinese trainees in action at the Dior Academy in Paris, he has high hopes for the future of luxury service in China, which he expects to grow exponentially over the next few years. Plans are also afoot for a Chinese campus of the Dior Academy.
“The greatest advantage is to have the best service and the best people. I wouldn’t be surprised to see in the next five years, to see the service in China catch up to, and even surpass, Europe,” Toledano said.
Richemont opened its first luxury retail academy late last year. Located in a high-rise building on one of Shanghai’s premier shopping streets, Huai Hai Road, it took in its first batch of students in November. There are iPads and laptops lining the pristine white benches, luxury coffee-table titles on the bookshelves of the high-tech learning establishment.
The second and most recent graduating class at the academy numbered 33 young people between the ages of 22 and 28, picked from a pool of 2,700 applicants. Some of them are fresh out of school, but Richemont said it said it prefers applicants with at least a couple years of experience in the service industry.
Each course can accommodate a maximum of 50 students. The nine-week course includes a combination of classroom and boutique-based training covering topics such as “The World of Luxury”, “Watches”, “Etiquette and Grooming” and “The Importance of Service”. Richemont owns Cartier, Chloé, Piaget, Vacheron Constantin, Mont Blanc and Dunhill.
Eventually Richemont plans to have as many as 250 graduates per year. The company will assign those newly-trained workers to one of the group’s maisons around China or perhaps even around the world, given the growing demand for mandarin-speaking sales staff at overseas boutiques.
“We set up the first retail academy in China mainly because the China market is very big in terms of share and scale to the group and the growth is very rapid. Many maisons under Richemont Group are facing a shortage of sales talents, thus our group decided to recruit sales talents on a large scale to meet the market’s requirement,” said Alain Li, chief executive of Richemont Group Asia Pacific.
According to Thomas Lindemann, HR director of the Richemont Group, admission to the academy is selective.
“We assess candidates by their learning ability, adaptability, motivation, fitness and how they present themselves. In Richemont, we are looking for individuals who possess diplomacy, empathy, are service-oriented, a team player, able to close a sale, and are also a hard worker,” he said.
One of the academy’s first crop of successful graduates, 24-year-old Daiting Shen is now a sales associate at a Cartier boutique in Shanghai. She believes one major advantage of completing the Richemont Academy program is the head start it gives trainees in understanding the luxury industry from the inside.
“The program provided me with lots of professional knowledge and skills. Before this, I was an outsider; my knowledge of luxury business was acquired from the media,” Shen said. “But after learning from the program and starting to work, I came to know what it really takes to be in the business.”