The second and third tier cities gradually become the main battlefield of the high-end consumer brand. Ogilvy China's consumer insights and trend research team also released January 7, said consumers in second and third tier cities in China are about China and the world economy. All brands put ads in the second and third tier cities in 2011 of up to 2.2 trillion yuan, four times as much as the First-tier cities.
Yanlord Land (Chengdu) general manager Huang Zhongxing this pleasure: "We are on the original intention of the city to do the luxury market in Chengdu is very correct."
Although the comparison to Europe, the United States and Hong Kong, the price of luxury goods in China more expensive by 30% or even doubled, but this does not affect the strong spending power and business opportunities in these Chinese "屌 silk city". The renowned investment bank Goldman Sachs recently released data show that in 2012, the Chinese luxury goods throughout the year spent $ 46 billion $ 18.9 billion, including the territory of consumer.
The second and third tier cities gradually become the main battlefield of the high-end consumer brand. Ogilvy China's consumer insights and trend research team also released January 7, said consumers in second and third tier cities in China are about China and the world economy. All brands put ads in the second and third tier cities in 2011 of up to 2.2 trillion yuan, four times as much as the First-tier cities.
LV exodus
Recently, one from Beijing, Shanghai's 30-person tour group traveled to the European circle, and also brought back a lot of luxury brands. Shen Li, a senior fashion editor, is one of these 30 people, she was surprised to find that, "cargo sweeping" action is not an LV.
Beijing, Shanghai and other places, has gradually spent a few years ago, "not wait for a staff LV, whether true or false" crazy period of growth. Shen Li analyzed from the perspective of fashion LV [microblogging] Gucci [micro-Bo] traditional luxury brands in China's first-tier city consumers increasingly "fall from grace" reasons, she said, and now first-line urban consumers in the purchase of luxury goods the pursuit of a more go LOGO ", they are becoming increasingly rational, mature, like LOGO less obvious brands such as Prada, and the most popular in the last couple of years, Celine, BV, a small minority, low-key brand.
Data to prove this point. Concentrated LV high-end consumers in Beijing, Shanghai city, store sales every year decline 5-10%. They also stepping up internal adjustment mode, hoping to retain the top consumers, but the result was disappointing. " Shen Li said.
She believes that one of the reasons that the LV in China, mainly to promote the low-end products which. LV basic models of products in foreign countries, a lot of ordinary people and even nanny to spend. "Of course, compared to advance into the Chinese market, LV, Gucci, etc., with more luxury brands to enter the Chinese market, and the Chinese luxury brand awareness deepened, the diversion of part of the LV sales is one of the reasons."
Saturation of the luxury goods market in China's first-tier cities, to the second and third tier cities market opportunities. LV have gradually increased in the second and third tier cities of Wuhan, Changsha, Zhengzhou, Shenyang, Harbin, Urumqi, shop efforts. This makes the Chinese market flush with Japan, become LVMH Group 2011 sales exceeded 23.7 billion euros in the largest market share of the contributors.
In September 2012, LV 42 stores open in China in Shijiazhuang, the capital of Hebei Province. North of Hong Kong, a jewelry brand marketing responsible person said, the first LV Shijiazhuang shop where Square because LV settled, causing many brands competing to enter.
The official also said that, in fact, Shijiazhuang are not a second-tier city, but business is still good LV stationed slowly other international luxury brands will be in attendance. Market in the north, the luxury brand is preparing to enter the second and third tier cities Taiyuan, Datong, Baoding, Handan, Hohhot, Baotou and so fast.
You can not underestimate the spending power of the second and third tier cities. It is understood, LV reason to open a flagship store in Chengdu, has ranked China top three because the previous LV Chengdu outlet store up to 900 million yuan of annual sales, second only to Beijing and Shanghai; Prada, Ermenegildo Zegna and other brands The performance has been ranked in Chengdu, China's third.
The research report "in-depth China: Change and Continuity", Ogilvy & Mather research team third in the past seven years, the focus in this market. The report re-examine the second and third tier cities market - in the past few years, with the development of the network, as well as second and third tier of urban residents' income growth, as followers of large cities, their consumption concept "more and more synchronized with the first-tier cities," .
Gun Sword, senior director of consumer insights for Ogilvy China's consumer insights and trend research team revealed that the two fourth-tier cities in China has a huge consumer groups in 200 million households. In 2011, the first-tier cities residents have disposable income amounted to 1 trillion yuan, two or four lines total disposable income of urban residents is about 8 trillion yuan.
"As a rule of thumb, the sensitivity of the fashion and trend of China's second-and third-tier cities later than the first-tier cities 3 to 5 years. Few years ago, the most popular in Beijing, Shanghai and other places LV, Gucci trend just transmitted to the second-and third-tier cities, and now the latest trend of Beijing, Shanghai and have not affected them. "Shen Li said.
The high-end consumer, "the countryside"
Similarly, in recent years, the luxury hotel to open up China's second and third tier cities market is in full swing and luxury. Sheraton, Sofitel, Intercontinental, Westin, and even including the Ritz-Carlton collective appeared in the streets of Tianjin, Zhengzhou, Wuhan, Changsha, and Urumqi. According to Chongqing Sofitel PR Manager Wang Qi, only 2012 Chongqing newly opened five-star hotel as many as five, including Kempinski, Hyatt, Hilton.
"First-tier city market increasingly saturated, especially in the hotel industry and Lots position, a good location is the patch of land is hard to find., Must be moved to the second and third tier cities. Third tier cities with the improvement of living standards and economic activities strengthened, also formed a certain source. "senior hotel management staff Caiyu Ling said.
"It is for the consideration of future market layout, and competitors, which requires the establishment of group superiority, the formation of a national brand value," Song Xiang, chairman of HNA Hotel Group, said, "particularly in the current second and third tier cities land prices generally rose background, if they are not shot, the future costs may be greater. "
However, to expand sales and luxury goods in China's second and third tier cities, plundering more profit, the new luxury hotel opened in two or three cities, basically at a loss. Song Xiang said, "This is not just growing problem due to include market source of the second and third tier cities Beijing, Shanghai and so many a thousand rooms compared to the price per night; every turn and Beijing, Shanghai and other places, Room prices of second and third tier cities are usually only about six to eight hundred yuan. "
Another obvious high-end consumer "countryside" case is wine. Zhang Xiang, a Shanghai Wine Co. chairman, he thinks, wine consumption boom is quietly undergoing a change from the first-tier cities turned to the second and third tier cities. Liquor market, it is more accurate to say that penetrate to the first-tier cities from the coast inland second and third tier cities.
In his view, the Chinese people drink wine, should be started from these economically more developed provinces of Guangdong, Fujian, Zhejiang, and later developed to Shandong. Point a clear transfer of consumption growth in 2011, this year, the slowdown in economic growth in the Yangtze River Delta region, the plus before continuing accumulation wine investment bubble burst.
Almost all importers and agents are aware of the first-tier market has entered a relatively stable the dynamic equilibrium barriers period, the second and third tier cities with strong spending power is the focus of market development.
Zhang Xiang, the company is only in the month of December last year, to do a wine tasting, the venue for all second and third-tier cities, such as Changsha, Wuhan, Kunming and Langfang. As a the circle very experienced wine lecturer, Qi Shaoren lectures arrangements insight into the initiation of the change, one of his recent "job" is a golf club in Kunming, wine speak for a bank's private banking clients .
Zhang Xiang think this is the inevitable result of years of market education. In fact, the process of changes in market structure quickly. 2003 I went to Beijing Houhai Bar not drink wine in Mengguan the Tsingtao Brewery [microblogging] (33.83, -0.41, -1.20%). Nobody knew Latour, everyone says good wine acid, only Rafi, it was said that it sounds very familiar. "Qishao Ren said.
Consideration of the city
With the first-tier cities, similar to Wanda Plaza the Yanlord Landmark city format become an important place for the second and third tier cities branded consumer. The Lingyun sword that the administrative features of China's urban development, the integrated format of these cities and local government planning.
Of Qingdao Hisense [microblogging] Trading Company in the East China Sea Planning Department official said, Hisense Plaza, the highest concentration of stores in Qingdao luxury brands. Hisense Plaza, the latest senior department stores + SHOPPING-MALL "a combination of formats, the proportion reached 80% of the brand's total world-class brand.
In the past decade, this concentration of commercial real estate to sink to two fourth-tier cities in China. The Beijing Jinbao summary manager Lu Yi believes that this sinking is driven by luxury goods companies. "If these luxury brands into the second and third tier cities, developers dare."
Yanlord Land (Chengdu) general manager Huang Zhongxing think this is also related with the government planning.
Based on the idea of the Chengdu Municipal Bureau of Commerce, Chengdu placed on the western part of the international brands to strive to become the first station and internationally renowned fashion consumer destination. They made a goal of "Every year the introduction of internationally renowned brands and businesses 20, 2015, the western part of the international brands will reach more than 80% run first degree". "Luxury" and "luxury Appreciation two thick books, placed in Chengdu Jinjiang Business Secretary Zhang Weidong desk. He hope to able to hit the Jinjiang District, resulting in the western region of the luxury enclave. At present, the number and area of the scale of the flagship stores of international brands stationed in Jinjiang District has been ranked third in the domestic first western.
In order to achieve the goal, the Chengdu Business Bureau has developed a well-known international brand suppliers, operators, agents and promoters incentive mechanism. Jinjiang District has also introduced measures to give a subsidy of up to 50 million renovation of the newly settled in the Jinjiang District internationally renowned brand enterprises ".
The Yanlord Singapore is the incoming investment planning. Under the conduction of such planning, the owners of the city's comprehensive format also settled in the luxury and high-end consumer brand as to enhance the taste of the city's commitment to the right place, and therefore will throw various promotions such as olive branch to the high-end brands.
SONG Jian-chao, Chengdu Retail Industry Association, Chengdu, the introduction of international brands in order to attract the customers of the surrounding areas. Meanwhile, the luxury retail can bring huge tax contributions. It is reported that the consolidated tax rate at around 10% of the supermarket, the mall luxury combined tax rate is as high as 50%.
Mall owners other considerations, will bring in other brands such as LV settled flocked.
In fact, in accordance with the normal indicators, many second-and third-tier cities such as Shijiazhuang, Handan can not achieve the stringent requirements of the luxury brands. Previously, these international brands new site study period of at least two to three years, "can never be completed within a year." North of Hong Kong, a jewelry brand marketing official said.
The international company is very particular about the data, in addition to the team dispatched personally visited, will hire a third-party consulting firm to provide information. Data of the local population, GDP level, the per capita disposable income, a simple peripheral data of per capita consumption level, a measure of economic activity, spending power, the old and the new business district and so as the content of the survey is strictly evaluate.
But now, the situation is very different. The official said that even if some parameters were significantly up to less than the requirements of the luxury brands, but they want to capture the market. "Plus our mall really heroic, offers many temptations." He said, according to the present situation, a luxury brand's new store visits shorten the preparation period of a year, which also includes the renovation period of two to three months ordering time, professional staff recruitment training period and so on.
The official witnessed many recruitment meeting, shopping malls frequently offered two or three million renovation costs, still point deduction, as far as management fees to the big none other. He also revealed that starting from the second half of 2011, the department store owners began to adjust the original first floor of gold jewelry brand to the upstairs to make way for the international luxury brands, now this phenomenon has been very common.
In a second-tier cities, a local department store's most influential is the transformation and upgrading, Dior, Chanel [microblogging], have been stationed in using the lease expires, department stores began prior to the sale of the pillar - the Volkswagen brand eviction notice.
The luxury goods distribution center in Hangzhou Hubin Street also experienced this transformation. Intime 50% equity invested 526 million yuan acquisition Hubin Street in 2007, this famous project is the transformation and some brands that are inconsistent with the blocks positioned invited into the high-end brands to existing brand line.
LV new president, 48-year-old Spaniard Jordi Constance in terms of the need to make trade-offs, LV sales, to grab more market share, to achieve the effect of puerile, or maintain the noble sense of the brand? The brand has lost its mysterious and noble sense, consumers will be a lot of pursuit "rare" to give up.
Shen Li, conduction effect will show future second and third tier markets will not like so obsessed with a particular brand. "Gun Sword also think that the future of China's high-end consumer market diversified trend, the second third tier cities consumers not just followers of the first-tier cities, may in turn affect the spending habits of the first-tier cities.
Yanlord Land (Chengdu) general manager Huang Zhongxing this pleasure: "We are on the original intention of the city to do the luxury market in Chengdu is very correct."
Although the comparison to Europe, the United States and Hong Kong, the price of luxury goods in China more expensive by 30% or even doubled, but this does not affect the strong spending power and business opportunities in these Chinese "屌 silk city". The renowned investment bank Goldman Sachs recently released data show that in 2012, the Chinese luxury goods throughout the year spent $ 46 billion $ 18.9 billion, including the territory of consumer.
The second and third tier cities gradually become the main battlefield of the high-end consumer brand. Ogilvy China's consumer insights and trend research team also released January 7, said consumers in second and third tier cities in China are about China and the world economy. All brands put ads in the second and third tier cities in 2011 of up to 2.2 trillion yuan, four times as much as the First-tier cities.
LV exodus
Recently, one from Beijing, Shanghai's 30-person tour group traveled to the European circle, and also brought back a lot of luxury brands. Shen Li, a senior fashion editor, is one of these 30 people, she was surprised to find that, "cargo sweeping" action is not an LV.
Beijing, Shanghai and other places, has gradually spent a few years ago, "not wait for a staff LV, whether true or false" crazy period of growth. Shen Li analyzed from the perspective of fashion LV [microblogging] Gucci [micro-Bo] traditional luxury brands in China's first-tier city consumers increasingly "fall from grace" reasons, she said, and now first-line urban consumers in the purchase of luxury goods the pursuit of a more go LOGO ", they are becoming increasingly rational, mature, like LOGO less obvious brands such as Prada, and the most popular in the last couple of years, Celine, BV, a small minority, low-key brand.
Data to prove this point. Concentrated LV high-end consumers in Beijing, Shanghai city, store sales every year decline 5-10%. They also stepping up internal adjustment mode, hoping to retain the top consumers, but the result was disappointing. " Shen Li said.
She believes that one of the reasons that the LV in China, mainly to promote the low-end products which. LV basic models of products in foreign countries, a lot of ordinary people and even nanny to spend. "Of course, compared to advance into the Chinese market, LV, Gucci, etc., with more luxury brands to enter the Chinese market, and the Chinese luxury brand awareness deepened, the diversion of part of the LV sales is one of the reasons."
Saturation of the luxury goods market in China's first-tier cities, to the second and third tier cities market opportunities. LV have gradually increased in the second and third tier cities of Wuhan, Changsha, Zhengzhou, Shenyang, Harbin, Urumqi, shop efforts. This makes the Chinese market flush with Japan, become LVMH Group 2011 sales exceeded 23.7 billion euros in the largest market share of the contributors.
In September 2012, LV 42 stores open in China in Shijiazhuang, the capital of Hebei Province. North of Hong Kong, a jewelry brand marketing responsible person said, the first LV Shijiazhuang shop where Square because LV settled, causing many brands competing to enter.
The official also said that, in fact, Shijiazhuang are not a second-tier city, but business is still good LV stationed slowly other international luxury brands will be in attendance. Market in the north, the luxury brand is preparing to enter the second and third tier cities Taiyuan, Datong, Baoding, Handan, Hohhot, Baotou and so fast.
You can not underestimate the spending power of the second and third tier cities. It is understood, LV reason to open a flagship store in Chengdu, has ranked China top three because the previous LV Chengdu outlet store up to 900 million yuan of annual sales, second only to Beijing and Shanghai; Prada, Ermenegildo Zegna and other brands The performance has been ranked in Chengdu, China's third.
The research report "in-depth China: Change and Continuity", Ogilvy & Mather research team third in the past seven years, the focus in this market. The report re-examine the second and third tier cities market - in the past few years, with the development of the network, as well as second and third tier of urban residents' income growth, as followers of large cities, their consumption concept "more and more synchronized with the first-tier cities," .
Gun Sword, senior director of consumer insights for Ogilvy China's consumer insights and trend research team revealed that the two fourth-tier cities in China has a huge consumer groups in 200 million households. In 2011, the first-tier cities residents have disposable income amounted to 1 trillion yuan, two or four lines total disposable income of urban residents is about 8 trillion yuan.
"As a rule of thumb, the sensitivity of the fashion and trend of China's second-and third-tier cities later than the first-tier cities 3 to 5 years. Few years ago, the most popular in Beijing, Shanghai and other places LV, Gucci trend just transmitted to the second-and third-tier cities, and now the latest trend of Beijing, Shanghai and have not affected them. "Shen Li said.
The high-end consumer, "the countryside"
Similarly, in recent years, the luxury hotel to open up China's second and third tier cities market is in full swing and luxury. Sheraton, Sofitel, Intercontinental, Westin, and even including the Ritz-Carlton collective appeared in the streets of Tianjin, Zhengzhou, Wuhan, Changsha, and Urumqi. According to Chongqing Sofitel PR Manager Wang Qi, only 2012 Chongqing newly opened five-star hotel as many as five, including Kempinski, Hyatt, Hilton.
"First-tier city market increasingly saturated, especially in the hotel industry and Lots position, a good location is the patch of land is hard to find., Must be moved to the second and third tier cities. Third tier cities with the improvement of living standards and economic activities strengthened, also formed a certain source. "senior hotel management staff Caiyu Ling said.
"It is for the consideration of future market layout, and competitors, which requires the establishment of group superiority, the formation of a national brand value," Song Xiang, chairman of HNA Hotel Group, said, "particularly in the current second and third tier cities land prices generally rose background, if they are not shot, the future costs may be greater. "
However, to expand sales and luxury goods in China's second and third tier cities, plundering more profit, the new luxury hotel opened in two or three cities, basically at a loss. Song Xiang said, "This is not just growing problem due to include market source of the second and third tier cities Beijing, Shanghai and so many a thousand rooms compared to the price per night; every turn and Beijing, Shanghai and other places, Room prices of second and third tier cities are usually only about six to eight hundred yuan. "
Another obvious high-end consumer "countryside" case is wine. Zhang Xiang, a Shanghai Wine Co. chairman, he thinks, wine consumption boom is quietly undergoing a change from the first-tier cities turned to the second and third tier cities. Liquor market, it is more accurate to say that penetrate to the first-tier cities from the coast inland second and third tier cities.
In his view, the Chinese people drink wine, should be started from these economically more developed provinces of Guangdong, Fujian, Zhejiang, and later developed to Shandong. Point a clear transfer of consumption growth in 2011, this year, the slowdown in economic growth in the Yangtze River Delta region, the plus before continuing accumulation wine investment bubble burst.
Almost all importers and agents are aware of the first-tier market has entered a relatively stable the dynamic equilibrium barriers period, the second and third tier cities with strong spending power is the focus of market development.
Zhang Xiang, the company is only in the month of December last year, to do a wine tasting, the venue for all second and third-tier cities, such as Changsha, Wuhan, Kunming and Langfang. As a the circle very experienced wine lecturer, Qi Shaoren lectures arrangements insight into the initiation of the change, one of his recent "job" is a golf club in Kunming, wine speak for a bank's private banking clients .
Zhang Xiang think this is the inevitable result of years of market education. In fact, the process of changes in market structure quickly. 2003 I went to Beijing Houhai Bar not drink wine in Mengguan the Tsingtao Brewery [microblogging] (33.83, -0.41, -1.20%). Nobody knew Latour, everyone says good wine acid, only Rafi, it was said that it sounds very familiar. "Qishao Ren said.
Consideration of the city
With the first-tier cities, similar to Wanda Plaza the Yanlord Landmark city format become an important place for the second and third tier cities branded consumer. The Lingyun sword that the administrative features of China's urban development, the integrated format of these cities and local government planning.
Of Qingdao Hisense [microblogging] Trading Company in the East China Sea Planning Department official said, Hisense Plaza, the highest concentration of stores in Qingdao luxury brands. Hisense Plaza, the latest senior department stores + SHOPPING-MALL "a combination of formats, the proportion reached 80% of the brand's total world-class brand.
In the past decade, this concentration of commercial real estate to sink to two fourth-tier cities in China. The Beijing Jinbao summary manager Lu Yi believes that this sinking is driven by luxury goods companies. "If these luxury brands into the second and third tier cities, developers dare."
Yanlord Land (Chengdu) general manager Huang Zhongxing think this is also related with the government planning.
Based on the idea of the Chengdu Municipal Bureau of Commerce, Chengdu placed on the western part of the international brands to strive to become the first station and internationally renowned fashion consumer destination. They made a goal of "Every year the introduction of internationally renowned brands and businesses 20, 2015, the western part of the international brands will reach more than 80% run first degree". "Luxury" and "luxury Appreciation two thick books, placed in Chengdu Jinjiang Business Secretary Zhang Weidong desk. He hope to able to hit the Jinjiang District, resulting in the western region of the luxury enclave. At present, the number and area of the scale of the flagship stores of international brands stationed in Jinjiang District has been ranked third in the domestic first western.
In order to achieve the goal, the Chengdu Business Bureau has developed a well-known international brand suppliers, operators, agents and promoters incentive mechanism. Jinjiang District has also introduced measures to give a subsidy of up to 50 million renovation of the newly settled in the Jinjiang District internationally renowned brand enterprises ".
The Yanlord Singapore is the incoming investment planning. Under the conduction of such planning, the owners of the city's comprehensive format also settled in the luxury and high-end consumer brand as to enhance the taste of the city's commitment to the right place, and therefore will throw various promotions such as olive branch to the high-end brands.
SONG Jian-chao, Chengdu Retail Industry Association, Chengdu, the introduction of international brands in order to attract the customers of the surrounding areas. Meanwhile, the luxury retail can bring huge tax contributions. It is reported that the consolidated tax rate at around 10% of the supermarket, the mall luxury combined tax rate is as high as 50%.
Mall owners other considerations, will bring in other brands such as LV settled flocked.
In fact, in accordance with the normal indicators, many second-and third-tier cities such as Shijiazhuang, Handan can not achieve the stringent requirements of the luxury brands. Previously, these international brands new site study period of at least two to three years, "can never be completed within a year." North of Hong Kong, a jewelry brand marketing official said.
The international company is very particular about the data, in addition to the team dispatched personally visited, will hire a third-party consulting firm to provide information. Data of the local population, GDP level, the per capita disposable income, a simple peripheral data of per capita consumption level, a measure of economic activity, spending power, the old and the new business district and so as the content of the survey is strictly evaluate.
But now, the situation is very different. The official said that even if some parameters were significantly up to less than the requirements of the luxury brands, but they want to capture the market. "Plus our mall really heroic, offers many temptations." He said, according to the present situation, a luxury brand's new store visits shorten the preparation period of a year, which also includes the renovation period of two to three months ordering time, professional staff recruitment training period and so on.
The official witnessed many recruitment meeting, shopping malls frequently offered two or three million renovation costs, still point deduction, as far as management fees to the big none other. He also revealed that starting from the second half of 2011, the department store owners began to adjust the original first floor of gold jewelry brand to the upstairs to make way for the international luxury brands, now this phenomenon has been very common.
In a second-tier cities, a local department store's most influential is the transformation and upgrading, Dior, Chanel [microblogging], have been stationed in using the lease expires, department stores began prior to the sale of the pillar - the Volkswagen brand eviction notice.
The luxury goods distribution center in Hangzhou Hubin Street also experienced this transformation. Intime 50% equity invested 526 million yuan acquisition Hubin Street in 2007, this famous project is the transformation and some brands that are inconsistent with the blocks positioned invited into the high-end brands to existing brand line.
LV new president, 48-year-old Spaniard Jordi Constance in terms of the need to make trade-offs, LV sales, to grab more market share, to achieve the effect of puerile, or maintain the noble sense of the brand? The brand has lost its mysterious and noble sense, consumers will be a lot of pursuit "rare" to give up.
Shen Li, conduction effect will show future second and third tier markets will not like so obsessed with a particular brand. "Gun Sword also think that the future of China's high-end consumer market diversified trend, the second third tier cities consumers not just followers of the first-tier cities, may in turn affect the spending habits of the first-tier cities.
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