Introduction
Post-1980s is the decade when the greater majority of China and basically Hong Kong are preparing for the inevitable turn-over of Hong Kong to mainland China. This period, however has been described as still an era when Hong Kong defined influence in the Asian fashion scene that extended its clout even in the conservative mainland China.
The presence of European and generally western expatriates in Hong Kong for a long period has shown not only the extent of economic but also lifestyle influence that locals and Hong Kong residents or even visitors have adopted. Luxury fashion was definitely included and widely reflected.
This chapter of the paper investigate the most effective media tools available to the Western luxury fashion brands for the “post-1980s” consumer market in China.
While it is recognised that the total luxury market is growing to US$2 trillion by 2010, the market was described as still basically controlled by some 35 companies from Europe and the US (60%) led by brands Giorgio Armani, Gucci, Versace and Christian Dior (Just Style, 2006). Just Style (2006) reported that luxury fashion represents about 5 percent of the total luxury market translating to about US$50 billion led by LVMH, Gucci group and Christian Dior Couture. In the UK, luxury clothing and fashion remain as one of the more palatable as the market maintains some £32 billion in 2002 alone. In 2005, LVMH Moet Hennessy Louis Vuitton posted a revenue rise to $13.90 or £9.57 billion from the previous year’s $12.48. In September 2006, it has reported a first half pre-tax profits of £1.519 billion indicating 45 percent coming online. Paris-based PPR SA Gucci, that also houses Yves Saint Laurent, Fnac and Surcouf, is included in the report of PPR SA with a 2006 July-September revenue of $5.35 billion (AP, 2006).
Western luxury fashion have always been set apart despite the forces of other global brands, specifically Asian, and segmentation in the UK has actually been categorised as: McFashion, UK or London style, international superbrands, and the micro markets (Priest, 2005). However, another trend called McFashion coined by Lee (2003) after the McDonald marketing phenomenon of uniformity and predictability has been classified as disposable, quick fix international fashion, trendy, and affordable by the mass market. It most distinct qualities include star qualities that shine and busts in a short period, or those which fill high street cheap chic stores working to formulas. These are considered as the speedy trickle down version of high couture exemplified by celebrities that are replicated, but not exactly copied to give room for versatility, in a matter of ten minutes (Jackson, 2006). These brands include items that are found and purchased at Gap, H & M, Zara, Marks and Spencer, Arcadia group, Asda, Tesco, Sainsbury, Primark and New Look (Priest, 2005).
On the other hand, international superbrands include designer brands that are familiar in many major cities of the world including Hong Kong, Taiwan, Beijing, Manila, Bangkok, Bombay, and today may cities of the Peoples Republic of China. These brands considered globally as luxury include Giorgio Armani, Yves Saint Laurent, Gucci, Guess, Burberry, Louis Vuitton, and Veneta Bottega, Chanel, among others. With couture as the word, luxury fashion has been incorporated with designer label (Priest, 2005) with the message that the label is critical, super-luxury, rarity and quality. Despite its “exclusive” and elusive characteristics, these designer labels remain big business with high stakes as influenced by class, film and music stars, sports personalities, financial status, and everything glamour.
It is further driven by the extensive marketing strategies, media circus, couture and ready-to-wear fashion shows. While international luxury fashion houses acknowledge of limited loyal customers, barely 200 with majority of sales as wedding dresses (Priest, 2005), it has been reported that UK alone spent £1.4 billion on these items in 2002 and its value kept rising up to 40 percent with prices at premium. It was reported that women accounted for 57 percent of purchase but rarity on designer labels is slowly if not yet phased out. As Tim Jackson (2002) from the London College of fashion quoted foremost names in fashion superlabels Tom Ford of PPR acknowledging globalisation as inevitable, John Marc Simon of Comite Colbert and Daniel Triboulliard specify China, Taiwan and Korea as the major destinations of the majority of luxury labels.
Acceleration of new wealth in new markets as well as the global fusion of what people and consumers watch on their movies, television and media emerged as the driving forces as growth is the main target of all major designer houses. In addition, higher level of taste, education and worldliness as a result of education, travel and growing sophistication are the other forces that define new middle market customers that are ready to pay for premium, well-designed, well-engineered, well-crafted and expensive goods that include luxury fashion (Silversteine and Fiske, 2003).
In the UK and London scene alone, fashion is still considered extraordinarily rich: a creative mix distinctively UK since the 1960s called “Swinging London” or “Cool Brittania” and other marketing slogans. UK design school products, acknowledged at around 3000 annually add up global influence in the fashion sense as most are not exclusive designers but design technologists, fashion buyers and purchasing agents, stylists, fashion journalists, pattern cutters, publicity communications specialists and a broad range of fashion and media-related jobs (Priest, 2005). While others may start out new labels of their own, work on a freelance basis, others have tied up with merchants to go international or promote their own brands such as the case for Stella McCartney, Katharine Hamnett, John Rocha, Betty Jackson, Alexander McQueen, and Paul Smith (Priest, 2005). There are also those that maintained low profile with constant and steady clientele, remained small, and can only be found in creative or trendy areas of cities in the UK rejecting commodisation of fashion. These designers and their outlets remained alternatives if not the constant drivers of style and unique creations as supported by a group of creative friends, journalists and those in-the-know. In fact, although this phenomenon, recognised to be around for forty years now, have shown local presence in most major cities but maybe falsely credited to be of London in origin (Priest 2005) as other cities, mirrored through media, are perceived with their own versions.
Priest (2005) further categorised global fashion into another “micro markets’ with similarities to UK or London style fashion although placed in a bracket of “hedonistic, self-focused baby boomers, and they have forsaken the trappings of retirement for clubbing, hiking and pleasure seeking.” This segment is further described to react against brands and branding although influenced by brand values, preferring to be their own stylists as may be the result of education encouraging personal views and exposure, aim for personal gratification, style recognition, ethics and individuality (Priest, 2005). This group has been recognised as mood consumers heavily influenced by the increased consciousness on health, well-being and spirituality, recognition of quality and craftsmanship, and the so-called “added value” or products that go well-beyond purchase and wearing.
With the rise of global marketing pushed harder by the broadband internet connection, mobility and growing economies outside the western sphere Europe, Canada and the United States, various fashion and clothing trends that have been identified include the threat of low-priced new players against established fashion brands, the diffusion of established western markets, the global expansion of luxury brand consumers from an elite group to mass consumers, and the continued mobility of the fashion trendsetting elite beyond the clout of movie, recording and television celebrities.
The ability to identify signature designer details from precious metal on a handbag, lush fabric of a dress, or sole of a shoe without having to flaunt wearing and owning them has also become the trend. “Stealth wealth” comes with the premise that if one is “truly among the fashion elite you don’t need labels or logos to showcase your style and wealth. The new mantra is: ‘If you’ve got it – don’t flaunt it,’” Jackson (2006) reported on luxury fashion trends.
The Challenges of luxury fashion advertising in China
Hung Huang, CEO of China Interactive Media Group (CIMG) in describing luxury fashion in China emphasised that “Our message about luxury consumption is that fashion is not skin deep. To be intelligent as a luxury consumer the Chinese have to get over buying status. They have to buy for their personal enjoyment,” (qtd by Montgomery, 2006, p 370). Huang’s group publishes its flagship fashion magazine i-Look targeting affluent female consumers as supported by same titled television show. The magazine readers and the television show viewers were provided very detailed information about how to look at labels, discern good years in wine, bed and breakfast boutique hotels, local designers with small boutiques as well as creative ideas behind major label brands and their designers such as Marc Jacobs and Louis Vuitton.
The aim was to make people think critically about making expensive purchases by providing background to establish emotional bond and that pleasure must come first rather than to encourage other people to perceive them as “rich people” (Montgomery, 2006). In fact, CIMG presents alternatives as “A lot of foreign magazines have taken on the characteristics of their foreign parent,” (p 370) as characteristic-contents as well as advertisements appear on these magazines. One important factor to consider in the interview is when Huang claimed that while “Three years ago status was listed as the most important factor [on consumer purchasing]; now it is number five. Our readers are not concerned with price. It it’s great, if it’s something that they believe will address their needs, that’s what they want. […] 50 percent of the women we surveyed go out and buy luxury goods when they are not happy,” (p 370) further pointing out that the motivation has changed to self-satisfaction than to live up to the Joneses.
Another marketing and advertising concern on luxury fashion in China was that Huang claimed the lack of a single luxury manufacturer in China and the need to follow international trends so that when the west declares an empire waist trend, then, they say, “yes, this year is empire waist” (Montgomery, 2006, p 371).
In an interview with David Ng, Assistant Manager of LVMH Group China and Representative Director, he acknowledged that “China’s media is divided by geography and much decentralized. Existing are over 1,000 TV channels, nearly 2,000 kinds of newspapers, and how to effectively focus on the target consumer group, as well as promotional ads is a big challenge for the international luxury brand,” (PLEASE PLACE HERE YOUR SOURCE).
In addition, Crystal Chu, Senior marketing executive of InStyle China said that, “Despite the enormous budget spent on luxury brand advertising, they are not very effective. The strategy put almost the same as a luxury information interference caused. Luxury brand choice in the internationally renowned magazine [put influence] above the ads, and they have always found the information lost in the vast advertising. This can be attributed to China’s current advertising environment, advertisers’ density is already very crowded, advertising information interference serious, the majority of magazine readers will [not easily] note one of the new luxury brands,.” (place your reference here).
The most effective media tools available to the Western luxury fashion brands for the “post-1980s” consumer market in China
Advertising spending in the luxury brands put in a lot of dollars with the last three years growing very rapidly. The amount of ads before the 20 luxury brands spent a total of 1.23 billion yuan by 2006. This meant that 20 brand advertising in 2006 amounts to the annual growth rate of 32 percent while 2005 was even higher, at 56 % according to a Nielsen study.
International brands in China and Asian advertising places both on print media and television media. The high price of television has not hindered placement, but is considered a rapid establishment for best-known choices. Serious television commercials advertising interference and lack of accurate reach on target audience or crowd makes the strategy very expensive and costly (Please place your source here).
This has made television advertising decrease as Cartier who has spent is 756,000 and 90,000 yuan in 2004 has bypassed television in 2006. While the decision may have affected some sectors negatively, luxury fashion advertising in the television media advertising is not futile. A right-timed slot, the correct channels, and the correct program is still expected to achieve good results and value for money (Please place your source here).
Following is the expenditure on advertising of Top20 luxury (Unit: RMB 1000, TV + Print):
Already, the majority of luxury brands follow the same strategy: 70-90 per cent of TV magazine were declined, as compared to 10-30% of print magazines. Innovative strategies such as careful choice of certain quality of newspapers targeting fashion elite that actually read the morning newspaper as well as to do some creative forms of advertising are considered.
Market Research Analysis
According to the focus group interview of the “post-1980s” generation in China the following were established:
100% of the respondents / interviewed use the internet. The hours spent on internet weekly varies from 65-70 hours or 9 hours every day as many of them are professionals and have white collar jobs and sit in the office for whole the day. Likewise, it was found that 80% have bought fashion goods online. When it comes to update on fashion news, 100% said they read magazines, 90% get update from the internet and the rest of them from friends or by word-of-mouth influence.
When asked how do they find out about new season fashion products, magazine topped the list, friends information came second, internet was the third choice or source, direct mail the fourth, catalogue and window display tied as the fifth.
When it comes to finding out a fashion brand, 100% claimed from magazine, while they also learn from friends, the internet, and outdoor billboards. The magazine(s) read include Vogue, Cosmopolitan and ViVi (Japanese magazine).
Magazine
As source of credibility and influence, the fashion magazines still top the list among consumers specifically when it comes to international fashion brands and luxury fashion. Magazines are where people get more in-depth information from industry experts as expressed by Huang through Montgomery (2006). Informed choice was what Huang emphasised and it seems the high-end fashion consumers as may be represented by the respondents were properly connected at this point.
Internet
With the proliferation of communication and information technology to a larger audience that spells the newly emerging professionals of China, the internet is an inevitable source of fashion trends. However, it is to be noted that luxury fashion may not be accessible or affordable even by these professionals.
Word-of-mouth
With China as the rest of Asian countries and consumers, the Chinese are generally organisation or keen-oriented. Trends and acceptance at most may be influenced by their friends, co-workers, family or relatives and peers. The daily and continuing interaction between professionals and the respondents in particular makes word-of-mouth as an important form of advertising although considered unconventional.
Television
While television may easily be perceived as the medium for mass market target, luxury fashion has slowly started using it to reach its targeted market. This may be due to the fact that other targeted consumers may not use the internet nor buy magazines but most probably, watch television.
Media selection
In an interview with David Ng, Assistant Manager to LVMH Group China Representative Director revealed that “Now the top luxury brands put in the most important media for the high-end fashion magazines (such as: Elle, Vogue, Cosmopolitan, etc.), followed by outdoor advertising. Other forms of advertising relatively less use than, but now many brands and have felt the power of the network, network, as well as growing concern about new media publicity.” These meant that LV has started to place TV Ads in China starting this year and placed in ICS or the International Channel Shanghai of SMG, covering greater Shanghai area through local cable network and Dragon TV, SMG’s satellite TV channel covering the whole country. It was reported that the investment is around 10m RMB. It has been observed that it is the first international top fashion brand to place TV Ads in China.” (Pls place your source here).
Crystal Chu, Senior marketing executive of InStyle China also added that “Before 2007, most of the luxury brands put domestic media is still primarily based fashion magazine. In 2007, a growing number of luxury started to enter the field of television advertising to Lancome / Estee Lauder / Dior makeup brands such as first, in the fashion The choice of prime-time television channel high ratings for the program ads.” (Pls place your source here)
The key factors for effective luxury fashion advertising in the “post-1980s” consumer market in China
While the internet and television may be complementary media to use for advertising luxury fashion, it cannot be denied that those who have money would want to be informed, educated as well as making intelligent decisions even in what they wear. As Huang already noted (Montgomery, 2006), people no longer mind the price of what they wear, but are conscious to be wearing the right clothes nor would not want to be caught in them in consecutive times. Keeping abreast with what is actually acceptable as well as pleasurable may be further discerned when advertising is accompanied with actual endorsement from fashion editors, writers and insiders that are usually found in fashion magazines.
So it can be deduced that cost-effective advertising is what is most important so that most advertisers would risk television advertisements on certain intervals but maximum gains through direct connection with the target market is moist useful through fashion magazine advertising.
Message
“Does the advertising always have to be the same? No, and this is where people get confused. Driven by cultural imperatives, the expression of an identical consumer benefit will vary from place to place. Chinese project “status” differently than do Americans,” (Doctoroff, 2005, p ). This may be generally true among observers and that in consideration of the focus group interview as well as the interview on i-Look representative Huang, there is a need for focus and provision of pleasure and intelligent consumerism even in as trivial and passing as luxury fashion.
Reference
Associated press (AP). (2006). “PPR quarterly revenue rises 5.8 percent.” Businessweek.
Jackson, Kate. (2006). “The case of the missing logo; Forget labels. The fashion elite turn to ‘stealth wealth.’” The Boston Globe, 2006.
Just Style. (2006). “Luxury shoppers lured by innovation.”
Priest, Ann. (2005). “Uniformity and differentiation in fashion.” International journal of Clothing Science and technology 17 (3/4). Pp 253-263.
Silverstein, M. J. and Fiske, N. (2003). “Luxury for the masses.” Harvard Business Review.
Montgomery, Lucy (2006) “Beijing bling’: creative details and consumer choices in contemporary China”. International Journal of Cultural Studies 9(3). 369-376.