Luxury Giants Enter The Chinese Market With More Idle Capital.

Compared with the first tier cities in Beijing and Shanghai, the cost of living in the second tier cities is much lower. Although expensive for the Midwest hinterland, but according to the reporter, Chengdu's most prime location, the best property prices are only ten thousand yuan per square meter, the price is not comparable to the development of Shanghai suburbs. Besides, the price cost of restaurants and entertainment in second tier cities is also lower than that in the first tier cities, while those in the oil, electricity and telecommunications industries are the first tier cities, and they constitute the main force of the two or three line luxury consumption.

According to a survey by McKinsey, by 2015, 75% of the Chinese rich will live in two or three line cities and some non coastal cities. In the next 5 years, the number of people willing to consume luxury goods will increase from 40 million to 160 million, mainly in two or three line cities.

In addition, the consumption characteristics of the two or three tier cities are also gradually differentiated. The consumption of luxury goods in the northeast and southeast is becoming more rational, and the demand for personalized and customized products is becoming increasingly prominent.

Take the wrist watch as an example, on the whole, Chinese consumers do not have a high level of understanding of high-end watches. However, this also means that China's high-end watch market has considerable potential. At the present stage, the high-end watches in the Chinese market have shown the trend of first tier cities to spread to the two or three tier cities. What needs to be explained is that the high net worth people in the first tier cities prefer to buy abroad. Therefore, the main consumers in the first tier cities are not local consumers, but consumers from the two or three tier cities.

In view of this demand, the wristwatch brand is also placed in the Midwest after the extensive layout of the wristwatch. According to a China wrist watch report released by the Institute of wealth research in June 18, 2013, the development of China's high-end watch market, especially the watch and gift market, was frustrated. From the end of 2012 to the middle of 2013, the sales of high-end watches had dropped by two digits. To this end, watch manufacturers will focus on the two or three line cities. Luxury experts believe that under the rapid urbanization process, a large amount of wealth has accumulated rapidly outside the big cities, giving birth to the powerful purchasing power of the two or three line cities, and the market share of high-end watches in such cities is expected to expand.

It is understood that the European brands such as Vacheron Constantin, Audemars Pigeut, Pena and other watch brands also aim at the two or three cities in the Midwest, while Longines has already begun to deploy the four or five tier cities in China.

Of course, when these luxury brands continue to cover China's two or three or even four or five line cities, their management is also facing more severe challenges.

I must mention that the traditional commercial centers including high-end shopping malls have been hit by the electricity supplier in recent two years. Buying on behalf of The popularity of Shanghai, Beijing and some other high-end shopping malls is not ideal. It also makes people sweat for those developers who are entering the two or three tier cities to build high-end shopping malls.

But in Hou Xun's view, the sense of experience brought by traditional shopping malls is not what the electricity supplier can do. "Nowadays, the commercial real estate in the mainland can be described as a hundred flowers bloom." Hou Xun told reporters that shopping malls are not only shopping places, but also a good place for friends and family gatherings. Therefore, how to make the mall become a landmark for urban residents to meet and relax is a magic weapon for traditional shopping centers to win.

"Eating, singing, sports and so on can not be realized in the electronic commerce platform. A traditional shopping center can attract customers by distinctive restaurants and convenient entertainment facilities. Shopping is often done after these activities. It's like buying a dress when a family gets together to go shopping. In the future, a popular shopping mall must first be comprehensive, providing customers with food and beauty. Leisure time Shopping and other integrated services. This is why IFS started the pilot project from the second tier cities, because compared with the first tier cities, China's second tier cities are even more lacking in high-end, comfortable and comprehensive shopping centers with style and taste. Hou Xun said.

Jonas Hoffmann also told reporters that "experience" is becoming more and more important. This is precisely why luxury brands begin to refurbish in flagship stores in China to convey the full meaning of brands. The Asia Pacific and China markets have great potential, so most companies are making every effort to use more resources to develop the market. Soon, other markets will have the same level of service experience. In the past 10 years, brand Logo is the core of luxury brand - customers are looking for a symbol of differentiation. Now that customers are becoming more rational, luxury brands will show more of their other characteristics, such as the unique heritage: manual manufacturing and the unique trajectory of brand development.

For the increasingly popular Online retailers Jonas Hoffmann said that in most French and Italy luxury brands, a basic principle is to control all sales channels. The same is true for online sales. They will not use the third party platform to sell online. If you look at the United States, some companies are already starting to sell their products online, sooner or later, this will happen in China. However, for luxury goods, online sales is not always a good way, because traditional stores bring a kind of perceptual experience. Besides seeing, you can also touch and smell. This is also a matter of fact that physical stores display all the connotations of brands, which is more important than just showing all products. Therefore, the future of the traditional high-end shopping mall is still promising if we respect "experience first" and provide distinctive innovative services.