Global Luxury Industry Forum On Cooperation And Development Of China'S Capital And Global High-End Brands

The frequent movements of Chinese capital, the integration of street culture into luxury brands, the online shopping experience created by online interaction, and the development path of Chinese brands are the core topics of this forum.

In June 9th, the 2018 China EU Shanghai tenth Top Brand Forum was jointly hosted by CEIBS and Jingan District people's Government of Jingan.

The forum invited senior management of international luxury brands, local fashion companies, technology giants, management consulting companies and professors and lecturers of China International Business School to discuss hot topics in the luxury industry in recent years.

We were invited to participate in this forum all the time, and found that "China" became the most popular keyword in the discussion lasting for one day.

The following is the core question and answer session of this forum.

What do you think of the frequent purchase of international high-end brands by Chinese capital?

German luxury Association MEISTERKREIS founder and chairman Clemens Plfanz:

Investment in China is often debated or debated in Europe, especially in the media.

First of all, Europeans often mention a principle of mutual benefit and win-win and feel very open. Therefore, they will worry whether the same principle can be maintained on the side of China.

The other is innovation.

For example, in Germany, we do a lot of basic research, but we do not set specific targets, such as how many patents will be generated in five years.

I don't know if investors can accept it.

What's more, the media is worried that all the leading technology and intellectual property rights will be sold after the company is bought. They think the government should need some regulatory provisions.

But in the business world, the views are quite different.

I can tell you a research conducted by the German Chamber of Commerce. They surveyed about sixty companies that had dealings with Chinese companies, and found that almost every entrepreneur was happy.

This is quite different from the media coverage.

Of course, the reasons for their happiness vary greatly, but mainly because they compare Chinese investors with American investors, and find that most companies are interested in long-term business development.

In addition, we all know that we have very strong trade unions in Germany. There is a very close relationship between management and workers. Therefore, there is a question whether Chinese investors can abide by such a traditional way.

We find that Chinese investors are more respectful of Germany's ways of doing things.

So, I think there will be many opportunities for Chinese investors to buy German companies.

For example, long-term investment, especially for family businesses.

In addition, Chinese investors can help foreign companies to enter the Chinese market.

Most foreign companies actually don't know exactly how to enter the Chinese market.

I think China is now the most potential market for these brands, and their experience in the Chinese market is not very rich.

To enter the Chinese market, it is a very important asset. This asset is more important than money. Entering the Chinese market itself is a vital asset.

Besides, we know that Chinese investors are strong in capital, so they can help acquired company to establish a very sound financial foundation.

In addition, China made 2025 and Germany had 4 of the industries, which could have a very high degree of agreement.

We can bring together and learn from each other and grow together.

China's investment and your professional knowledge are welcome.

Of course, there are also uncertainties. For example, some financial structures are not pparent.

In addition, there is one-way knowledge pfer.

And whether investors can respect the mode of trade union operation.

Cao Weiming, President of Hermes Greater China

As we all know, Europe is the birthplace of luxury goods. At present, the most important luxury brands still come from Europe, including France, Italy, Germany and so on.

Clemens Pflanz mentioned that when European brands are faced with Chinese investors, they may have a fear mentality, because they think that Chinese people can bring anything other than money, will they come to ruin my brand? Will it be normal to run my brand in a relatively short-term way?

Gradually, Chinese people have many experiences and lessons when purchasing brands. They also have very good cases, such as the acquisition of Lanvin's Fosun Group in the past few years, which has been in this field for many years.

My question is from another angle.

I am worried about Chinese enterprises, how they will operate these brands after the acquisition, because everyone knows that these European brands are rooted in Europe, and are entirely grown in European culture.

Now that the Chinese market is the most viable and fastest growing, the mainland market is only 1/3 of the top sales.

This means that after you buy an international brand, 2/3 of the market needs to be run.

As you know, it takes a very long time to run a brand. I think ten years is not enough. Twenty years is not enough. Thirty years is not enough. It takes longer, fifty years, one hundred years. All European brands are over one hundred years, or even longer.

So, are we prepared enough to acquire a luxury brand?

There are stories behind luxury brands.

And the most classic thing in the fashion industry is how you can coexist with the soul of a brand creative director. This is the biggest challenge.

This may be more difficult than buying a high-tech company to run it again.

I was inspired by the previous conversation and threw a question.

I have no answer myself. We can discuss it together.

Michel Gutsatz, director of MBA department, KEDGE business school, France:

I think if the brand wants to grow, it needs investors.

And when you talk about investors, it means money.

Then you are looking for funds. The new investors we see now are Chinese investors, just like the investors in the US and Europe before.

A few years ago, the image of China's overseas investment was negative. Some people thought that Chinese people would invest in the acquiring company to get their knowhow, bring them back to China and turn them off.

Therefore, we need to strengthen dialogue and strengthen trust and build trust.

Trust between investors and brands is very important.

We often say that a brand knows where it will go, but it must also trust people who bring money to it, which is often the hardest.

Xia Guoxin, chairman and general manager of Shenzhen's Limited by Share Ltd, EMBA, alumni of China EU:

Since 2005, we have made five acquisitions, four international brands, plus an electricity supplier.

Before we went public, we made a brand in twenty years, that is, the brand of Song Li Si.

At that time, we must concentrate on catching a rabbit and concentrate on digging a good well.

However, if the platform of capital can not be used after listing, the significance of listing will disappear.

We are not buying brands that have already done very well in the Chinese market. They may have a history abroad, and more importantly, their products have their own important styles.

After takeover, the first thing we should do is to foster strengths and circumvent weaknesses.

Growth is the promotion of its own genes, its culture, the things behind it, especially the deep-rooted and long established styles of various countries.

These are the things we should inherit and carry forward, and we must do better.

After the completion of the acquisition, including the acquisition of the French brand, we did not send a person to the past.

Although we are Global Holdings, everything in the brand has not changed.

The only thing we need to do is to put these brands in China.

Do it well.

This means avoiding weaknesses.

We have to make two designs for Chinese customers under the premise of keeping the style. The two design includes the version.

Color and structure, and seasons.

German luxury Association MEISTERKREIS founder and chairman Clemens Plfanz

Is it good for luxury brands to lay down their shoulders and embrace street culture?

Bain Bruno Lannes, partner of Greater China

You have to ask the millennials what they think of luxury. They think of these words: fashion, leisure, design and so on.

This is not quite the same word as most people think.

Luxury goods are also aware of this, so they can see that their products now have more street clothes and casual clothes, because this is what the millennials want to buy.

Chinese consumers used to be ten years younger than Western consumers to buy luxury goods. Today, they say they are twenty years younger and twenty years younger than Western luxury consumers. Because these millennials are young, they begin to embrace the luxury goods industry again, and spend money as if they will not have any more tomorrow, and also promote the development of the industry.

Luca Solca, Global Luxury Management Director and head of Paris banking securities department:

Some brands, such as LV and Gucci, want to learn some elements from street corner cards.

This is related not only to products, but also to interaction with consumers.

Why? I think this change is mainly driven by two paths. The first is our intergenerational pformation.

For Chinese consumers, when the Chinese market began to develop, people wanted to buy these classic brands like LV and Gucci, because they did not own these things before.

Later on to the second generation of consumers, they not only satisfied traditional things, they did not want to follow their parents away. Their parents had bought many such classic brands.

Another reason for the change is digitalization and digitalization, enabling people to form communities, and people can form communities together with the same interests.

After the formation of such a community, new symbols and new symbols emerged.

In this way, some new brands come into being and interact with the community very well.

This is why the most important thing is to interpret the current trend correctly for the mature luxury brand that emphasizes technology and inheritance.

Several categories, including shoes, especially sports shoes, sunglasses, suits and leather goods, are received by this trend marketing.

Many new high-end brands have sprung up in these areas.

Traditional brands have also made innovations in these areas.

The main problem facing the industry is how it can become cooler, especially when combined with new consumption trends.

But some brands like Gucci or LV have their problems upside down. They are not going to be cooler. They need to understand how to maintain a cool brand image in such a long time and not to be out of touch with the market.

As a leading brand, what we need to do is not gradual style change, but very bold style innovation.

Now that many brands will change their designers, it is necessary to do so.

But changing designers is not enough. We must be bold and innovative.

Besides, you can't keep saying that my design director is the best. You have to trust their intuition and so on.

Now, don't just trust your instincts, use data, including Internet and social media.

Data can help you observe the trend, so we must combine science and art together, so that we can well grasp the preferences of customers and the preferences of customers. This is also very important.

But what I feel most worried about is that there is a risk in it. Maybe something is so successful that it can be seen everywhere at once.

I don't think anyone who buys luxury goods wants to buy something like everyone else and wants to be different.

Therefore, if a luxury is too successful to be everywhere, it is a risk.

Is it necessary to catch up with the digital trend for luxury brands and high-end brands that emphasize tradition and inheritance?

Cao Weiming, President of Hermes Greater China

Like all brands, we are most concerned about the new generation of Chinese consumers, who they are, how they will change, how they understand the brand, whether they will be loyal to the brand or not, and whether they like luxury goods. How do they understand how they work? Do they give up the traditional retail business?

The new generation of consumers may be our tomorrow, our hope.

I think what we can do is to think and adjust how to communicate with them, how to create some special ways to catch these people, speak their language, and attract them to understand us better.

So we may use more digital strategies in the future.

I think this is a tidal current. I have to cater for them and attract them to our side.

Bain Bruno Lannes, partner of Greater China

We say that luxury is about tradition and inheritance, but you see that Chinese marketing teams use many technical means. They often start out. They often use these technologies to get customers' data and understand trends.

They did not do so at their American headquarters or European headquarters.

These are the Chinese team's own invention and innovation.

That's why the parent company will come here to see what the Chinese team is doing, and also emphasize the creativity and flexibility of the brand.

Digitalization is not just in the field of luxury goods, but it is also having an impact on other fields.

I think the brand must develop this ability, or go out to buy this ability.

CEO, a listed FMCG company, once said that the next CEO will come from outside because he feels that all these FMCG companies will have great changes in ten or twenty years.

Now these CEO tend to be marketing people. Maybe the CEO of fast food companies should come from people like Google or apple, rather than people who have been marketing for 25 years in fast food company.

He said this is actually about some abilities. If you don't have one, you need to look outside.

Weng Michelle Wai, general manager of Tencent network media business group,

Tell me about one of the most busiest things lately.

In May and June, we received continuous applications from top brands of global brands.

They are actively seeking to understand the impact of digitalization on China's environment, the impact on our Chinese consumers, and the inspiration they can bring to the marketing level.

What is more surprising is that CMO and CEO are always visiting, because they are more concerned about market changes, pay attention to communication with users, and pay attention to the growth of business.

But now, we can see that even CFO wants to study together.

This gives us some deeper insight into the fact that we are looking for breakthroughs in the market.

From the perspective of the whole industry, I want to talk about three points, the first is communication.

This is the starting point for letting consumers know when they have a brand.

Second, experience.

That is, how to give you the most intuitive brand experience of consumers, this is the middle process.

In the end, what we are most concerned about is pformation, that is, how to improve performance.

In the part of communication, we see several changes, especially the top brands.

In the past, their communication is very official. We also believe that brand culture can communicate through the most official channels. Consumers will be most willing to accept, and most willing to believe that this is the brand value.

But we gradually see that the lifestyle of consumers has changed, media channels have changed, marketing digitalization, and even social communication has gradually become a mainstream.

Social networking has narrowed the distance between brands and consumers.

But it is undeniable that this will also reduce the value of the original brand.

Including fans these years, the economy is also good.

We see that the major brands are using local celebrities as endorsements.

Even some brands originally did not want to be localized. Now they are combining with local content and IP content, making direct publicity on the topic, so that the consumption scene has also changed, and there are more and more flash shops and flash buying ways.

Brand should use more soft services to create and extend brand value, and use more local culture to enrich the original brand value.

Luca Solca, Global Luxury Management Director and head of Paris banking securities department:

What kind of impact will the development of digital industry have on our industry? What are the implications for the competition pattern of the luxury industry? I think there are three levels.

The first is that it can bring more opportunities to the luxury industry, sell products to those more marginal people, and achieve higher frequency sales, because customers can place orders on the phone.

Of course, you can also know who is buying this product, and you can better deploy CRM and some measures.

But the development of digitalization has also increased competition, bringing some new entrants into this industry.

If you need to set up a very expensive flagship store at a very expensive retail point, the threshold is very high.

But now the advent of the digital age has lowered the entry threshold so that new brands can also come in.

Young consumers are also particularly willing to buy those new products and new brands.

Now several new brands have been very successful.

In addition, the digital age has also made the brand more widely influenced by distributors.

The Internet will magnify the problems faced by brands.

For example, some products appeared unevenly priced in the market, sometimes discounted at the end of the season, and some gray market behavior to run.

This situation must be eliminated, because it will increase brand risk and undermine brand business success.

So, if you want to sell your products online, your wholesalers are often your biggest competitors.

At this time, the brand must have an orderly management.

Some brands take a long time to restructure the wholesale distribution channel to regain control.

Bain partners Bruno Lannes

Does almost all luxury brands and high-end brands emphasize "experience" only with offline stores?

Chen Jianhao, chief executive officer of temple library,

Temple library is a retail companies, our whole retail is very important is not whether it is online or offline, the most important thing is what our customers need.

When our customers are offline, we should run to the line. When our customers need online convenience, we should provide online convenience. This is my own view.

In the high-end brand area, service is very important.

Temple library began in 2008 from the opening of the experience center, the first one in Beijing, and then opened shop in Nanjing Road, Shanghai.

For us, we have proved one thing in 2008: high-end consumption can not be online.

We go down the line, we have to provide our services well, so that our original customers are more sticky to us.

Today's Chinese consumers are not the same as before. The definition of luxuries is totally different from the three words.

We should not just bundle it in bags, watches, leather articles and even clothing. For us, luxury goods are cross category and life span.

Bain Bruno Lannes, partner of Greater China

I think for luxury brands, the key point is to manage consumers' experience well, because consumers can't get a complete experience if they go to middleman shopping.

In addition, they have no way to feel the integrity of the product.

If this is the most critical point, how can we still have a great experience with digital technology now?

Obviously, the brand can only cooperate with those platforms that can be completely controlled.

So this is why I believe the importance of brand website.

Because only these official websites are the brand's own control and the complete control of end-to-end.

Having said that, I would like to say that it is still early. After all, the flow of the brand official website is still relatively low.

I believe that online sales are only an extension of the offline market, providing greater convenience for consumers. For example, if there are no shops in the city, they can be obtained through websites.

Digital marketing for many brands, including marketing on social media, is also attracting people to the physical store, so that people have this desire, hoping to buy these products.

The brand can send lots of pictures, comments and videos on the line. The final goal is not necessarily to sell online, but rather to go to the store because there are totally different experiences in the store.

Wu Minzhi, senior vice president and chief customer officer of Alibaba group

Ali was the biggest beneficiary of the traffic dividend before, but it was precisely because it was the biggest beneficiary, so it was the first to perceive that the dividend was fast and needed further competitiveness.

At that time, we knew it was experience, so we took the lead in upgrading our customer team to the customer experience team, and then we appointed CCO (chief customer officer).

We are on the service today, on the customer experience, and on the promotion of the whole company's business decisions, all of which are based on data.

We are the best team that Ali group has done in the field of intelligence, and intelligent Xiaomi service all 90% of the information.

Today, the frontline staff found that there was something wrong with the product. He had the power to pull the bell and tell you that the product must be put off the shelves.

When we feel that businesses are having problems with customer service or business, we can close stores or straighten them out.

When we see that the whole business is doing very well in the customer experience of the consumer experience, we can also give him some sweetness.

What we share with CEO is what he thinks is the important symbol of new retail, which is to identify consumers' identifiable, touchable, observable and serviceable.

Box horse fresh is a successful example of new retail.

The first day on the box is new retail, taking consumer experience as the core.

The entire box horse's commodity operation system is also good, the logistics operation system, including the customer relationship operation system is also good, all is revolves to the consumer to bring the better experience.

Xu Bin, Professor of economics and finance, CEIBS

I want to add stability and stability to this extreme experience.

In the West or the mature economy, it is stressed that it is not necessary to act according to circumstances, but to emphasize rules.

What is stability experience? You must have been to Japan. You go to Japan. You go to and go to Ming this year. You always get this experience. Do you want to be surprised? No.

But you are very happy.

If you go to a foreign country, especially a developing country, you may worry about its hygiene. You will go to a McDonald's and KFC. Why? You get the same thing that you eat at home. This is stability.

Second, if we do things like, say, we accommodate customers, customers want this, other enterprises can not do it, I do it well, that's good.

But this is called "Shuang Shuang".

If I go to Japan, there will be no bargaining, no discount, no discrimination, no big data is used to divide people into three or six equal grades. If I go to a place, a waiter will make a mess of me today. As a result, second days after changing a salesperson, I feel bad. Is it a good time or a good time?

Third, value.

I came here to provide a different perspective in these twenty minutes, which is value.

Since we are talking about personalization and customization, there is a word "Price Differentiation" in economics. The reason why I use English without Chinese is that Chinese plation is called price discrimination.

The so-called big data is to distinguish people clearly, distinguish clearly later to discriminate.

English is a distinction, not a derogatory sense, but the essence is the same.

Your demand is high, so I set the price low and your demand elasticity is low. I will set the price high. That is personalization. Why does this personality fall into the trap of price discrimination? This is also a question to consider.

The forum is on the spot, left is the associate professor of marketing at China Europe International Business School, Wang Jing, founder and chief designer Zhu Yirong of Shanghai Liz International Trade Co., Ltd., Zhu Yirong, CEO of Limited by Share Ltd (Group), Liu Yuliang, founder Cai Chongda.

Cao Weiming, President of Hermes Greater China

Many people are asking when China has its own brand. In fact, China has many brands today, not only in the clothing industry, but also in the luxury industry.

We need to have a concept. We need to be very clear. The growth of luxury brands takes time.

Most luxury brands, except for some extravagant ones, such as some American brands, may be built for a long time.

Today's China should not eat fat at the same time. First of all, we can familiarize ourselves with luxury goods, buy luxury goods, and have a certain understanding of luxury goods. It is already very good.

I think China will have luxuries, but it will take time.

In fact, when you think about the history of China, luxury goods in China were very early, even earlier than in the West.

Let's look at some things in Chinese museums and see what Chinese people possessed in the Tang and Song dynasties.

In fact, Western luxury is also a matter of the past one hundred or two hundred years, so China will slowly catch up with it, because Chinese culture still has a deep pursuit for delicate articles, handicrafts and fine works.

I am convinced of this.

Roland Begg, global senior partner and vice president of Greater China, Chen Ke:

As a self created brand, we must have product confidence.

I used to serve more than one hundred projects, and found that many of our local brands actually have no confidence in their products.

They sometimes do some imitation.

But once I analyzed the sales data for a client, and found that a completely imitated product and a completely self created product actually sold entirely on its own product, but it was very good. It did not need to discount and other means to create a very good sales contribution and gross profit contribution.

On the contrary, the price of the imitation is low, which may be only the original version 1/3, and the sales are not good enough.

But we still focus more on this.

What is the reason? Lack of self-confidence.

We need self-confidence, and of course, I know that the process of self confidence takes time to accumulate.

In the second dimension, the upgrading of the product needs the process and energy. It is really hard.

Liu Yuliang, President of Limited by Share Ltd group and EMBA alumni of China and Europe:

For a local brand, in the local business environment, in the original circumstances, it would be almost impossible for a domestic brand to enter the business district of Jingan. It is not that we are not doing well, it is simply not allowing you to enter. This is the case, not allowing domestic brands to enter.

Now, when we do this, we can see that domestic brands have the opportunity to enter the best business district, so that we can feel that we can also do the best quality, the best experience and the best service.

On the other hand, our consumers' demand for high-end products is growing faster than ours. After pulling our brand up, we have better performance growth.

The key to my personal experience of making a brand is to think about what the gene of this brand is, you need to know what the soul of the brand is first.

Besides, let's make a brand and suggest not to talk about the way of Europe, or to excavate China's history, culture, resources and possible advantages in the future.

Because the brands we imitate may soon come to a stage, but they are hard to last. You can never do better than them.

Cai Chongda, founder of megamode:

China now has good designers.

There are three designers in Paris fashion week.

In my opinion, Paris fashion week is the highest standard of fashion week.

China is an aesthetical power and powerful country, but it has economic fluctuations before.

Now that this era has arrived, I went to dinner with the chairman of fashion week in Paris last week, and he very much hoped that Chinese culture could bring some new breakthroughs to the world.

I often say that this is not a wave. It's a tsunami. It's exciting, exciting, and exciting.

But precisely because of the new things, facing many difficulties, for example, our fabric, 70% of all international imports, not not patriotic, China is a big textile country, but not a powerful country.

For example, processing technology, we used to have three designer clothes at the same time to a better factory, the three designer clothes made exactly the same.

For example, operators, I say more presumptuous, you go to Japan and Europe, who sells that brand is like that brand.

But in China, we find that the salesperson who runs the brand is often not like that brand.

Running a brand requires understanding its content and matching content with people.

I need to do a little bit of work. I have suffered a lot and I have gone through many twists and turns, but I still feel very excited.

Bain Bruno Lannes, partner of Greater China

Future luxury goods are here, in Shanghai and in China.

Because many of the global fashion trends we talk about come from here.

There are already very mature customers, who have contributed 30% of the sales in the global industry, which is the foundation for the world trend.

There's also digital marketing. Everything starts here, just like what I call the global brand marketing department. They come to China to see how to do it.

Publicity can be introduced to its home country.

There is also sales experience, and we can see many very unique flagship stores in China, in Shanghai.

Not only Starbucks, but Amazon also want to open a unique flagship store in China, giving consumers a very unique experience.

So, in the future, luxury goods.

Great changes will take place here.