CHANNELS
China’s consumer market has become the focal point of interest for international marketers. With a population of over 1.3 billion and the emergence of a growing middle class, most successful international companies have attempted to establish a base here, with many seeing their success in China as an indication of future sustainability. But winning the minds and the wallets of Chinese consumers isn’t easy, because China is not a typical emerging consumer market.
OUR ENTRY PLANS
Our initial sales channels will be through a department store concession, alongside our first brand store in Shanghai.
Our department store concession will be through the Hong Kong luxury department store, Lane Crawford. Lane Crawford is a subsidiary of the Pedder Group, who manages the Manolo Blahnik stores in Hong Kong. Currently, they have four department stores in mainland China: two in Beijing, one in Shanghai, and one in Chengdu. Entering the Chinese market through Lane Crawford will increase our brand awareness with our “Aspirational” consumer. Moreover, Lane Crawford already works with some of our competitors, such as Prada and Christian Louboutin.
We will also open our own brand store in the trendy West Nanjing Road, targeting our “Elite” consumer. This street is the center point of foreign luxury brands in Shanghai. Our ideal location will be the Plaza 66 luxury shopping mall, or the Jing'An Kerry Center along that street. This location is essential for any luxury brand entering Shanghai, while exposing our first store next to our competitors will make our brand more recognizable in the luxury shoe market. China has recently overtaken Japan to become the world’s second-biggest consumer economy, with the nations $3.3 trillion private consumption representing roughly 8% of the world total. We feel our chosen locations represent the most effective channels to access these consumers in Shanghai.
OUR FUTURE PLANS
Our market entry will represent a scaled strategy based on previous success. There are more than 1 million Chinese with assets over $1.5 million. This number is growing substantially with 50% representing 20-60 year olds in the Tier 1 cities of Beijing, Guangdong, Shenzen and Shanghai. For these reasons we have decided to execute our initial market entry strategy in Shanghai followed by a scaled expansion into Tier 1, and Tier 2 cities over the next six years.
Following our initial launch we plan to have:
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Two brand stores in Shanghai, and one in Beijing by the end of our second year;
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Entry into a Tier 2 city, preferably Chengdu or Chongqing in Sichuan province, by the end of our third year;
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Expand the number of brand stores in Shanghai and Beijing, and enter other Tier 2 cities, preferably Tianjin, Nanjing, Hangzhou, or Wuhan by the end of the fifth year.
The Tier 1 cities of Shenzen, and Guangzhou have not been considered in our near future plans because Manolo Blahnik has three brand stores in Hong Kong, and Lane Crawford has five department stores in the city. Currently, Lane Crawford delivers products from Hong Kong to the Guangdong province.
http://www.lanecrawford.com.cn/?_country=CN
http://www.chinabusinessreview.com/understanding-chinese-consumers/
http://osio-china.com/2012/11/16/chinas-city-tier-system/
