IT Consultis’ Post

🐾 Imitation brands are THRIVING in China – how can luxury remain iconic? 2024 has seen a notable shift in consumer behaviors driven by economic uncertainty and consumption downgrade trends, especially in the China market. 💵 As consumers become more RATIONAL and VALUE-CENTRIC in spending, they are increasingly drawn to cost-effective alternatives, ranging from mid- and lower-end brands to white-label products without brand logos and “imitation brands”. While white-label brands offer budget-friendly products by skipping traditional branding and using channels like live streaming and e-commerce to sell directly to consumers, their appeal tends to be short-lived, as flashy promotions and market positioning fail to sustain consumer interest over time. 💥 Meanwhile, "IMITATION brands" are quietly gaining ground as a standout phenomenon. Unlike traditional counterfeit products, these brands emulate the aesthetics and product offerings of luxury names while operating as LEGITIMATE businesses. With branding, visual systems, and even offline presence, they offer style and quality at a fraction of the price to pragmatic, middle-class consumers. 🛍️ Interestingly, this trend is also closely linked to growing consumer CONFIDENCE in DOMESTIC products. The recent Kearney’s China Consumer Research reveals that 52% of consumers intend to increase spending on domestic brands going forward, compared to just 27% for global brands. Amid economic uncertainty, “LUXURY SHAME” has emerged, where consumers shy away from high-end purchases to avoid appearing insensitive to broader socioeconomic conditions. The result? A growing acceptance of “imitation brands” as savvy choices rather than compromises, signaling a major cultural shift.  🧩 So, what does this mean for luxury brands navigating the Chinese market? As I mentioned in my recent posts: Brands need to PROACTIVELY maintain their edge - bring luxury back to its true essence by elevating quality, creativity, storytelling, and services/experiences - in an authentic, relevant, and seamless way, ensuring they stay iconic, irreplaceable, and deeply resonant with the evolving demands of smart consumers. Luxury brands must be agile, carefully assessing their own trade-offs and refining their value positioning in this competitive market. What do you think of the rise of imitation brands? Share your take below. Thanks to Eva Liang at Vogue Business, as well as Kearney for the interesting insights. #Copycat #Authenticity #Luxury #ConsumerBehavior #China

With the rise of imitation brands, luxury brands must evolve to differentiate themselves and be irreplaceable. Here are some strategies: 1. Elevate Brand Value: Focus on craftsmanship, quality, and authenticity that can’t be replicated. 2. Create Emotional Connections: Use storytelling to build an emotional bond with consumers, making them loyal to the brand. 3. Leverage Local Culture: Integrate local influences and resonate with cultural sentiments for a more personal appeal. 4. Invest in Experience: Move beyond products and focus on creating unique, memorable experiences for customers. 5. Be Transparent: Show a commitment to ethical practices and sustainability to build trust in today’s conscious consumer market.

Several international luxury brands have recently exited China, including YOOX NET-A-PORTER, MACHINE-A, and Zadig&Voltaire, while brands like Stella McCartney and FURLA have scaled back their presence. The beauty industry is facing similar struggles, with brands such as Benefit Cosmetics and philosophy also withdrawing from the market. According to Vogue Business in China, the reasons behind these exits include: 1️⃣ The end of distribution agreements, with poor performance in the market; 2️⃣ Strategic shifts towards a more premium brand positioning; 3️⃣ Failure to update China strategies in time to meet evolving domestic trends; 4️⃣ Lack of localisation, including product design, marketing, retail channels, and store locations. Chinese consumers are becoming increasingly discerning in their luxury spending. They prefer brands with values and designs they resonate with, rather than being swayed by a luxury name alone. 💡 Entering the Chinese market without a clear, data-backed strategy can quickly strain budgets and lead to underperformance. Brands must profile their target audiences and connect with them on a deeper level. Understanding the intricacies of China’s social media and e-commerce platforms, along with regional cultural nuances, is key to long-term success. How can you demystify the China market and ensure your investments yield strong brand and commercial success? Reach out to our experts at nihao@hotpotchina.com to start planning your China journey today. Image via Tmall #ChinaMarket #ChineseConsumers #ConsumerInsights #ChinaMarketing #BrandStrategy #LuxuryBrands #LuxuryBranding #LuxuryMarketing

This insightful post by Jacques Roizen points to the rapidly changing competitive landscape in China. His comments regarding the rapid evolution of industries as diverse as electric vehicles and luxury beauty point to how difficult it has become to predict market dynamics across a range of verticals and the importance of planning for a variety of scenarios. The author notes: "Those waiting for obvious signals will be too late - the transformation of their competitive landscape will be as dramatic as what we've seen in the automotive sector."

The rise of Chinese luxury beauty brands mirrors the EV revolution—innovating locally before expanding globally. With Chinese Gen Z prioritizing storytelling and sustainability, global brands must act now. Leveraging tools like Tmall & JD.com isn’t optional anymore—it’s essential! 🚀 Let’s discuss: how can global players close the gap and stay competitive in this rapidly evolving market? 🌍💡

🌟 #China's Luxury Market: A Changing Landscape with Boundless Opportunities🌟 The face of China’s #luxurymarket is constantly evolving. With a surge in domestic spending, a growing appetite among the younger generation, and a shift towards sustainable and ethical goods, the landscape presents incredible opportunities for European brands. Here’s what you need to know: - Immense Market Potential: China is responsible for nearly 35% of global luxury goods consumption. By 2030, this figure could reach 40%. The boom is driven by increased disposable income and a growing middle class. - Younger Consumers Leading the Way: Gen Z and Millennials, who represent 60% of the population under 30, are digitally savvy and have a strong preference for sustainable, high-quality products. In 2022 alone, they accounted for €210bn in personal luxury market spending, with projections to double by 2026. - Digital Marketing is Key: To succeed, brands must invest in a robust digital marketing strategy. E-commerce platforms like Tmall, JD.COM, and Xiaohongshu are pivotal in reaching this tech-savvy audience. For European brands, understanding these trends and tailoring a personalized strategy is essential to tapping into China's luxury market. 🚀 #LuxuryMarket #China #GenZ #DigitalMarketing #Sustainability #EuropeanBrands #BusinessGrowth

A very powerful piece of advice in this article: international brands aiming to enter the Chinese market need to “respect and understand Chinese culture” BEFORE finding points of convergence with their own values. #brandsuccess #china #consumer #culture #luxury https://lnkd.in/gnPCCAaT

While many in the luxury sector have cooled their focus on China, Beauty brands are flourishing in the market, and why? Excellent physical retail experiences. Top beauty brands, and many rising ones, are establishing new flagship stores, often in second cities, but with a focus on delivering enhanced brand experiences for shoppers. There is a lesson to take here - physical retail is key, but it must be done right. Giving brands the space and freedom to deliver will create shopper engagement, but brands must also make the most of the opportunity to be truly innovative and disruptive. It is as true in China's domestic sector as in any other market. More here: https://lnkd.in/gWYTHvDq #RetailExperience #Beauty #China #PhysicalRetail

“Support is also growing for domestic brands in Asia, particularly in China and Southeast Asia.” That’s the most important sentence in the article, it’s also an understatement. Every year for the past five years, the top sales holiday performers in China have reshuffled, with Chinese brands regularly moving to the top. The pandemic is long over, but I still hear the same comments on China from international executives: - “Keeping the powder dry” - “Cautiously optimistic” Executives who read articles like this and believe it supports a middle-of-the-road strategy are missing the big picture. Here are three trends that will define the market for the next 10 years: 1. China entrepreneurs will launch amazing homegrown brands to satisfy demand where international brands underinvest. 2. China funds will buy international brands that belong in China. 3. Established Chinese brands will launch in your backyard. Every day your brand is not loud in China, you are giving ground to your replacement. Your replacement will be a great Chinese brand selling products of comparable or better quality at a better price point, a brand that took advantage of your absence. I don’t advocate for irrational investment. I advocate making sure an intelligent budget delivers a punch. Be loud and proud about your activity in China. Louis Vuitton just had a great event on the Bund the same weekend as the Chinese Grand Prix, while a number of other luxury brands canceled their China 2024 events. LV was right; the other brands were wrong. Think long-term, be focused, be fun, and make sure you have fun yourself! Follow me to stay on top of trends and brands emerging from China. #KulturShift #SocialCommerce #ChineseBrands #China

The first aspect Mr. Kaminski brought up was that many brands underestimate the speed in which China operates, versus the speed clients are used to when it comes to reacting to their demands. Most Western brands are simply too slow in providing client-centric solutions. “Many Western brands need weeks to make decisions, sometimes months,” he shared, adding that “By the time they decided on an issue related to China, clients have already moved on, so, essentially, their issue is about speed and processes, in other words, habits.” “Most Western brands still operate in a 'Marketing 1.0' reality, placing the focus on products, while they compete with Chinese brands who are already in a 'Marketing 3.0,' or digital-first, rapid fail-and-learn client-centricity reality,” said Mr. Kaminski. “You can’t compete in a fast-paced client-centric reality when you are too slow in decision-making and focused on products.” #business #marketing #retail