Nicholas Steinkamp’s Post

As we all know, Japan's exchange rate has reached its lowest level since 1986, and Chinese tourists have been buying luxury goods in Japan for several months. Louis Vuitton is even jokingly called "souvenir product from Japan" by the Chinese tourists. Although Japan is also considered an Asian market, in our traditional concept, wherever people consume these brands, the money will go into the pockets of these brand companies. But the reality is that due to the low exchange rate, even if the brand continues to raise prices in the Japanese market, the net profit or profit level is far lower than that in the Chinese market, which directly drags down the company's revenue. Therefore, brands hope to keep consumers in China. On this point, Hermès has done very well in this regard. The latest financial report shows that the brand's market share in China is almost unaffected by the diversion of outbound customers. So, who is the biggest victim of this incident? It is the Shanghai market! First of all, Shanghai is relatively close to Japan, and it is very easy for customers in the Shanghai market to go abroad. When the domestic luxury goods market has begun to decline, the situation where consumers choose to go to Japan for shopping due to price advantages is directly worse! Secondly, the representative of China's high-end luxury shopping malls, Shanghai Hang Lung Plaza, saw its tenant sales plummet by 23% in the first half of the year, shocking the entire retail industry and further proving that the Shanghai market is the biggest victim of this phenomenon. Thus, the luxury brands have to accept the truth that majority of Chinese luxury consumers have always been a consumer group that is unquestionably sensitive to price.

The Chinese luxury market is shifting, with consumers increasingly buying high-end luxury goods abroad again. While domestic sales might dip for some brands, this reflects evolving purchasing behaviors, not necessarily a weakening demand. Angelito Perez Tan, Jr., CEO and Co-founder of RTG Group Asia, notes that while brands might use pricing strategies to appeal to value-conscious Chinese consumers to spur demand, they must be cautious as such approaches could harm their brand image in the long run. Balancing value and exclusivity will be key for brands moving forward. What strategies might work best? https://lnkd.in/gzmYTapm

China's luxury market, driven by domestic spending, younger consumers, and sustainability, presents European brands with growth opportunities demanding tailored strategies and digital engagement. Here's how brands can capitalize: https://bit.ly/4bAi1go #ad #apacmarketing #luxurymarketing

Should brands reconsider their approach as China’s $57 billion grey and second-hand luxury markets expand? As this Yahoo! Finance article mentions, platforms like DeWu offer significant discounts, appealing to price-sensitive consumers and transforming the market. Instead of distancing themselves from this trend, luxury brands could engage with the second-hand market by providing authentication services to protect brand integrity and maximize value. Adapting to this shift can build consumer trust and fuel long-term growth.

I am excited to share my latest contribution to Business Insider. Having followed the Japanese luxury and retail market closely for many years, I explore a fascinating shift in Japan’s luxury market and its implications for global retail. The article examines how Japanese consumers are entering a new “spending era,” a trend driven by cultural, social, and economic factors. This newfound willingness to spend marks a significant departure from traditional saving habits long associated with Japanese consumers. However, not all luxury brands stand to benefit equally from this shift. Japan has always been a key luxury market, but it is also one of the most nuanced and sophisticated markets in the world. Japanese shoppers place a premium on timeless craftsmanship, cultural relevance, and understated elegance. They are less influenced by loud logos and flashy marketing that dominate other markets. This presents both opportunities and challenges for global luxury brands. Some brands, like Hermès and Chanel, are thriving by aligning their strategies with Japanese sensibilities. These brands understand the importance of respecting local tastes while delivering their signature exclusivity and craftsmanship. Others, however, struggle to make an impact, as their approaches fail to resonate with Japan’s discerning consumers. In the article, I analyze how luxury brands that prioritize authenticity and cultural alignment are winning in Japan. I also discuss why Japan’s spending boom is a unique opportunity for the global retail sector. Brands that adapt to these shifting dynamics can not only capture Japan’s growing market but also gain valuable insights for other regions with evolving consumer behaviours. It’s a privilege to contribute to discussions that highlight how cultural shifts influence the strategies of global brands. Link to article: https://lnkd.in/gTfVEWYg Thanks to Business Insider and Maria Paz Noyen for the opportunity! Be Bold. Be Daring. Be Different! #leadership #luxury #branding #change

In July, we saw the drastic results of luxury brands, with a huge shift of consumption away from the Chinese market, onto other regions, particularly Japan. While revenue generation has been the main focus, we often forget that clientelling plays a crucial role (together with product offering and brand management), on how to attract and retain luxury consumers. I recently wrote a piece on the client segmentation in China, and how they are impacted by travel, price arbitrage and levels of service at luxury brands. Thank you Aurelien Rigart and his incredible team at IT Consultis for editting and compiling this article. #china #luxury #chineseluxuryconsumers #LVMH #Kering #Richmont

The Chinese luxury market presents an immense potential and opportunity for European brands eyeing growth and expansion. China's significance in the global luxury market cannot be overstated. Bain & Company revealed that the country is responsible for nearly 35% of global luxury goods consumption. Luxury spending in China is also set to increase steadily, with the country accounting for 22-24% of luxury sales across the globe last year. Moreover, by 2030, the figure is expected to hit up to 40% of the world’s total. Unlock the full potential of your brand in Asia with AsiaCorp. Reach out to us at www.AsiaCorp.eu or at info@AsiaCorp.eu and find out more about how we specialize in guiding international consumer brands on their journey to expand across the diverse markets of Asia. #Asia #China #Luxurymarket #Opportunity #AsiaCorp https://lnkd.in/dDbnQnXx

I cannot agree more with your comments Aurelien Rigart but also with Bruno Pavlovsky (CHANEL Fashion President) for his confidence on the Chinese market. During crisis, the winners of tomorrow are often the ones to know it is the right time to invest. Luxury brands and retailers must continue to pursue innovation and excellence on their #omniretail approach. At Tmall & Tmall Luxury we believe that digital transformation and upgrading are essential for the long-term value of luxury brands, enabling them to identify new opportunities faster and more nimbly, helping brands to navigate economic cycles and achieve sustained growth! While we are still consolidating 11.11 data, China's Singles' Day shopping festival saw consumers spend more than expected despite the current negative feelings of a certain retail fatigue. Tmall Luxury strong double digit growth during 11.11 proved again the room for opportunities in the Chinese digital sphere. 🚀This year’s 11.11 Shopping Festival delivered solid results, setting new records in both sales and active buyers! 589 brands surpassed RMB100 million in GMV, a massive 46.5% increase compared to last year, with top names like Apple, Nike, Haier, and Xiaomi leading the way. Even more impressive, 45 brands crossed the RMB1 billion mark, showcasing the unmatched scale of this year’s event. 💎 88VIP members—China’s largest paid e-commerce membership program with 42M+ users—powered the festival’s success, with their order volume increasing over 50% YOY. Known for their high purchasing power, these members visit the platform 25+ days a month and spend 9x more than average shoppers. 💡 #AI played a substantial role, helping 4 million merchants boost efficiency by generating 100M+ marketing images, videos, and text and providing actionable insights for better consumer targeting. The AI-powered marketing tool Quanzhantui drove growth for over 1.6M products, showing the tech-driven future of e-commerce. #China #TmallLuxury #strategy #data #AI #content #consumerjourneyupgrade #CRM #invest #digitaltransformation

Embrace the Aspirational Customer 💡 The luxury market might have stabilized, but with China under significant economic pressure, and the US dealing with its own set of challenges, the landscape of luxury is undergoing profound changes. With the market expected to grow modestly in 2024, the key to success will be value propositions that resonate with a diverse customer base. No more can brands afford to remain in their comfort zones. The future of luxury lies in inclusivity and the agility to adapt. Developing an inclusive strategy that caters to the Aspirational Customer becomes crucial. Luxury brands need to work on 'nourishing relationships with top clients while future-proofing via widening the entry-level audience'. #FutureofLuxury #Digitalmarketing

The luxury market in Asia, especially in China, Japan, and South Korea, is grappling with notable challenges due to various economic and social factors. Recent economic conditions and regulatory measures in these countries have heavily impacted the sale of luxury goods. What are the challenges for luxury brands? we discuss this in our latest article where we cover the initiatives that both countries are setting in place and what how the luxury sector can turn this hiccup into an opportunity while still working to increase their brand reputation. https://lnkd.in/dF4yvecf