Luxury Goods: Made in China

The article discusses the historical shift in perception of "Made in China" from being associated with
quality and craftsmanship to a focus on quantity and cost savings in the 20th century. It highlights a
contemporary trend where Chinese business leaders are striving to revive traditional craftsmanship and
create new luxury brands in response to China's booming economy and the growing demand for luxury
goods among Chinese consumers.
The article begins with the historical context, emphasizing China's rich history of producing high-quality
silk, ceramics, porcelain, and other luxury items that attracted Western merchants. However, in the 20th
century, there was a departure from craftsmanship in favor of mass production, leading to a decline in
material quality.
The article then shifts to the present, focusing on the efforts of Chinese business leaders to reestablish
China as a hub for luxury goods. It cites the example of Shanghai Tang, a global lifestyle brand founded
in 1994, which initially found success but faced challenges when Swiss luxury conglomerate Richemont
became a major shareholder. The founders eventually lost control of the company.
The overall theme underscores the difficulties Chinese companies face in transitioning from
manufacturing products for the global market to establishing successful global luxury brands. The article
suggests that time and resources are crucial ingredients for success in the competitive luxury goods arena.

The Luxury Compass Points the Way: The A.T. Kearney Luxury Compass is a tool used to assess a
brand's potential to achieve true luxury status. It consists of six criteria—three internal and three external
—aimed at evaluating a brand's ability to create high-quality products and build long-term success. The
criteria are as follows:
1. Core Focus on Product Creation: Successful luxury products are considered pieces of art that
evoke strong emotions and endure across generations. The brand's commitment to product
creation, including the customer experience, brand image, and service, is crucial.
2. Long-Term Vision and Strategy: Emphasizes the importance of a brand's long-term vision and
strategy over short-term financial gains. Building a successful luxury brand requires time,
investment, and patience.
3. Well-Known Savoir Faire and Craftsmanship: Luxury brands are recognized for their
expertise (savoir faire) and craftsmanship, often passed down through generations.
4. Specialized Selling Approach to VIP Clients: The point-of-sale experience is crucial, with a
focus on creating a unique shopping experience beyond the product itself. Luxury brands pay
special attention to VIP clients, offering exclusive perks and tailored services. Private boutiques,
such as those by Louis Vuitton, exemplify this approach.
5. Iconic Products and Style: Luxury brands are identifiable through iconic products and styles
that become timeless references within the industry.
6. Truly "Exclusive" Assortment: Beyond high prices, true luxury items are distinguished by
exclusivity that goes beyond affordability for everyday consumers.
Looking for China’s Next Luxury Brands: after examining 15 of China’s most
popular luxury brands companies by luxury compass the strength of five brands are given below:

NE•TIGER
“Luxury brands are known for their savoir faire in a very specific area, which is transmitted from
one management generation to the next.”
“Savoir faire" is a French term that translates to "know how" or "skill" in English. In the context
of luxury brands and craftsmanship, it refers to a high level of expertise, competence, and refined
skill in a particular area.
NE•TIGER, founded in 1992 by Zhang Zhifeng, is China's prominent designer specializing in
customized gala, wedding dresses, fur, and leather fashions. The brand uniquely integrates
Chinese culture and history into its creations, emphasizing the fusion of ancient and modern, East
and West. Evaluated through the Luxury Compass, NE•TIGER excels in well-known savoir faire,
particularly in Chinese tailoring techniques showcased in its handmade Hua Fu dresses. The
brand's commitment to traditional craftsmanship is evident in the use of nearly forgotten
techniques, such as the Southern Dynasty's Yun brocade. NE•TIGER's strengths also lie in
offering a truly exclusive assortment with dresses priced up to $30,000 and a specialized selling
approach catering to VIP clients through customization services.

Herborist

Launched in 1998 under the Shanghai Jahwa umbrella, Herborist, drawing on traditional Chinese
medicine, has become a commercial success with over $300 million in retail revenues. Despite
initial financial challenges, the brand demonstrated long-term vision, sustaining operations in
China to build a national brand. Positioned as part of the Chinese cosmetics elite, some Herborist
products sell for $70, with select items reaching $100. The Tai Chi product line, particularly the
day and night cream, contributes significantly to overseas revenues. Herborist excels in a
specialized selling approach to VIP clients, emphasizing the training of in-store beauty advisors
through an internal academy.

Longio

Founded in 1996 by Mi Changhong, Longio, a watch and jewelry firm, aims to challenge the
perception that all watchmakers are Western and establish China as a cradle for world-class
timepieces. Longio shifted from original equipment manufacturing (OEM) to a non-OEM
business in 2009, constituting 20% of its revenues. With a core focus on product creation,
Changhong, the main designer, sees Longio as a bridge between excellence and passion. All parts,
even for their most expensive watches, are made in China. The brand offers a truly exclusive
assortment, with products ranging from $1,500 to $16,000, and their most expensive watch,
featuring the "fenghuang" design, costs $2.6 million.
 Shang Xia

Established in 2008 by Chinese designer Jiang Qiong Er, Shang Xia, a brand under Hermès, aims
to create a 21st-century lifestyle brand rooted in the finest Chinese design and crafts. Jiang
emphasizes a timeless style inspired by Ming dynasty furniture. Shang Xia's strengths lie in its
core focus on product creation, blending Chinese traditional elements with contemporary flair.
Hermès grants the brand creative freedom and time for strategic growth, with plans to expand
abroad, starting with a store in Paris. Known for rare materials like eggshell porcelain and zitan
wood, Shang Xia's exclusive assortment includes high-priced items, such as a zitan rocking chair
priced over $130,000.

Wenjun

Wenjun, a Chinese distillery producing baijiu, faced challenges until Louis Vuitton Möet
Hennessy (LVMH) acquired a 55% share in 2007, positioning it as a super-premium brand in
China. Wenjun leverages its 450-year history, combining tradition with modernity through a
London-designed guqin-shaped bottle and expanding into red wine. The distillery's strengths
include traditional savoir faire, centuries of baijiu production expertise, and a modern approach to
quality control. Wenjun's VIP facilities and collaboration with Chinese baijiu mixologist Wu
Xiaoping enhance its specialized selling approach. The study of emerging Chinese luxury brands
reveals a blend of Chinese and Western elements, alliances with Western players, and fast-
learning capabilities, addressing brand storytelling gaps. Consumer perceptions of Chinese brands
are evolving, influenced by improved quality and strategic partnerships.