Recently we were charged with creating a retail strategy for an emerging Australian textile company focused on producing fine ‘alpaca’ scarfs, rugs and pull overs – the things we consider a luxury purchase for most Chinese. What eventuated has now become a model for other Chinese luxury market entrants looking for a ‘low risk’ entry strategy.
We went first to online; before even considering an offline retail model. Sounds simple but the traditional mode of market entry is to establish a key retail presence and explore other alternatives. This model; albeit simple is effective in breaking the sales barrier and establishing at least a presence amongst the 420 million mainland Chinese populating the internet.
There are a number of factors you must consider before taking this direction – beginning with identifying which luxury consumer (Intellectuals, followers, lovers or laggards) you’re selling to? How distribution can be supported? And which portal to house the store? Not to mention the legal and Chinese licensing implications – yet all are achievable as we’ve experienced.
The value of going first online has since created sales (makes money), it’s created 1000’s of online conversations around this new product and more importantly provided the brand with key learning’s in to the Chinese domestic market. These learning’s are critical in getting the message right; it can then be used to shape and develop the strategy further.
Social media in China provides clear channels to promote the products online, creating direct links back to retail stores for immediate sales. Fortunately for us the online communities in China love to talk; by following these conversations, measuring them, responding and anticipating discussions allows us to influence behaviour; thus creating more sales.
Selling luxury to Chinese is certainly a focus for many ambitious companies; thinking outside the square with ‘low risk’ market entry strategies can provide a pathway and expedite success beyond traditional channels.