By Sarah Marsh - Business Insider - May 2, 2016, 6:15 PM

By Sarah Marsh

HAVANA (Reuters) - Chanel, the world's second largest luxury brand, said on Monday its efforts to curb the grey market have been successful and are helping boost revenue in China despite weaker overall demand for luxury goods.

The company narrowed its price gaps between the United States, Europe and Asia last year to prevent smugglers buying goods in one region to re-sell to another in the grey market.

"We reduced quite a lot the parallel market, mainly in Asia, and we have double-digit growth in our boutiques in mainland China," , Chanel's president of fashion, said in an interview in Havana.

Chanel will unveil its latest Cruise collection in Havana on Tuesday, in Cuba's first major fashion show since the 1959 revolution and another sign of warming relations between the Communist-ruled island and the West. The United States and Cuba formally agreed to restore diplomatic relations last July.

Despite the success in curbing grey market sales, the privately owned company expects slower sales growth this year, Pavlovsky told Reuters in Havana's landmark Teatro Marti. He declined to disclose figures.

He noted that Chanel has an entire team, including external lawyers, that monitors the secondary market.

The luxury goods industry been plagued in the last few months as a drop in global tourist traffic due to recent terrorist attacks, slower economic growth in China, and record low oil prices have dented the purchasing power of important luxury buyers from Russia and the Middle East.

In April, industry leader LVMH said its fashion and leather goods sales were flat while Hermessaid revenue growth slowed in the first quarter.

Pavlovsky said fewer Russians were traveling due to the weak rouble, and Brazil's recession has curbed demand there.

But Chanel was seeing solid growth in the United States, some parts of Europe such as Britain, Russia, China, Japan and Korea, he said. Chinese and Russians not traveling abroad as much were buying more at home.

"There is a slowdown but not such a big slowdown," he said.

Pavlovsky said Chanel was presenting its latest inter-seasonal Cruise line in Cuba because the country had inspired Karl Lagerfeld, the company's chief designer and creative director. Chanel, which began as a millinery store in 1909 in Paris, was also returning to its roots, he added.

Founder Coco Chanel designed early collections for wealthy and glamorous Americans holidaying on yachts and cruises in the Caribbean. Cruises to Cuba had been forbidden during the country's standoff with the United States.

Earlier on Monday, the first U.S. cruise ship to sail to the island in more than 50 years docked in Havana.

Chanel, which has fewer than 200 boutiques worldwide, will not be setting up shop in Cuba any time soon, Pavlovsky said. "Why not, one day," he said. "But not in the coming years."

(Reporting by Sarah Marsh; Editing by Richard Chang)

[LIRE L'ARTICLE EN ENTIER]

The Indian luxury market is expected to cross that amount during this year.

According to a research report by Euromonitor, India merely contributes 1-2% to the global luxury trade. However, despite this insignificant percentage, the market is growing at a compounded annual growth rate (CAGR) of about 25%. Indian luxury market is expected to cross $18.3 billion by 2016 from the current $14.7 billion.

As per a study by Assocham , in 2015, luxury jewellery, electronics, SUV cars and fine dining have grown immensely. Apparel, accessories, wines and spirits are growing as strongly as in the past. Consumption of branded wine is also likely to register a over 30% increase in the metro cities.

Indian brands are starting to be well-known, with Gitanjali Group (jewellery retailers), Titan Company (5^th largest manufacturer of wrist watch in the world) and PC Jeweller Limited (jewellery retailers) now accessing the top 50 luxury brands worldwide.

Finally, it is to be noted that cosmetics and beauty products markets are highly lucrative in India, since women’s purchasing power is greater.

READ THE FULL ARTICLE : [Luxury Society]

You would like to know more about Promise Consulting? Blog Promise Consulting

IMAGE : Olivier Rousteing - Directeur artistique Balmain

SOURCE: FORBES - GREG PETRO - MAY, 06, 2016

If you’re in tune with what’s going on in the world of tech startups, you’ve likely heard the phrase “growth hacking.” The phrase, coined in 2012 by Silicon Valley veteran Sean Ellis, refers to a way of marketing a business or product that attracts a massive following of fans and customers without spending a fortune on traditional marketing strategies.

When the phrase first started gaining traction among tech marketers, growth hacking was generally seen as something that software or e-commerce companies did. As we’ll see, growth hackers are very scientific in the way they approach marketing. They only care about growth that is measurable and provides useful data.

Today, luxury fashion companies like Balmain and Spring are adopting some core growth hacking strategies to give them an edge. Seasoned investors know the luxury market can be fickle, but looking for companies that are on the cutting edge of digital marketing could be a great way to separate the winners from the rest of the pack.

The keys to growth hacking

Before we get into specific examples, it’s useful to know some of the core concepts of growth hacking. Naturally, each company’s product/service is different, so specific tactics that work for one business may be useless to another. Regardless, growth hacking has brought some key points into focus for marketers in all industries today. Here are a few of the most important:

[1]- Product/market fit. The traditional means of product development is to spend months or years developing an offering behind closed doors, then launching it with one big push. The problem is these launches end up losing the company money because, while the product was spending a year or so in development, the market may have moved on. Growth hackers, on the other hand, start with a minimum viable product and get it out to potential customers as soon as possible. This allows them to see if there is a market for it, and early adopters can provide useful feedback about features that can be included with future iterations.

[2]- Eschew traditional marketing. Growth hackers don’t go for TV commercials, billboards and other mass marketing channels because they are extremely expensive and they don’t allow for precise measurement of results. Growth hackers widen the definition of marketing to include things like PR stunts, shows and anything else that gets a lot of attention on social and legacy media without costing a fortune.

[3]- Data is king. To that end, these low-cost campaigns must stand the test of social graphs, SEO rankings, A/B testing and other data-based metrics – these are the tools of the growth hacker.

Now we’ll look at how two well-known luxury fashion companies are applying these principles.

Balmain combines product/market fit with savvy social marketing

According to a profile in GQ, Balmain’s creative director Olivier Rousteing knew that the products he helped design for Balmain had a unique look that would catch on with luxury-seeking consumers. main combines product/market fit with savvy social marketing

But he was also keenly aware that in the world of fashion, if you don’t have a relationship with your fans that gives you prime visibility, people will move on to the next thing.

Rousteing made a gamble in 2012 that Instagram would become a key social channel, and that bet paid off. He started taking ridiculous pictures of himself while wearing the clothes he designed, and his gregariousness boosted his profile significantly, with Balmain’s rising in step.

[READ THE FULL ARTICLE]

The number of African millionaires might be higher by 2024, numbering around 258,000 millionaires, which equates to a rise of 53%. Africa is still largely underestimated and is slowly gaining ground on that market: 80% of luxury monobrand stores are operating in Morocco and South Africa.

Also, KPMG states that the ultra-wealthy individuals are mostly going to South Africa (Cape Town and Johannesburg) or to Morocco in Marrakech – which is attracting luxury hotel investors, as noted by CPP Luxury – and Casablanca.

Luxury goods for men, such as men’s clothing, watches, accessories, jewellery, etc., play a major role as they still have a higher income than women and are popular amongst wealthy men of power.

Source: Bloomberg - KPMG - CPP Luxury

You would like to know more about Promise Consulting? Blog Promise Consulting

According to McKinsey (March 2014), by 2022, middle class in China will change considerably, mainly geographically.

Tier 1 cities (Beijing, Shanghai, Guangzhou, Shenzhen) might see their share of urban middle class decline (from 40% in 2002 to 16% in 2022) while it should be rising in tier 2 and tier 3 cities (for the latter, from 15% to 31%). This middle class could reach up to 630 million people in 2022, which is accounting for around half of the population in China, thus making China a middle class country.

Since they are now spreading, brands looking for customers will have to focus more on tier 2 and tier 3 cities and especially on middle class customers.

Source: Mc Kinsey

You would like to know more about Promise Consulting? Blog Promise Consulting

FROM THE JING DAILY - APRIL, 20, 2016 - JENIIFER JAPP

Recent consumer surveys show that Chinese shoppers are more focused on premium everyday necessities, which is influencing how they make purchasing decisions abroad. A survey conducted by the FTConfidential Research unit at the Financial Times found that Chinese shoppers are more likely to avoid discretionary spending, especially when it comes to high-end fashion accessories like handbags, jewelry, and watches. This marks what the FT calls an “upheaval” in consumer spending patterns overseas, which is happening in tandem with changing habits at home.

According to an article published in FT last month, there was “a 10.2 per cent year-on-year growth in retail sales in the first two months of the year, down from a full-year 10.7 per cent in 2015 and 12 per cent in 2014.” Their survey asked 1,318 overseas Chinese tourists about their spending habits, and while they reported “they were less likely than previously to buy big-ticket items such as luxury handbags, jewelry and watches while traveling abroad,” they expressed interest in spending on cosmetics, clothing, electronics, and souvenirs, similar to results from a year before.

FT’s explanation for the reduced discretionary spending on high-end items like jewelry, watches, and handbags abroad is, in part, the rising reliance on cross-border e-commerce coupled with the fact that domestic prices for these goods are not as high as before. But the playing field is ever-changing—tax hikes on cross-border e-commerce announced early this month have thrown luxury industry professionals and shoppers for a loop.

Still, when Chinese shop abroad, they are increasingly focused on a different type of shopping spree. This includes an emphasis on looking for homegrown luxury brands, such as Coach in the United States, according to a recent survey. But with a bigger focus on health and quality products domestically, Chinese shoppers are also searching out more premium everyday necessities that are difficult to come by at home, and some of these shopping patterns are also molded by the latest safety concerns and unmet demands for new lifestyle trends.

After Chinese New Year, Xinhua reported on some of the most coveted items for Chinese consumers, broken down according to the various regions they were traveling to. To mitigate safety concerns, Chinese shoppers were buying items like high-end rice and sanitary pads in Japan—many consumers don’t trust the ones at home, as reports surfaced two years ago that some pads made in China contained a chemical that causes cancer. Chinese shoppers also bought condoms manufactured by the leading Japanese brand Okamoto, dodging the fakes pervading the market in China.

Meanwhile, Chinese consumers are seeking out products that will meet heightened standards for health and wellness, like protein powder from the United States. The Wall Street Journal said GNC’s sales rose almost 43 percent last year as an interest in hitting the gym swept Chinese shoppers. Chinese consumers are also buying more electric toothbrushes—a favorite purchase in Europe according to the Xinhua survey—and taking advantage of access to basic over-the-counter health care products like painkillers and vitamins in Japan. In Australia, a Chinese firm acquired supplement maker Swisse Wellness in part due to huge demand from overseas Chinese travelers.

These shifting shopping strategies are propelled by a group of outbound tourists whose spending outside of China is quickly rising (they spent $215 billion last year, up from $140 billion the year before), and overseas brands are clearly taking note.

[READ THE FULL ARTICLE]