Expensive Taste. How Did Louis Vuitton Become #1 Luxury Brand in China?
We all know that China is a lucrative market for every international brand. But what does it mean for the fashion industry? Here is a number for you: Chinese luxury demand accounts almost for the 20% of global spend on fancy items. Not bad right? No wonder that there is an ongoing battle between word’s best fashion houses over this piece of the pie. French luxury brand maker Louis Vuitton was first foreign brand to ever set foot there. Today we are going to see what other factors contributed towards the company’s huge success and learn lessons from luxury brand marketing strategy.
A Growing Economy’s Demand for Luxury
Louis Vuitton entered China in 1992 and almost instantly it became a sought-after brand. How come? Well, for starters China was on its way to become world’s largest economy. This means that there was a whole class of nouveau riche itching to endorse their newly acquired status by purchasing luxury items. And what is the better way to do that than by buying well appraised Western brand whose founder was making trunks for the European royalty?
Although, this wasn’t some ingenious marketing move, Louis Vuitton seized the right moment to enter China and in business timing is everything. In comparison to Europe Chinese local luxury brands have a tough time breaking through at home. The luxury brand hierarchy in China is dominated by Western brands. Apart from Louis Vuitton, other top foreign brands in China include Burberry and jewellery makers like Bulgari and Cartier. With competition lurking behind every corner how did Louis Vuitton become so successful? Let’s take a closer look at the French luxury brand’s advertising campaigns and strategy.
Today Louis Vuitton’s brand value belongs among the very top businesses. Truth is that before coming to China Louis Vuitton was already an iconic brand with a rich history. It didn’t need to offer some innovative products. In fact, its main product hasn’t changed much through the years. That’s a major part of Louis Vuitton’s success in China and what high-end consumers were looking for: a piece of history to be associated with. Without a doubt, LV’s iconic checkered bag like nothing else has a flair of Western luxury lifestyle. Almost immediately, it became a hit and singlehandedly drove the majority of brand’s sales in China.
Playing China SEO Like a Pro
Another reason why Louis Vuitton is popular in China is its understanding of local SEO. Search engine marketing of luxury brands shares the same international SEO basics as any other industry. The key is integration in to the local digital market by making Louis Vuitton more Chinese. As many Western brands the Louis Vuitton Chinese name is a phonetic imitation, but adapted content wise.
The Louis Vuitton official international website has clear redirections to the Chinese website. Marketing strategists properly optimized the site for local search engine Baidu by displaying more visual content on SERP. The brand also took care of local social media channels like Weibo. And to keep up with the demands of modern Chinese customers Louis Vuitton launched its Chinese e-commerce website.
Do Diamonds Shine Forever?
As you can see, Louis Vuitton’s marketing success was almost guaranteed in China given these 3 factors. However, it is not about reaching top of the mountain, it is about staying there. In order to do that, you need to adapt your marketing strategy to ever-evolving reality and here are some problems that the French luxury brand faced at some point:
- Mrs. me too. Immense success of the LV’s checkered handbag finally backfired. It gained such a huge popularity partly because of the high demand from the middle class, who was eager to purchase a status item. As a result, high demand boosted counterfeit market to grow. Given the fact that China is notorious for its knock-off products, market soon became flooded with fake bags that were coming in all shapes and sizes.
- Luxury flair started to vanish. Since LV appeared on the shopping list of so many people, quite logically that it started to lose appeal for the high-end customers who value exclusivity above everything else. If everyone has a luxury bag, it is not a luxury bag anymore.
Louis Vuitton is now a ‘brand for secretaries’ in China https://t.co/mlteUP0FQR
— Sean Casey Williams (@SeanWilliams) December 10, 2016
- Diluted brand image. As a result, LV’s image started to be less clear and company found itself in the need to reinforce the brand values and establish better communication with the target audience.
Here is how French luxury brand tackled these problems.
Went for Subtler Design
What do you do when your brand’s logo becomes so ubiquitous, that it starts to lose its value? You remove it. This is exactly what Louis Vuitton did. In one of the advertising campaigns, it decided to downplay its famous logo by making it more subtle. Quite a bold move, considering that “LV pattern” is a signature mark of the French retailer. By some estimates, Chinese market is not completely ready to embrace this as local consumers still opt for “screaming logos”. On the other hand, low-key fashion is an emerging trend that promises to grow in the following years.
Collaborated with KOLs
How can you better relate to your target audience? In the market that is as challenging as Chinese this question becomes even more vital. In order to better communicate its message across, French luxury brand decided to use local Key Opinion Leaders (or KOLs). One of them is Fan Bingbing (范冰冰) who was the 4th highest-paid actress in the world back in 2015.
She has over 40 million followers on local microblogging site Weibo, which helped her to become official brand ambassador. Moreover, she is one of the most searched people on Taobabo (main search engine in China). Other good example of working with influencers would be teaming up with yet another local internet celebrity Gogoboi. He achieved immense popularity for the witty critique of the fashion world. So what did LV do? It let him do what he does the best and handed him over official Weibo account to cover Paris Fashion Week Fall/Winter 2015. This showed that French company understands current fashion trends and is open for the youth audience.
Introduced Brand’s History to The People
Let’s face it. We don’t really need luxury goods. If we place them on the Maslow’s hierarchy of needs, they will be probably somewhere near the top. The truth, however, is that fancy products don’t have to be rational. They need to evoke emotions. This is exactly what Louis Vuitton counted on. In order to celebrate its 20th anniversary in China it collaborated with a National Museum of China to create exhibition called “Voyages”.
The main idea behind it was to show LV’s travel heritage (remember those trunks for the European royalty?). What’s more interesting is that this was the first partnership with a brand for the Chinese museum. On the top of that, this was only the 2nd major exhibition after three yearlong renovation. Is there a better way to showcase your legacy than in the newly restored national museum?
Right now Louis Vuitton is facing another set of challenges: slowdown of the economic growth or high tariffs that result in the fact that company’s products cost more in China than in the country of origin. However, considering all the marketing moves French retailer did so far, there is a high probability it will remain as one of the most sought-after luxury brands in China.
And how is your brand performing in the foreign market? Drop us a line if you think it can do better. We will be glad to help you reach your full potential internationally.
Featured image source: cdn.luxuo.com