Luxury Stores Seize New Markets

A foreign capital Luxury goods The surge of department stores in China is surging. The luxury tycoons who once died in China's retail industry are coming back again. Can the domestic retail industry cope with it?

In the wake of China's slowing economy and anti-corruption, it seems that foreign luxury goods are not overcautious. Instead, they are laying a large market in China. Recently, Galeries Lafayette, the French luxury department store, one of the largest retail groups in Europe, announced its opening in Xidan, Beijing. Coincidentally, Hongkong's famous luxury department store Crawford also opened the largest store in Shanghai in times square this month.

Luo Gaozhan, general manager of hehe culture communication, said in an interview with reporters that with the increase of per capita income level and the individualization of consumers' aesthetic concept, many of the business people who have taken advantage of the luxury line have been booming in recent years, which indicates the great potential of China's high-end personalized brand market. Lord Buddha and Lafayette entered China at this time. They did their homework well, and got the rhythm of the early development of China's high-end department stores.

In fact, whether they are old Buddha or Lafayette, they are just a microcosm of the Chinese market. According to media reports, American luxury department stores Niemann Neiman Marcus and Messi's department store Macy 's chose the curve to enter China.

It is worth mentioning that in 1997, the founder of the Wangfujing on the side of the street, the founder of the loss due to the loss of business mode in 1998 closed, and after that, he no longer ambitious ambitions to enter the Chinese market. In fact, with the fate of Lord Buddha, Lian Kai Fu opened his first store in Shanghai in 2000, but failed to fully open in the mainland because of its poor performance in 2006.

An interesting phenomenon is that it once lost Wangfujing. Business circle The old Buddha once again set his eyes on the opening of the prosperous Xidan commercial circle, while Lian Crawford also chose Shanghai, which once lost. The two luxury goods crocodiles have recovered the lost land. At the same time, it means that the "big cake" of the 1 billion 300 million Chinese consumer market is attracting attractive fragrance.

Xu Junsong, an industry researcher at the China Information Network Industry Research Institute, said that the premise of returning to China was the potential of the Chinese market. It can be said that the two luxury giants had been very optimistic about China's potential many years ago. However, due to the lack of research on the psychology of Chinese consumers and improper location of shops, people's consumption ability has yet to be improved, the mode of operation is not suitable, and the timing of entry is immature, and so on, and finally, they have to withdraw from the Chinese market.

"In addition to the rising consumption power brought by the rising income level, the Chinese consumer's pursuit of market expansion is also the reason for the two luxury giants to return to the Chinese market. From this we can see that they all want to be positioned in fashion, not luxury goods. Xu Junsong said in a reporter's interview.

In recent years, with the rapid development of the electricity supplier, the traditional department stores in China are in the mire of profit margins and losses. Xu Junsong said that even without the impact of the electricity supplier, the domestic department store itself, as a relatively shallow business model of moat, will cause other factors to lead to a decline in profitability. These include rents, wages and peripheral competition.

Then, foreign luxury goods investors choose to go to China again at this time. Can they achieve the desired results?

Luo Gaozhan believes that Lord Buddha and Lafayette belong to high-end department stores, and the competition in China's retail market is not fierce.

In fact, he is not alone in having the same view. Xu Junsong told reporters that luxury goods department giants are making a comeback, not to grab more, but to create a market segment. The "light extravagance" of Lord Buddha and the "buyer system" mode of Lafayette are different from those of the vast majority of department stores in China. This differentiated management approach fits the development trend of China's future department stores, and also gives inspiration to domestic department stores.

Xu Junsong stressed that in the face of competition between the electricity supplier and the same industry, the traditional department stores in China need more advanced products. Management Ideas, more differentiated business strategies and higher level of customer service can take a place in the minds of consumers. If we continue to linger in the lower end of the industry, there is no way out for homogenization competition.

Finally, Xu Junsong said that what the department stores need to do is to study consumer psychology, consumption patterns and behaviors, and keep pace with the upgrading of consumption. If the department store industry has remained unchanged, even without the competition of foreign brands and the impact of electricity suppliers, the department stores in China will also constantly eliminate department stores that are not able to keep pace with market changes.