GLOBAL LUXURY TRENDS
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1 GLOBAL LUXURY TRENDS
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3 GLOBAL LUXURY TRENDS Innovative Strategies for Emerging Markets Edited by Jonas Hoffmann Associate Professor of Marketing, SKEMA Business School, France and Ivan Coste-Manière Professor of Marketing, SKEMA Business School, France
4 Selection and editorial matter Jonas Hoffmann and Ivan Coste-Manière 2013 Individual chapters individual contributors 2013 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act First published 2013 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number , of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN ISBN (ebook) DOI / This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. A catalog record for this book is available from the Library of Congress
5 CONTENTS List of Figures and Tables Notes on Contributors vii ix INTRODUCTION 1 Jonas Hoffmann and Ivan Coste-Manière 1 ON LUXURY STRATEGIZING 6 Jonas Hoffmann 2 PATHS FOR THE EMERGENCE OF GLOBAL CHINESE LUXURY BRANDS 23 Jonas Hoffmann and Betina Hoffmann 3 LUXO BRASIL AND OSKLEN S NEW LUXURY 37 Jonas Hoffmann 4 ÜBER LUXURY: FOR BILLIONAIRES ONLY 51 Alessandro Quintavalle 5 OCCUPATION FASHION BLOGGING: RELATION BETWEEN BLOGS AND LUXURY FASHION BRANDS 77 Rasa Stankeviciute 6 ENGAGING WITH THE LUXURY CONSUMER IN CHINA 89 Katrina Panchout 7 LUXURY AND ARTS IN CHINA: THE ISLAND6 CASE 101 Camille Jaganathen v
6 CONTENTS 8 LUXURY SHOPPING PLACES IN CHINA 114 Joanna Chen 9 PERSPECTIVES ON LUXURY OPERATIONS IN CHINA 126 Yves R. Lucky and Francesco Giliberti Birindelli 10 LUXURY CONSUMER TRIBES IN ASIA: INSIGHTS FROM SOUTH KOREA 138 Bernard Cova and Tae Youn Kim 11 LUXURY IN RUSSIA AND IN COUNTRIES OF EASTERN EUROPE 155 Laurent Lecamp 12 LUXURY IN INDIA: SEDUCTION BY HYPNOTIC SUBTLETY 171 Sandeep Vij 13 POLO AS A VEHICLE FOR COMMUNICATING LUXURY 185 Ivan Coste-Manière, Anna Hoarau and Cedric Laforge 14 MIMESIS AND THE NEXUS OF LUXURY INDUSTRY IN INDIA 201 Mukta Ramchandani 15 TESLA MOTORS, THE REINVENTION OF THE LUXURY SPORTS CAR INDUSTRY 209 Daniela Milosheska 16 WHY BUY LUXURY? INSIGHTS FROM CONSUMER RESEARCH 224 Maureen Morrin 17 ELIE SAAB: STRATEGIC PRESENCE IN THE DIGITAL LUXURY SPACE 242 Rasa Stankeviciute Index 259 vi
7 FIGURES AND TABLES FIGURES I.1 Global luxury trends Components of a business model Orientation of luxury value propositions Cyrus logo Luxury market versus financial wealth and HNWIs growth (base 100 in 2000) HNWIs versus billionaires growth (base 100 in 2000) Billionaires distribution by region (2012) Main watch-exporting countries HAGI Top Index versus S&P 500 growth (base 100 in 1980) HAGI Top and other asset classes (base 100 in 1980) Charleston Craze Luxury shopping area along Nangjing Xi road, Shanghai Backes & Strauss Clock during the British Polo Day in Singapore Backes & Strauss Regent Fancy Canary Process of mimetic desire Tesla Roadster Driver imagery of the Tesla brand Tesla s logo Tesla s newest model: The Model S Tesla s patents The growth of ELIE SAAB Facebook fans-base The growth of ELIE SAAB Twitter followers-base ELIE SAAB stories in the form of videos: Balade À Paris (I) ELIE SAAB stories in the form of videos: Balade À Paris (II) 250 vii
8 17.5 ELIE SAAB stories in the form of videos: ELIE SAAB show through the eyes of Rosario Dawson, Karlie Kloss, Rene Celestin ELIE SAAB stories in the form of videos: Against the fall of the night The difference in average time spent on ELIE SAAB website by new and returning visitors The comparison of the user engagement rates (C-Rate) for comments for CHRISTIAN DIOR, BURBERRY and ELIE SAAB The comparison of the user engagement rates (P-Rates) for post-likes for CHRISTIAN DIOR, BURBERRY and ELIE SAAB 256 TABLES 3.1 TRACES assessment of Osklen e products life cycle done by the Italian Ministry for the Environment, Land and Sea (IMELS), Instituto e, Forum das Americas and with the collaboration of Senai-Cetiqt Famous consumer tribes studied in marketing Famous brand communities studied in marketing Tribal management model at Ducati 142 viii
9 CONTRIBUTORS EDITORS Dr. Jonas Hoffmann is Associate Professor of Marketing at SKEMA Business School in France. He has extensive experience in consulting and executive training, and has been a speaker at international luxury events. He has written several articles about marketing and innovation in the luxury industry. He is the co-editor of Luxury Strategy in Action. Dr. Ivan Coste-Manière has extensive experience in the luxury industry; he has created eight companies in the fragrance, watches and marketing sector. He is Professor of Marketing and Director of the Master of Science in Luxury and Fashion Management at SKEMA Business School in France. He is the co-editor of Luxury Strategy in Action. CO-AUTHORS Joanna Chen holds a master s degree in Fashion Strategy Management. She is an expert in luxury retail-network improvement and luxury-malls creation in China. Based in Shanghai, China, she is now in charge of a new project of Hang Lung Properties. Bernard Cova is Professor of Marketing at Euromed Management, Marseilles, France, and Visiting Professor at Università Bocconi, Milan, Italy. A pioneer in the consumer tribes field since the early 1990s, his internationally influential research has emphasized what he calls the Mediterranean approach of tribal marketing. ix
10 NOTES ON CONTRIBUTORS Anna Hoarau holds a double master s degree in Criminology from University College London, UK, and in Luxury and Fashion Management from SKEMA, France. She is currently acting in establishing art exhibitions in China in collaboration with Jean-Claude Novaro, the great French glass blower. Betina Hoffmann holds an MSc in Marketing. She is currently Business Development Manager of a cosmetics company in Monaco. She also runs her own business where she designs and sells jewelry. She has previous experience in marketing and strategy in the luxury, fashion and cosmetics industries in Brazil and in France. Francesco Giliberti Birindelli studied Law and Economics at the Catholic University of Milan, Italy. He is a founder of [Trust] Partners, a multinational advisory firm, and is responsible for managing worldwide taxes of the Gucci Group since He is also Vice-President of the Supervisory Board of Marbert since Camille Jaganathen is a French student at SKEMA Business School, France. She studies International Business and Management at the Suzhou campus in China and is a former member of the island6 art collective in Shanghai, China. Cedric Laforge holds an MSc in Luxury and Fashion Management of SKEMA, France, and is an Accredited Jewelry Professional (AJP) of the Gemological Institute of America (GIA). He is currently a junior international marketing and communication manager at Backes & Strauss London. Laurent Lecamp graduated from Reims Management School, France, and GIA (Gemological Institute of America). He started his career with LVMH, before joining the world of watchmaking. He is the founder of an independent high-end watch brand, which has won many awards: CYRUS. He is also editor of luxury glossy magazines in Europe and Asia. Yves R. Lucky holds a master s degree in Economics from Nice University, France. Currently Professor of Creative Marketing and Regulatory Issues at SKEMA Business School, France, he is running x
11 NOTES ON CONTRIBUTORS two companies that are among the leading ones in Europe in the fields of premiums, promotions and specialty advertising. Daniela Milosheska is currently working in the field of event planning and management in the renowned agency P, with headquarters in Dubai, United Arab Emirates (UAE); Prague, the Czech Republic; and Skopje, Macedonia. She is collaborating with the world s leading PR gurus. She holds a master s degree in Fashion and Luxury Management from SKEMA, France. Maureen (Mimi) Morrin, PhD (New York University), is Professor of Marketing at Rutgers University, School of Business, in Camden, New Jersey, USA. Her research, published in several top marketing journals, focuses on the sensory aspects of consumption behavior. Before becoming an academic, she worked in advertising and brand management. Katrina Panchout holds a specialized master s degree in Strategic Communications Management. She is Professor of Marketing at SKEMA Business School, France, and Director for the International Master in Management Program. She has extensive professional experience, having worked for companies like Lacoste, Habitat and Weber Shandwick, in France and England. Alessandro Quintavalle is a graduate in Management and Economics Engineering at Politecnico di Milano, Italy. He holds an MBA from EADA Business School, Spain. He has decennial experience in luxury goods, having worked for several companies in the horological industry. He is currently CEO of Thomas Mercer. Mukta Ramchandani is a luxury and fashion consultant from India. She holds an MSc in Luxury and Fashion Management from SKEMA Business School in France. She currently works in Dubai, UAE. Rasa Stankeviciute is a freelance marketing consultant, specializing in fashion and luxury goods. She holds an MSc degree in International Marketing and Business Development. She is a blogger xi
12 NOTES ON CONTRIBUTORS on her blog Fashion Population ( com or Sandeep Vij is the founder of Banyan Netfaqs! Private Limited (BNPL), an Indian online media group, and is the former CEO of DDB Mudra Group. He has one of the most fruitful careers in the Indian advertising industry. TaeYounKimis Lecturer in Social Psychology of Fashion at Korea University, South Korea. She received a PhD in Sociology with a specialization in luxury consumption from the Department of Human and Social Sciences of the Sorbonne University, Paris 5 Descartes, France, in xii
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