Insights from the CEIBS Prestige Brands Forum 2011


Sara White Wilson | May 06, 2011

Sara White Wilson attends the CEIBS Prestige Brands Forum 2011 in Shanghai and presents her exclusive insights round up from key speakers

Hublot CEO, Jean Claude Biver, addressing the CEIBS Prestige Brands Forum

Sara White Wilson attends the CEIBS Prestige Brands Forum 2011 in Shanghai and presents her exclusive insights round up from key speakers.

Framed by the stunning angles of the China Europe International Business School (CEIBS) campus, designed by I.M. Pei, international leaders in luxury brand management presented before a largely Chinese crowd of MBA students, and others equally attentive to shaping fresh approaches in a dynamic, swiftly advancing market.

Western luxury brands are on the offensive in China in a race to capitalize upon its sheer population mass and bounding economy, but the rising cost of entry into the market demands alternative approaches for Western brands. Inversely, while the Chinese want Western luxury brands (as their behaviour in consuming them certainly indicates this), the West is not consuming Chinese luxury brands as there doesn’t seem to be any on offer.

Moderator Prof. Quelch, Vice President & Dean CEIBS, crystallized these bi-lateral concerns during a relaxed but probing discussion panel comprised of the morning’s keynote speakers such as Mr. Jean-Claude Biver, CEO & Chairman of Hublot, Mr. Bruno Lannes, Partner, Bain & Company and Prof. Mark Ritson, Associate Professor of Marketing, Melbourne Business School.

Prof. Quelch succinctly asked, “When does growth destroy value?” (“When growth is driven by the production…Keep the market short,” answered Biver, who has increased sales of Hublot ten-fold in China in a remarkably short time). And, “What are the three most important enabling factors that can accelerate the likelihood of domestic, Chinese luxury brands emerging?” Responses included: experience, product, communication, an environment of tradition, beauty, art, and elevation of art and craft.

“ Western luxury brands are on the offensive in China, in a race to capitalise upon its sheer population mass and bounding economy ”

Prof. Mark Ritson emphasized a strong team but, more in tune with his championing of brand DNA formation and self-awareness as presented in his keynote speech: “There is always one lunatic at the beginning. The first thing that we are looking for in respect of China is that there is somebody out there at some point looking to change things. It always begins with a founder and a moment”.

Relative to the speed at which the Chinese market is advancing, one of the most abiding concerns on everyone’s mind was time. Prof. Ritson proposed it would take a minimum one hundred years – certainly not twenty, no matter how much capital is thrown at a brand – to develop a true Chinese luxury brand with a strong heritage, and that the categories of product offerings must evolve: “China will have some of the world’s greatest luxury brands but not in the old categories of the old world. There will be new categories…Look to the future. For, what is a luxury brand? It’s a new technology that dominates the category for two hundred years with great creativity and becomes part of the heritage for that creativity.”

Michel Gutsatz, Director of MBAs at Euromed Management and CEO of The Scriptorium Company, closed his presentation with this advice: Give time to time.

Later on in the afternoon, amidst a lively discussion between a panel of China’s luxury leaders, which included Director of LVMH Group China Andrew Wu and distinguished author and Vice Chairman of China’s Economic System Reform Research Association Wang Depei and Mr. Umberto Angeloni, Former Partner & CEO, Brioni Group; Partner & CEO Caruso Spa and Founder of Uman, one panellist suddenly grew impatient with the question that continued to persist.

“ China is not better or worse because they have a top leading brand or they don’t have one; it will come, what we need is the right environment – creativity and intangibles ”

“All this talk about creating a Chinese luxury brand,” interjected Daniel Talens, Managing Director of Hermès’ Asia Pacific watch division, “…it’s all about intangibles, everything is about intangibles – after hundreds of years of history, management, [brand] DNA, exchanges, cultural exchanges – everything…China is not better or worse because they have a top leading brand or they don’t have one; it will come, what we need is the right environment – creativity and intangibles.”

The proposed focus for the event, before presentations and discussions took attendees on a much greater course of analyses, was expressed thusly: “Collaboration and Differentiation: Diversify Core Competitiveness for Prestige Brands”. If an address was made to this topic during the event, it was this: Communication strategies and positioning for Western brand must be more sophisticated as the Chinese market itself is becoming more sophisticated, saturated, and entry simply more of an expensive endeavour. One of the event’s co-organizers, the People’s Government of Jing’an District of Shanghai, represents the most expensive retail district of the country that sees no signs of becoming more accessible.

Furthermore, the forum was a call for China not to manage and market China’s future in luxury by repeating Western strategy, but rather to find a way to appropriate it and make management and marketing its own. There are many luxury brands brewing in China that need the intangibles identified, the management cultivated in a way that makes sense within the domestic culture, and an opening to international exchange of innovation, ideas and commerce.