Richemont Luxury Group Fires up in the Chinese Year of the Dragon

Isaac Mostovicz writes that the Chinese Year of the Dragon may be significant for luxury retailers ...

A recent article in the Wall Street Journal wrote that Richemont, the Swiss luxury goods group, has reported third-quarter sales of €2.6 billion ($3.3 billion) – in no small part down to its Asian, and in particular Chinese customers.

 

Image courtesy of Luxos

The Asia-Pacific region cemented Richemont’s position as one of Europe’s most important luxury manufacturers, with results of €1.05 billion, 36% up from the previous year. However, it is not only the domestic Chinese market that is prompting such strong profits. Sales in Europe also rose 16% to €914 million as Chinese tourists are purchasing the group’s goods – with items such as Cartier jewellery and Jaeger-Le Coultre watches finding favour – whilst visiting European cities such as Paris, Rome and Geneva.

 

Bernard Fornas, chief executive of Richemont’s Cartier brand commented: “The number of Chinese tourists is growing… and will help to “cushion the landing” in case things get worse in Europe’s economy.” 

 

As previously discussed, South-East Asian demand for luxury looks set to continue. Sparkle Roll Trading Development, a distributor of luxury goods in China, has five boutiques in Beijing and Shanghai selling Richard Mille and Parmigiani watches – with the average Parmigiani watch costing around 68,000 Swiss francs ($71,882).

 

“Sales are really good at the moment. At one of our boutiques we sold 60 watches in one month,” commented Mr. Firth, Sparkle Roll’s Chinese Marketing Director. By comparison, their stores in Europe sell on average five or six watches a month.

 

The year 2012 – which in Chinese horoscopes is the Year of the Dragon – is also affecting luxury sales. Chinese New Year is on January 23, with the emblem of the dragon being symptomatic of wealth, royalty and nobility. To celebrate this, independent watchmaker Parmigiani has created a dragon clockwork automaton crafted of white gold, imperial green jade, rubies, sapphires and a diamond.

 

At Janus Thinking consumers are characterized into two different groups – or world views – of Lambda and Theta, which explain how different personality types influence our choice of luxury.

 

The Parmigiani automaton might appeal to Lambda consumers due to the level of its craftsmanship, its uniqueness, and the fact that it there is a meaningful story behind its creation – rather than because of its price.

 

Theta consumers, however, will be attracted to such an item as it is a one of a kind, high-end design, and its high price helps to establish them within their preferred social class. Thetas seek acceptance, and their purchases reflect that.

 

Priced at 3.5 million Swiss francs ($3.7 million,) regardless of whether Theta or Lambda, its purchaser will no doubt have a strong affinity with the symbolic dragon.

[…] giant the Richemont Group is approaching the Year of the Dragon in his post for Janus Thinking: READ POST HERE […]

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