Why Are Many Luxury Brands Keen On Cross-Border?

Stay in Bvlgari Hotel and have friends.

The restaurant eats French food, goes to Fendi to visit the home...

Although it sounds surprising at first, this is the new way of "unwilling to be lonely" luxury brand -- "crossover".

According to the world clothing shoes and hats net, recently, the world's fourth and China's first Bvlgari Hotel settled in Beijing.

Not only Bvlgari, Armani, Versace, LV and so on have built high-end hotels in many cities around the world.

In addition, LV also sells Xiaolong Bao and Chanel restaurant. Many luxury brands have extended their tentacles to traditional fields, and have diversified development.

Song Qinghui, a noted economist, pointed out that there are two reasons why luxury brands are keen on cross-border activities. One is the decline in the performance of luxury goods and the urgent need for other sectors to boost their performance.

Image; two, in order to improve their taste and enhance customer loyalty.

Zhou Ting, President of the Institute of wealth and quality research, said that the brand is expanding its customer penetration through lifestyle services, increasing customer stickiness through service industry, and building a diversified brand development strategy. The ultimate goal is to continue brand influence and achieve brand recognition integrity.

"51% consumers pursue" rich experience "more than luxury goods themselves.

"You can't afford luxury bags, jewelry, LV, and Chanel cakes."

Many netizens laugh at it.

LV's suitcase, Chanel's sachet, Bob's windbreaker, Fendi's leather, Bvlgari's jewelry...

High end luxury goods have always brought people a noble and cool feeling, but with the change of luxury market, luxury brands also began to seek change.

Combing reporters found that in recent years, the number of luxury brands has been increasing more and more widely and fields are becoming more and more extensive. Hermes crossover home, catering, aircraft and other fields, LV cross-border catering, stationery and hotels, Chanel cross-border catering and automobiles, Versace cross-border catering, hotels and aircraft, Ferragamo cross-border hotels, Armani cross-border hotels and restaurants, Bvlgari cross border hotel industry, SWAROVSKI launched the first wearable device series......

However, because of the luxury label, hotels, restaurants and other formats only exist in the core business circle of the first tier cities, with a high style, and the price is quite "luxurious".

Reporters online travel platform found that the lowest price of Beijing Bvlgari Hotel 3333 yuan per night, the most luxurious suite area of about 120 square meters to 10 thousand yuan per night, the basic housing price of more than 3000 yuan, and the nearby Jin Mao, Westin, Kempinski price 1000 to 2000 yuan per night.

Reporters found that in many areas, the catering industry because of its relatively low threshold, coffee, dessert shops such as the production chain is relatively short, becoming the best choice for luxury brands to choose the pition, but compared to the same product shops, consumption is still a lot more expensive.

LV's restaurant brand "Emerald Ramen Xiaolong Bao", per capita consumption of 100 yuan; Chanel restaurant per capita consumption of 1000 yuan.

The industry believes that luxury brands are accelerating the penetration of hotels, restaurants and other formats to fit the new consumption needs, and businesses are bringing fresh feelings to the shopping mall when competing for the introduction of new luxury goods stores.

According to a survey of luxury consumers in Boston by BCG, 51% of luxury consumers pursue "rich experience" more than luxury goods themselves.

Transfer of consumption demand to "lifestyle"

Shortly after the opening of Bvlgari in late September, many people came to experience. A customer who had checked in at Bvlgari hotel in Beijing reflected that the decoration style was very chic and simple and fashionable. The hotel displayed some exquisite Bvlgari jewelry.

The reporter sent an interview to Bvlgari hotel for an outline and a telegram asking for information about operation, but no reply was received as of press release.

In an interview with consumers, the reporter learned that with the growth of income and the pursuit of quality of life, many people, especially young people, are willing to try not to spend too much on luxury goods.

It can be seen that the demand for luxury goods is not only satisfied with the consumption of commodities, but also to the consumption of "lifestyle".

This year, LV, Gucci and Dior are close to young consumers. The product design is close to graffiti, street breeze and so on, and is resonated with young people.

A senior luxury consultant told reporters: "if you still think that luxury brands only sell traditional products, they are all wrong. In recent years, every major brand has been committed to keeping pace with the times of their own century old stores, because they know that history is both a wealth and a burden for luxury goods. It symbolizes wealth and displays the old spirit and vulgarity and keeps young people away.

How to win the favor of the wider masses, luxury goods

There are hundreds of tricks. Apart from designing all kinds of youthful garments, cross border cooperation is a combination of art, business and media.

Zhou Ting believes that consumers need to build a life circle and sell lifestyle.

With the fierce competition in the market, consumers become more excited, and the competition between products and values becomes invalid.

Leading brands want to be firmly positioned, they must constantly bring new ideas.

And those brands that cross the border to reach the corners of consumers are more likely to be winners.

"Cross-border cooperation will not pursue scale, but an extension of the format."

For luxury brands keen cross-border phenomenon, some analysts believe that the decline in the performance of the luxury goods market in recent years.

Consulting firm Bain data showed that global sales of luxury handbags, shoes and jewellery this year were higher than expected, thanks to the needs of consumers in China and younger generations.

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Statistics show that in the luxury market in 2017, China accounted for 32% of shoppers, more than any other country, thanks to their rising domestic and foreign purchases.

However, although 65% of luxury goods companies will record revenue growth in 2017, only 35% of them can achieve operating profit growth.

Cross border cooperation, luxury brand distinctive personalized characteristics made full eye.

But it is undeniable that the high priced passenger products, especially the high-end The Inn Boutique, face the problems of high cost and unoptimistic return on investment.

The development report on China's lodging industry in 2017 shows that high cost is still a common problem in the development of lodging enterprises.

This is especially true for personalized The Inn Boutique such as Bvlgari Hotel, which has strict facilities and services.

Zhao Huanyan, chief knowledge officer and senior economist of Huamei Consulting Group, told reporters that a room of 2000 yuan in a five star hotel has a return on assets of up to 25 years, with an annual return on assets of less than 5%.

The prospect of ultra high end consumption of several thousand dollars a night is not broad.

The investors of brand hotels are owners, and the brand owners of luxury goods win the royalty and management fees.

The investment return of luxury brand hotels is not optimistic, input-output is not directly proportional.

The The Inn Boutique is generally called "good or bad", and the brand side benefits more than the owner.

Zhao Huanyan told reporters.

"The cross-border cooperation of luxury brands will not pursue the scale, usually one city.

It will not scale the development of hotel restaurant business, so whether it is profitable or not will have little impact. It is just an extension of the format.

Zhou Ting told reporters that luxury brands did not plan to do business or make money.

Song Qinghui, a famous economist, believes that the cost and return of luxury brand hotels can be directly proportional to the cost.

This kind of hotel is aimed at high-end small crowd, focus on the established circle.

In China, it's always a huge market to buy expensive and not buy the right ones.

As for the impact on the entire market and industry, Zhou Ting believes that luxury brand hotels are one of the hotel market segments, which will not affect the overall situation of hotel competition, and have little impact on the hotel industry.

The prospect of the luxury brand is certainly good. After all, the individuation of the luxury brand's service is stronger than the standardization of the international five star hotels, and has different experience for the high-end group.

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