Paul Smith relaunches brand in China – Interview
May 24, 2012 | BY
clpstaff &clp articles &Five years after losses forced Paul Smith to retreat from the Chinese market, the British fashion line is back. David Tring spoke with Alice Wong, executive director of ImagineX – the company's new partner in the PRC
Under the new five-year partnership, Hong Kong-based ImagineX and Paul Smith will open 24 stores over the next five years. The first store to open will be in Tianjin with a flagship store in Shanghai later in the year.
ImagineX specialises in introducing Western brands into China and will run the operation with Paul Smith as a franchise. But Wong does not expect Paul Smith's return to be easy.
“Brand owners think China is an easy market with a lot of dollar signs, but customers are a lot smarter now, they have money and want to make the right choice,” she said.
Since Paul Smith's departure in 2008, many luxury brands have entered the market and, according to a survey from the World Luxury Association released this year, China is now the world's largest consumer of luxury goods.
This has led to a crowding of the market place. “You have to be very clear of the brand's point of difference and the specific selling point of the brand,” said Wong. Five years on, Paul Smith has to stand out even more than it did when it first entered China.
“Entering China requires strategy – building stores and building brands are two completely different things,” added Wong.
Generating buzz
Bringing a brand to China requires enormous capital. Brand owners cannot simply enter without investing in marketing campaigns, lucrative store locations and spending time generating buzz. Without this investment, the launch will not be successful.
Wong also commented on the difficulty of finding good staff in China. ImagineX spends a large amount of money and time on training and development. According to her: “Frontline staff are some of the most important parts of branding as they make up how the final brand is presented to customers.”
Consistency is also important when building a brand. This can prove difficult when working with large cities like Shanghai and Beijing and smaller interior cities like Chongqing or Hangzhou.
While there is one brand message, in larger cities a focus on major events and designer appearances sets the tone and voice. In smaller cities, it is all about customer relations, direct mailing and in-store events.
Marketing cost
When asked to name one of the most successful Western brands in China today, Wong picked Salvatore Ferragamo. “They have had rapid growth, appeal to a wide audience, have celebrities wearing their brand and really have loyal consumers,” said Wong.
Brand owners also need to consider the cost of marketing in China. Advertising can be expensive, much more so than Hong Kong or other parts of Asia. Wong cited a double page advertisement in Vogue China as one of the most expensive advertisements.
Positioning of stores is also challenging. Impressing landlords is necessary to get a brand in the right location. “Even if a brand is not well-known yet, placing it in the right location leaves a lasting impression to consumers,” said Wong.
Only time will tell whether Paul Smith is successful a second time around. However, there are many lessons to learn from Paul Smith's failure and its relaunch. Getting a brand into China is more difficult now than it ever has been before.
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