Chanel Will Show At Eic Cruise Terminal In Hongkong. Why?

After two years, Chanel returned to China to run the show, and the signal was self-evident.

According to the fashion business flash, French luxury brand Chanel announced in official Twitter account that it will re organize the 2019/2020 early spring holiday series fashion show in Hongkong Eic cruise terminal in November 6th. This is the first holiday series after Virginie Viard as the creative director of Chanel, which was released in Paris The Grand Palace in May this year. However, at present, the brand has not released any relevant information in the official account.

In 2017, Chanel held a series of 2018 early spring holidays in Chengdu, which reappeared in the early spring holiday show in Paris, where the ancient Greek civilization was the theme. This year's great show in Chengdu caused great concern in China. Chanel made a full two months' momentum for the event and almost covered the November cover of many major domestic fashion magazines including VOGUE, T, Jia Ren, and Figaro. The brand also invited many new generation of traffic stars and fashion bloggers to push the topic to the highest level in social media.

Prior to Chengdu's grand show, Chanel released the "Paris in Rome" Advanced Workshop Series in Beijing in 2016. In 2015, Chanel also released 2015 autumn and winter series in Nanjing and Chengdu.

Running a show in China in succession is obviously directly related to the continuous improvement of the strategic position of the Chinese market.

According to Chanel's 2018 earnings report released last month, Chanel's sales rose 10.5% to $11 billion 100 million last year, or 9 billion 800 million euros, and operating profit increased 8% to $3 billion over the same period last year. By region, Chanel's sales in Asia Pacific, including China, surged more than 20% to 4 billion 700 million US dollars. For the first time, it surpassed Europe as the world's largest brand market. The European market grew by 8% to 4 billion 300 million dollars last year, and the US market grew 7% to 2 billion 100 million US dollars.

Chanel has always been known for its marketing budget. Last year, Chanel spent nearly $1 billion 700 million on marketing promotion, fashion shows and hosting events, an increase of 9% compared to 2017 and a $122 million investment in research and development. In 2017, total marketing expenditure amounted to $1 billion 460 million. This means that Chanel has already felt the pressure of accelerating the transformation of the global luxury fashion industry, and began to attach importance to the new generation of young consumers and continue to increase marketing efforts.

Fashion show is a key means to shape and enhance brand image. Taking a show in key cities, drawing on the relationship between local consumers and improving the shopping desire of VIC high-end customers is also a commonly used method for luxury brands.

However, in the new market environment, fashion shows will most directly trigger commercial liquidation, and the social media topics raised by fashion shows will stimulate the sales growth of the most profitable beauty business. It is noteworthy that last year, Chanel cosmetic business accounted for 1/3 of the total sales, and the sales of perfume and cosmetics products increased by 50%.

At the beginning of this month, the Chanel beauty category has been pre sold in Tmall's official flagship store. Chanel perfume and Tmall official flagship store will be launched in August 2nd and will be incorporated into Tmall luxury platform Luxury Pavilion. Up to now, Chanel beauty Tmall official flagship store has attracted nearly 360 thousand fans' attention.

However, the Chanel chose to run a show in Hongkong, aiming at not only the Chinese market, but also its influence in the Asian market and the Chinese community.

Despite the continued blowout of luxury goods in mainland China, Hongkong is still regarded as an Asian barometer of Luxury Retailing. Chanel biographer Justine Picardie has said that Chanel has built international offices in London, which means one of the highest growth rates in the world, London second, while Hongkong ranks first.

In the first quarter of last year, Hongkong's retail performance was excellent. Harbour City's total sales volume of the first quarter of the year, which was considered the largest number of mainland tourists, was 10 billion, up 37 to 38% compared with the same period last year, the best season in history. In 2018, the net profit of Harbour City parent company's Kowloon warehouse increased by 6%, breaking through HK $10 billion. Harbour City's year-on-year retail sales surged 24% to HK $37 billion, accounting for 7.7% of Hongkong's total retail sales, with an average daily sales of HK $100 million and a monthly sales of HK $2700 per square foot, making it one of the most profitable high-end shopping malls in the world.

LVMH's beauty retailer Sephora is planning to return to Hongkong market after 7 years. In the third quarter of this year, it opened a new store in Hongkong international financial center mall. Sephora opened shop in Mong Kok, Hongkong in 2010, but was closed in 2012.

In addition, the first issue of Kangtai's Nash international magazine Vogue Hongkong edition was officially launched in March this year, which is the twenty-sixth Vogue regional version of the group. The Vogue Hongkong publisher Desiree Au said the magazine was mainly aimed at Hongkong and overseas expatriates in Canada, the United States and Britain.

It is noteworthy that the first time magazine cover personage 90 supermodel Gigi Hadid and Feifei Sun are wearing the Chanel 2019 spring summer high fix series. Desiree Au said in an interview that the cover is designed to reflect the cultural characteristics of Hongkong's East West integration and salute Karl Lagerfeld.

Group Chairman and chief executive officer Jonathan Newhouse also said that Hongkong is a magnet that attracts consumers for a long time. It is also a symbol of luxury and a luxury center in Greater China. Only the introduction of Vogue Hongkong edition means that Kangtai Nash is really entering the Asian fashion field.

Apart from Luxury Retailing, Hongkong is also the intersection of high-end consumption and art culture in Asia. Karina Dobrotvorskaya, editor in chief of Kangtai Nash international, said that Hongkong has a strong luxury market, which has huge demand for high-end fashion brands and modern art, and provides a combination of fashion and art, local and international, traditional and innovative.

Basel art exhibition, which is regarded as a major market for global art market due to its long history and huge trading volume, has made Hongkong one of the host places, which has also provided Hongkong with a unique cultural appeal. The art fair, founded in 1970, is recognized as the highest level art exhibition in the world. It is held annually in three places in Hongkong, Switzerland, Basel and Miami.

The endorsement of international luxury goods and publishing giants proves that there are still many opportunities in the Hongkong market. At the same time, as an Asian financial center, Hongkong is also a hub of capital huff and puff, attracting Internet giant Alibaba to launch a two listing in Hong Kong to raise about HK $20 billion.

However, the recent challenges faced by retail sales in Hongkong are also obvious. Hongkong's retail industry, which was warmer last year, once again showed signs of weakness in the first half of this year. According to the data released by the Hongkong Statistics Department, the sales volume of Hongkong's retail industry fell 4.5% to HK $37 billion 700 million in April, which is also the third month's decline in Hongkong's retail sales. The year-on-year decline in jewelry, clocks and precious gifts sales increased from 2.6% in March to 11.4%.

Bloomberg commented that sales of Hongkong made a significant contribution to luxury brands, contributed 5% to 10% of global luxury brands sales, and LVMH group sold 8% to 9% of its total turnover in Hongkong, while Gucci, the core brand of Kai Yun group, accounted for about 10% of its total sales in Hongkong. Earlier, jewelers Cartire Cartier and winning brand Jaeger Le Coulter Jaeger-LeCoultre said that last September's typhoon forced the Hongkong branch to close for several days, slowing the volume of regional business in the month.

At the same time, the mainland's efforts to reduce luxury tariffs and the new electricity supplier law are pulling Chinese consumers back to China. The transfer of mainland tourists supporting Hongkong's Luxury Retailing to the mainland is bound to affect Hongkong's retail sales. At this node, the voice of Luxury Retailing in Hongkong is lingering. While Chanel chooses to hold an early spring fashion show in Hongkong, it does not exclude its goal of boosting Hongkong's Luxury Retailing and reaffirming Hongkong's strategic position in the regional market.

Chanel, whose annual sales exceeded 10 billion dollars, does have such strength.

Unlike the "dark horse" Gucci, which is inspired by the psychological rise of young people, it is also different from the Louis Vuitton and Hermes, which are the starting point of the profit rich handbag accessories. Chanel is the only brand in the existing luxury brand of the head that makes the fashionable garments become "luxury goods". With the settling of time, the brand premium has been maximized. In contrast, LVMH and Kai Yun group rely on the huge brand matrix as backing.

According to Reuters analysts, Jean-Jacques Guion, chief financial officer of LVMH, has said that the valuation of Chanel is approaching 100 billion euros, far more than the 50 billion euros that the media speculated. This is a huge challenge for any buyer. Although Jean-Jacques Guion immediately denied that he had evaluated the Chanel valuation, the news still provided more references for the industry.

According to the fashion business express, as of today, the market value of LVMH is 192 billion 900 million euros, the market value of Gucci's parent group is 66 billion 100 million euros, and the market value of Hermes is 66 billion 600 million euros, which means that Chanel has become the second largest luxury group in the world after LVMH.

Some people believe that Chanel has become the world's most valuable single luxury brand. After all, LVMH has more than 70 brands. The main business of Kai Yun group is also composed of three core brands: Gucci, Saint Laurent and Bottega Veneta.

If the brand founder Gabrielle Chanel has established a core value for the brand to be handed down, the late creative director Karl Lagerfeld has developed the highest marginal profit that the fashion brand can achieve in the contemporary society through the development and marketing of different levels of product line from advanced customization to beauty makeup. This provides the capital for Chanel's independence from various aspects such as brand value to healthy operation. And his death has added a new brand legacy to Chanel outside Gabrielle Chanel.

As the only private company in the head luxury group, Chanel is typical for the times. It illustrates the possibility that luxury brands can still be monopolized without relying on acquisitions and monopolies, and become the brands most aspire to consumers. At the same time, it can also radiate influence, so that wherever the brand appears, it becomes the focus of attention.

It is foreseeable that more luxury brands headed by Chanel will also join the camp to boost Hongkong's key market and increasingly frequent landing in China. After all, although Hongkong is still full of instability, it is still Asia's luxury center.