BEIJING: In a slowing Chinese economy, some luxury retailers are looking beyond their traditional customers and reassessing their pricing policy in what one has labelled a "scissors approach".
"We want to attract people who may not necessarily have high spending power but are passionate about fashion and want to express their individual taste, and also the more mature customers who are looking for luxury items," stated Laurent Chemla, chief executive of the newly opened Galeries Lafayette in Beijing.China Daily described
the store as "exuding a youthful energy" rather than "shouting luxury". And Chemla dismissed suggestions that the location in the busy Xidan shopping area was incompatible with its fashion aspirations and that its range would alienate upmarket shoppers.
"Our Beijing store is focused on new and exclusive fashion brands," he said, noting that it carried around 500 brands, of which 300 were directly imported and operated by the brands' own staff.
He explained the reason for this: "The majority of them – around 200 – did not have any prior presence in China ... this goes hand-in-hand with our strategy to be the place where new brands and trends are launched in Beijing."
While Galeries Lafayette currently has only one store in China, Lane Crawford, based in Hong Kong, has just opened its third mainland store in Shanghai, to sit alongside two in Beijing. But it too is taking a similar approach to the French-owned store.
"In China we see an increasing awareness of brand and product exclusivity," said President Andrew Keith. "The Chinese are looking for brands that are relatively rare in the market," he added.
This strategy, dubbed "edge with pedigree" by Jiang Yi, a Beijing-based independent designer, was not without pitfalls. He said Chinese fashionistas wanted to look "effortlessly stylish, but at the same time they are reluctant to spend thousands on an item that fails to elicit the envy of their peers".
Jiang's own advice for foreign-based retailers looking to establish a base in China was simple. Go to the second-tier cities," he said. "That's where all the money has come from."
Data sourced from China Daily; additional content by Warc staff