Fortune awaits US luxury brands in China

Verona Chen with David Stewart
Jigsaw/Hall & Partners

French brands have a head start in the blossoming Chinese luxury market, but US labels can capitalise on their associations with democracy, optimism and upward mobility

For most Chinese people, the origin of luxury is synonymous with Europe, and European fashion houses that were early entrants to China are reaping benefits from this lead – having access to prime real estate and longer exposure has created higher brand awareness and recognition.

The most successful brands, defined by retail expansion and brand passion, are predictably those that entered early, anchored retail destinations with flagship boutiques and defined luxury districts in booming Chinese cities. An important extra success factor for the European houses was their insistence on maintaining control of their own distribution and retail propositions. Foregoing joint-venture partnerships or retail distributors, they avoided the structural impediments of these arrangements, maintaining the ability to act with agility in the market, as well as crucially maintaining sole control of their most important asset – their brand.