South China Morning Post
November 17, 2004

Luxury, it's a Sino the times
The surge in demand for brand names in the region sees Hong Kong play host to this year's premier industry gathering, writes Kitty Go

HONG KONG HAS long established itself as the Asian headquarters (outside Japan) for practically every European and American luxury brand. It's also the most productive retail market in sales per square foot in Asia ex-Japan. It's no surprise then that Asia contributes to 25 per cent of total luxury sales and, including Japan, accounts for about 40 per cent of the market, putting the entire region ahead of the US and Europe.

Then there is, of course, the buzz around business in China where investment accounts for a significant share of every major company's business plan, with Hong Kong playing a key role. The mainland is also viewed to have the most extraordinary potential growth in branded goods among emerging markets.

It's for these reasons that Luxury 2004: The Lure of Asia is convening this year at the Grand Hyatt hotel in Hong Kong (December 1-2) after three years of Paris conventions.

"The move from Paris to Hong Kong is significant because it confirms the direction of fashion houses and brands and market China consumers for luxury for the near and medium term. Fashion editor at the International Herald Tribune Suzy Menkes told me that she would have liked to hold the conference in Shanghai, but still it's logistically easier to hold the conference in Hong Kong," says Handel Lee, co-chairman of Three on the Bund, House of Three.

The conference will bring together business leaders and designers to discuss the challenges, opportunities and other topics for international fashion brands operating in the region or planning to enter the luxury goods market here.

"As this is an international conference, the delegates come from every corner of the globe. The audience tends to be a comprehensive mix of business and industry executives that are associated with some facet of the luxury and fashion business," says Randy Weddle, Asia-Pacific managing director of the International Herald Tribune, who's organising the conference. The opening keynote speaker will be Bernard Arnault, chairman of LVMH. His participation is in line with previous keynote addresses by Tom Ford (2001), Ralph Lauren (2002) and Giorgio Armani (2003).

This year, speakers such as Diego Della Valle, chairman and chief executive of Tod's, Alber Elbaz, head designer of Lanvin, and Ferruccio Ferragamo, chief executive of Salvatore Ferragamo Italia, will explore the subject of retail expansion of the luxury and fashion sector within Asia.

Noted industry leaders such as John Hooks, group commercial director, Giorgio Armani, Giorgio Armani Japan, will describe the company's overall philosophy towards retail expansion and explain specifically what strategy they are employing in emerging markets such as China and Eastern Europe. Likewise, Francis Gouten, regional chief executive of Richemont Asia-Pacific, will discuss their current and future business plans in the region. Handel Lee will talk about "the reintroduction and infusion of elegant culture and lifestyle in China's contemporary society".

Asia is once again a region of dynamic growth in fashion and luxury goods, according to a spokesman for Giorgio Armani. "The Japanese economy is trending positively after a decade of stagnation and countries like South Korea, Taiwan and Australia are also witnessing strong growth, while China is obviously the market on everyone's radar," he says.

"With such a large percentage of global luxury brands sales coming from Asia, it is a natural move for the conference to take place in Hong Kong - the gateway to the People's Republic of China for the luxury industry," says Menkes, the conference moderator. "This conference will examine the exciting opportunities and potential pitfalls of fashion's 21st-century gold rush."

Does this mean luxury has lost its lustre in the west? "On the contrary," says Paul Husband, a participating speaker and managing director of Hong Kong -based Husband Retailing, "The US has been a very strong market for luxury brands this year and Europe has been fairly flat. I don't think it's a case of the west declining and the east rising. The organisers are just more aware of where the luxury business is going."

Husband also credits a Hongkong Land initiative as a reason for the move from Paris to Hong Kong. Project Phoenix was formed to focus international attention back to Hong Kong in the wake of Sars. The organisation comprises 33 companies in industries ranging from property to travel: Hongkong Land, Swire, Wharf Holdings and other developers working together with retailers such as Joyce, LVMH, Gucci, Prada, Chanel, Lane Crawford, and hotels such as the Mandarin Oriental, The Peninsula and Shangri-La, and even airlines British Airways, Cathay Pacific and Dragonair. Husband chaired one of the working groups looking for a major consumer and, having been to previous luxury fashion conferences, he says such a convention will "turn the spotlight on to Hong Kong and bring the brand and principals here and raise the profile".

There is still no indication, however that the conference will be held in Hong Kong every year, nor is there a move to organise a conference specifically to address issues concerning the Asian market. Lee thinks the worst thing in fashion is "dilution". As Gouten says, "I think that too many seminars will kill the interests of the people. One seminar once a year is enough. I do not think we have a specific need for conferences for the Asian market. The majority of the luxury brands are coming from Europe."

Ian Hawksworth, executive director of Hongkong Land, the conference's principal sponsor, says: "The development of the luxury retail sector in Hong Kong over the past 10 years has been a phenomenon. This has been driven by domestic growth and the rapid development of the China market.

"Today, Hong Kong is one of the great luxury capitals of the world, and continues to grow in line with China's economy. Hongkong Land's properties in the Central business district are home to the world's most concentrated collection of leading fashion and lifestyle brands within a quarter square mile. The city is an excellent venue for this conference."

Cool.

very impressive--

yet another achievement for HK this year (including securing the intl telco conference in 2006 away from Geneva, where it's been held ever since)--

these next 3-5 years promise incredible potential for HK!! :D

Good news for Hong Kong ....Paris ,Tokyo ,Hong Kong!

Armani looks east to China for inspiration

HONG KONG, March 29, 2006 (AFP) - Italian fashion designer Giorgio Armani said Wednesday he always looks east to China for inspiration.

"China has always been very present in my collection. Even before I came here, I've always been inspired by China, I have always dreamt and imagined Asia. It fascinates me," he told reporters in Hong Kong.

With the opening up of the country and growing personal fortunes, Armani said he hoped to further expand his business in mainland China.

"Since my last visit two years ago when we had only a handful of shops, today we have over 30; this is becoming a very large reality and there's much more to come," he said.

"In fact, the Greater China market now represents even a bigger market in retail than in South Korea where we've been present for 15 years. It demonstrates the speed with which the market is now growing and the potential."

Greater China -- mainland China, Hong Kong and Taiwan -- recorded the largest increase in worldwide sales, up 38 percent, for the Armani Group in the first half of last year.

Armani is due to present his Armani/Prive spring-summer haute couture collection in a show for 1,500 guests in Hong Kong on Thursday.

His trip to the southern Chinese territory coincides with the opening of Solomon R. Guggenheim's exhibition of his work at the Shanghai Art Museum.

Up to 600 pieces of his work, which have been exhibited in Berlin, London, Rome and Tokyo, will be shown at the Chinese museum for a month.

HK still the lap of luxury, says style king Armani hails city's urge to be at the centre of fashion
30 March 2006
South China Morning Post

Fashion designer Giorgio Armani believes the growth of the mainland market will not undermine Hong Kong's status as the capital of luxury goods.

"Hong Kong is an extremely important window and reference point for the quick development of all the luxury brands in China," he said in the city yesterday.

He said that 15 years ago, no one could have imagined China to be what it was today.

"But Hong Kong will last for many years in the future {hellip} this is where the money is," he said.

The influential Italian designer, who has given fashion a new definition since the 1970s, is in town for the second time for tonight's presentation of his 2006 spring/ summer haute couture collection. He then heads to Shanghai for the opening of the Solomon R. Guggenheim's Giorgio Armani Retrospective at the Shanghai Art Museum on Saturday.

During his short stay, Armani's observation of Hong Kong's luxury goods market reaffirmed his belief in the city's leading role, but he also holds big hopes for the greater China market.

"Here in particular, people have a great urge to participate in fashion. There's this intense excitement of fashion," he said.

Armani predicted that India could become the next China when it came to the luxury market.

"In fact, in India they have begun to see the impact of luxury goods that China is having, particularly in fashion and luxury goods. They are now planning to replicate the great impact that China is having on the market," he said.

Armani said Lane Crawford's chief, Jennifer Woo, took him to the IFC store's platinum suite, which has luxurious facilities such as bathrooms for premium customers.

"The luxury you see here is something that's very tangible. People continue to come here to shop. It's important, just like Paris," he said. "These kind of resources ... you can't find them in Europe."

He said he had observed an extremely upscale market for high-end clients in Hong Kong.

"This type of service is extremely important ... Hence the investment in Armani Chater House is something we see as a long term commitment," he said.

Diamonds, Breguet Watches Boost Hong Kong Lunar New Year Sales
By Fion Li - Feb 10, 2011 3:28 AM ET

Feb. 2 (Bloomberg) -- Chinese tourists visiting Hong Kong in record numbers over the Lunar New Year holidays splurged on diamonds, cosmetics and watches, boosting retailers’ sales.

Chow Sang Sang Holdings International Ltd.’s revenue climbed 17 percent during the first week of the Lunar New Year and the 12 days leading up to it, according to Dennis Lau, the jeweler’s director of sales operations.

Greater China will be the world’s biggest market for high- end products in a decade, growing 21 percent a year on average, according to Aaron Fischer, a Hong Kong-based analyst at CLSA Ltd. That growth is a boon for Hong Kong, a favored destination for Chinese shoppers, where tax-free luxury goods cost 30 percent less on average and the risk of counterfeit products is low, Fischer said.

“Per-capita spending on watches in Hong Kong is off the charts,” Fischer said in a briefing today. While the Chinese have been big buyers of luxury goods for several years, “growth seems to be accelerating,” he said.

Visitor arrivals to the former British colony from mainland China during the country’s Feb. 2-8 holiday period reached a record 663,000, surpassing last year’s 570,000, according to data from the Hong Kong Immigration Department.

That helped retailers like Chow Sang Sang, where the biggest-ticket item sold during the period was a HK$300,000 ($38,500) diamond bought by a customer from mainland China, Lau said in a phone interview.

Breguet Watches

“Our sales representatives at the Rolex and Tudor boutique in Tsim Sha Tsui were so busy with customers that they had no breaks at all,” said Anna Luk, Emperor Watch & Jewellery Ltd.’s investor relations manager. LVMH Moet Hennessy Louis Vuitton SA, the world’s biggest luxury goods maker, owns a 7.4 percent stake in Emperor, whose market value more than doubled last year.

Breguet watches selling for more than HK$1 million were among the items snapped up by mainland Chinese, Luk said. Emperor, which has more than doubled in market value in the past year, fell 3.6 percent to close at HK$1.08 in Hong Kong trading.

Hong Kong, a southern Chinese city with a population of about 7 million, is the biggest market for Swiss watchmakers as retailers sell the timepieces to visitors from across the border.

About 20 percent of last year’s 16.2 billion Swiss francs worth of watch exports from Switzerland were to Hong Kong, or about double the share of the U.S., according to data from the Federation of the Swiss Watch Industry. Sales in mainland China -- which doesn’t include Hong Kong, Macau or Taiwan -- accounted for another 7 percent.

‘Wealth and Success’

“Chinese consumers love watches and jewelry for their intrinsic value, and accessories are great vehicles to display wealth and success,” CLSA analysts Fischer and Mariana Kou said in a research report last month. “Some 24 percent of people we surveyed that earn around 41,976 yuan ($6,400) per year said they would be willing to spend more than 50,000 yuan on a watch.”

Sa Sa International Holdings Ltd., a Hong Kong-based cosmetics and skin-care products retailer, increased sales more than 10 percent from last year’s holiday period.

Sa Sa fell 4.9 percent in Hong Kong trading, trimming its gain over the past year to 64 percent. Chow Sang Sang declined 2.4 percent and has climbed 83 percent over the past 12 months.

Retailers in the city are also benefiting as China’s currency strengthens against the Hong Kong dollar, increasing the purchasing power of visitors from the mainland. The yuan has gained 3.9 percent against Hong Kong’s currency in the past year.

Dior, Estee Lauder

A housewife from mainland China who only identified herself by her last name, Huang, said she planned to spend HK$100,000 during a two-day visit to Hong Kong.

“It’s much cheaper to buy in Hong Kong as the yuan is stronger,” she said, holding a shopping bag filled with Christian Dior clothes and Estee Lauder cosmetics as she walked around the Tsim Sha Tsui tourist district on Feb. 7. “I have spent HK$30,000 today so far.”

About 10 percent of global luxury goods sales are made in greater China, and the sector will be the fastest-growing consumer category over the next five years, Fischer and Kou said in their report. Including sales to Chinese tourists abroad would raise that number to 15 percent, they said.

“Given rising incomes and supportive social factors, we expect greater Chinese customers to account for 44 percent of global luxury sales by 2020,” the analysts wrote.

http://www.bloomberg.com/news/2011-02-10/diamonds-breguet-watches-boost-hong-kong-lunar-new-year-sales-to-chinese.html

Luxury watchmakers follow the money to Asia
4 February 2011
AFP

A measure of any Asian businessman is the time he keeps and, far more importantly, the watch he wears to mark it.

A handshake can be soft or firm but will likely soon be followed by a glance to the wrist to see the watch wrapped around it, especially in China.

A heavy slab of gold could be a marker that the person is from an inland city. A more expensive, understated watch could be a sign that they're from the coastal cities of Shanghai, Shenzhen or Beijing.

New money, in Chinese terms, versus old. Around 10 or 15 years ago, the coastal cities would also just go for gold; a chunky watch with a meaty gold strap, says watch enthusiast Harry Qin.

"In Asia probably more than in Europe or North America, a watch is something that can hint the status," the Shanghai private equity investor, who has a $250,000 collection of 18 timepieces, told AFP.

"But many businessmen just wear a gold Rolex. Especially in less developed cities inland, a gold Rolex is still a very easy way to show other people that you've got money."

Taste for fine watches has developed over time, says Qin, who is just one of the many enthusiasts and serious collectors in Asia that helped make 2010 the second best year in the Swiss watchmaking industry's history.

Not bad, in the middle of a severe global downturn.

Jean-Daniel Pasche, president of the Federation of the Swiss Watch Industry, estimates export sales for brand new watches for 2010 should be "slightly better" than the 2007 figure of $16.5 billion. Only 2008 was better, at $18 billion.

Over half of those exports went to Asia.

"It is our first market," he told AFP. "For the first eleven months of 2010, 52 percent of our Swiss watch exports in value went to Asia.

"Asian markets, except Japan, are generally growing faster and stronger than other markets due to the positive economic situation in these countries."

Sales were up almost 55 percent in mainland China and almost 46 percent in Hong Kong.

The main driver behind the market is simple: hundreds of thousands of Chinese people now have serious money to spend.

According to the Hurun Rich List, the Chinese equivalent of the Forbes or Sunday Times rich lists, there are now 875,000 Chinese worth over a million US dollars. And almost 200 of these are billionaires.

Hurun also compile a list of what brands are favoured by China's ultra-rich. Patek Philippe is the top luxury watch, followed by Vacheron Constantin, then Cartier.

But Thierry Dupois, the federation's Asia chief, says the Chinese have always loved watches.

"First and foremost, in China, there is a passion for timekeeping and fine watches that has existed for centuries," he told AFP.

"In addition to that, in today's Chinese society, there is of course the interest in watches as a 'status-symbol'."

Resellers also had a good year. Christie's notched up more than $90 million globally in watch sales, the auctioneer's highest ever figure for watches -- $27 million of that figure came from the firm's Hong Kong auctions.

But Sam Hines, head of watches sales for Christie's Hong Kong, says Asian buyers are not just showing up at Hong Kong auctions. They are attending auctions all over the world.

"Asian buyers are everywhere now," he told AFP. "In 2010, the Asian buying in our Christie's global sales increased 84 percent in value compared to 2009."

Su Jia Xian, a watch collector who helps run the PuristSPro.com dedicated watch website, says Chinese buyers now have specific preferences.

"At the top end of the market Vacheron Constantin and Blancpain are notably popular. Each derives 50 percent or more of its sales from China," the Singaporean told AFP.

"In the mass market segment Omega is the leader, but Rolex does well too.

"The taste of the Chinese market is fairly conservative by the standards of the rest of the world, it likes smaller, round watches in yellow or rose gold, sometimes with a matching gold bracelet."

Omega president Stephen Urquhart says Asian buyers are particularly well informed about the brand and know what they want before they buy, the watchmaker's links to the James Bond movie franchise also helped boost sales.

"Asia is incredibly important to the brand," he told AFP. "We've been there for more than a century and have a leadership position in almost every Asian market.

"During the financial downturn we were able to gain share in all the markets there and I think that's a testimony to the strength of the brand in Asia."

At watch auctioneer Antiquorum's Hong Kong offices, 452 rare and expensive watches are splayed out across tables and cabinets and stacked in boxes as staff catalogue, price and number them for an auction expected to raise around $4 million.

Top of the range here is a Patek Philippe 'Celestial' which tracks the northern hemisphere's stars as well as tell the time. It might take at least an hour to set but it's expected to sell for $200,000.

Other watches include a rare 1958 'James Bond' Rolex, expected to raise $65,000 and another Patek Philippe, an 18 carat yellow gold watch which is also worth around $200,000.

The most expensive timepiece Antiquorum has ever sold was a Patek Philippe pocket watch, bought in Geneva in November 2009 by a Taiwanese buyer for $4 million.

"It's one of the very few investments that you can appreciate every day," Louisa Lo, Antiquorum Asia's marketing director, told AFP.

"You can wear it on your wrist, you can show off to your friends, you can appreciate the movements, the intricate details. These are not the kind of enjoyments you can get from, let's say, a yacht or luxury properties."

Over half the bidders at the auction on February 26 are expected to be from mainland China, the rest will be from Hong Kong, Taiwan, Singapore, Malaysia and Indonesia.

Mr Qin, the Shanghai private equity investor and watch enthusiast, was in Hong Kong on business but also to have the staff inspect his $13,000 Chopard watch. And to check out the wares, he often bids online for fine watches.

"I buy watches to wear," he told AFP. "I also like to keep a few in my drawer to admire and to wind. I have loved watches for a long time, it is the mechanical side I like. Their movement. Their sound.

"I hope they will appreciate in value over time but that is not the main reason. I love them. There is something very special about a good watch."

HK roads are filled with BMws and Mercedes Benzes...Toyotas are hard to find here, except the vans which are used as commuter vehicles.

China's middle class stampede for luxury handbags
28 February 2011
AFP

It could be a queue for a pop concert, a top nightclub or even the opening night at the theatre. But the hundreds of people lined up in a Hong Kong street are actually waiting to bag a bit of luxury.

"We're looking for new handbags," says student Celeste Law as she queues patiently alongside her friend Karina Luh outside the supermarket-sized branch of Chanel on Hong Kong's Canton Road.

The students, both 20, already sport impressive accessories -- Celeste carries a Louis Vuitton monogrammed bag, while her friend's is from Chanel.

Both work part-time and saved for over a year to buy their trophies.

"We want them because of the famous brand," said Celeste. "What can I say? People will focus on your bag. It's about feeling confident."

Even on a weekday morning, Canton Road is flooded with shoppers happy to pay a small fortune for a luxury tote, shoulder bag or evening clutch in its jumbo designer stores.

Many are from the Chinese mainland, and some even carry suitcases to get their purchases home. The market for such luxury has extended far beyond China's roughly 900,000 US dollar millionaires.

The market is now being driven by China's burgeoning middle class, with the truly rich going ever further upmarket -- happily spending tens of thousands of dollars on the right bag.

Handbag sales for Prada alone grew by over 80 percent in China in 2010, Sebastian Suhl, chief operating officer at the Prada Group, told AFP, while those of the group's Miu Miu brand rocketed by over 500 percent.

"We believe we have only begun to scratch the surface of China's potential," Suhl added.

The brokerage firm CLSA Asia-Pacific Markets predicts China will become the world's largest luxury goods market by 2020, accounting for 44 percent of worldwide sales and bigger than the entire global market is now.

Christina Ko, who blogs at HK Fashion Geek, said the Asian love of the luxury bag has become "a cultural fact. In the same way that Asians prefer rice to potatoes, they also prefer luxury handbags to non-branded ones."

But as customers become more sophisticated, the demand is changing -- bringing those who would previously have bought fakes into the market for the real thing.

"Middle class people are getting the Louis Vuitton bags, and the people who used to get them are now looking for something else," Amanda Lee, who writes the Hong Kong-based blog Fashionography, told AFP.

Zuki Ho, a sales associate and mother, is one of the middle-class buyers boosting the industry: she owns 15 luxury handbags, and once spent HK$40,000 (US $5,135) "double her monthly salary" on a handbag.

She says she loves handbags because "I enjoy being watched on the street when I'm carrying the bag." But she would never buy a fake -- "I'm afraid of being found out," she added.

Fakes remain big business in China, but genuine luxury is bigger.

And while women are a growing force in the Chinese designer market, men are not immune, competing fiercely over the most stylish 'man bag'.

At the second-hand luxury handbag store Milan Station in Hong Kong's upmarket Central district, bags sometimes sell for more than their retail price.

"People always ask for some kind of limited edition, a more expensive bag," supervisor Jackie Lau told AFP. "People don't feel guilty about it (buying a designer bag) because it's like an investment."

Customers can trade in their bags and take to the streets with a new one as often as they like, while those lucky enough to make it onto waiting lists for limited-edition bags can sell them straight to a second-hand store for a profit.

A waiting list is common for a truly coveted bag, with a wait of several months currently the norm for Mulberry's Alexa bag.

The ultimate bag of desire remains the Hermes Birkin, which famously takes 18 hours to make by hand. The crocodile skin version uses the finest sections of hide from four crocodiles.

It costs from $9,000 to an astounding $160,000 for one of the top diamond-studded models, a Hermes spokeswoman told AFP.

Chinese women appeared immune to the "luxury shame" that affected females in other parts of the world during the global economic downturn, the consultancy Bain & Company said last year.

But while handbags are traditionally used to broadcast one's success and good fortune, this too may be changing as more and more women join the designer-toting club.

Lee herself has a denim Chanel bag, a gift from family -- but carries it "so that no one sees the double C (logo)", she said.

"People would know (who the designer was) already if they were really into Chanel, from the shape and so on, but I feel like there's no need to let the entire world know."

LOL trophies?