How to trade up China companies from manufacturing to enhanced design and branding? What are the future opportunities of global premium brands on the Chinese market? The 7th edition of Insight Shanghai addressed the challenge of premium brand strategies in China.
The event took place on September 25th and 26th 2014 in Shanghai with around 100 marketing and design professionals coming from leading Chinese and international companies such as Volvo, Chanel, Philips, Electrolux, AkzoNobel, Jala, Toyota, Bluemoon, Merck and a great panel of Chinese academics and experts in marketing and design.
The first day, Insight Shanghai speakers shared their views on Premium brands and premium trends from global and Chinese perspectives. Let’s share a few findings.
Premium trends: digital premium services and new artisan
Genevieve FLAVEN, CEO of Style-Vision explained that, from a global perspective, new premium opportunities often emerge from the disruption of traditional luxury codes. Take the notion of exclusive service. Today, as the digital industry is able to offer “white glove” service, this means the luxury shopping, personal drivers, concierge health service or tailored education are becoming increasingly digital and premium.
Another example of disruption is the concept of knowhow and handmade quality. With new technologies, industrial process can integrate more and more craftsmanship and personalization; as a result, mass produced goods such as technology devices or sport gear become perfectly executed artisan pieces.
Chinese crafts and icebreakers
Those global trends are also valid in China.
John FU, associate professor at Shanghai Jiao Tong University observes that the Chinese affluent consumers increasingly value low-key luxury with a distinctive Chinese cultural twist. Jade craftsmanship and jewelry will beneficiate from this new taste, he predicted.
Social networks are also an important area of premium innovation. Fu coined that the feeling of loneliness among the younger generation will create new opportunities for premium social services such as the Momo, a dating application for subway riders or Blued, another application dedicated to the daring Chinese gay scene.
Indeed, the itinerary of Lei ZHANG, founder of Pinwu Design reflects the growing awareness of young Chinese designers for their cultural heritage. Zhang learnt again the forgotten techniques of Chinese paper from Hangzhou umbrella craftsmen. He then applied this knowhow to modern furniture and created a multilayered paper chair.
The importance of consistency
The premium opportunity is definitively there, but how to handle this?
Gert Volker HILDEBRAND, chief designer at QOROS, an automobile company founded in 2007 by Israeli investors and Chinese car manufacturer Chery, particularly insisted in the importance of creating first a strong corporate identity and culture of design. This foundation provides then consistent guidelines for designers to design distinctive elements of the car and build the brand signature.
Professor Michel GUTSATZ, vice-President of Kedge Business School reported through interesting business cases that the impatience and the lack of brand management competencies often lead Chinese brands to failure. China have the necessary assets to create world class prestige brands but it takes time to shift from a manufacturing paradigm to a premium brand culture where the creation of value is mostly driven by immaterial elements.
The conference was followed the next day by a workshop day to let participants imagine new business applications based from trends. Among the ideas that were expressed, two projects were reflecting well the most important trends: a 360 application for solo travelers and a big digital screen inspired by Chinese folding screen to share experiences with distant friends. Through these examples, the participants of Insight Shanghai 2014 updated the notion of Premium as a combination of craft, technology and social interactions.
Geneviève Flaven is CEO of Style-Vision Asia, a trend agency based in Shanghai, China