BAROMETER PROMISE – BNP EXANE « EXCLUSIVITY & DESIRABILITY » 2015:
THE WEALTHIEST CHINESE WOMEN RANK LUXURY BRANDS
Extract of the Survey Report « Exclusivity & Desirability – China 2015 » conducted by Promise Consuiting – BNP Exane – Interview of the wealthiest chinese women about the luxury brands in fashion universe.
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Paris, November 3rd, 2015 10:00 AM – Promise Consulting, an acknowledged consulting and market research firm, joins forces with BNP Exane, a key actor of the financial market in Europe and a specialist in research and analyses on the European luxury sector, to publish the 2nd wave of the Promise – BNP Exane Barometer « Exclusivity & Desirability 2015 ». This barometer classifies the 15 most exclusive and desirable brands in China in the universe of feminine Fashion. This Barometer is conducted amongst the wealthiest Chinese women, and is about the 30 luxury brands in ready-to-wear/handbags/shoes/accessories that have invested the most in communication (source: Industry Interviews, Exane Paribas). Promise and BNP Exane already conducted the same survey amongst French women in May 2015 (http://bit.ly/1ESTZGu).
”This barometer in association with BNP Exane reflects our determination to move closer to the marketing and cross-section financial analysis. Our Monitoring Brand Assets® approach itself features very complementary analyzes with those conducted by BNP Exane’s experts. Hence, the obtained results from our joined barometer are based on two different angles of expertise, marketing and financial, which brings a unique added value to the managers and decision-makers in the Luxury sector. More concretely, our measure of the exclusivity of a brand takes into account the upper and more constant quality of products, the strong and unique valuation of the customer, the brand’s prestige, but also a matchless “savoir-faire” that justifies a very high price premium associated with top luxury. Finally, our measure of desirability synthesizes the dimensions of attractiveness of an intimate, social and symbolic nature, which are the strengths of exclusive brands, and characterize the particular relation that they maintain with their customers. In this respect, our Barometer synthesizes, in two proven scales, the numerous criteria to establish a ranking between the high-end brands from their customer’s point of view« , states Pr. Philippe Jourdan, Promise’s CEO.
HIGH LUXURY / EXCLUSIVITY
- Hermes, 1st brand on the luxury / exclusivity criterion amongst the wealthiest Chinese women.
- Respectively 2nd and 3rd, Louis Vuitton and Chanel are neck to neck.
- Respectively 4th and 5th, Prada and Dior complete the ranking of the 5 most exclusive brands.
- Chanel is the most desirable Fashion brand in China.
- Ranked 2nd, Hermes capitalizes on its strong association with high luxury.
- Prada, Louis Vuitton and Dior are neck and neck and complete the top 5.
- Burberry is the 6th most desirable brand (ranked 9th on exclusivity).
EXCLUSIVITY: THE MAIN FRENCH HOUSES DOMINATE WITH ONE EXCEPTION
[EXTRACT]- Considering the strong uncertainties of the Chinese economy – 2015 was marked by a slowdown of the Chinese growth, a strengthened battle against corruption, a crash on the Chinese stock market and a devaluation of the Yuan; all those elements have engendered concerns on the luxury sector – it is very reassuring to pinpoint that the upper French luxury brands, besides Prada, have a clear advance on our recent “Exclusivity and Desirability” Barometer.
For the wealthiest Chinese customers, upper luxury is above all incarnated by Hermes, whose market positioning, devoted to social elite in leather goods (handbags and shoes) as exclusive in ready-to-wear, comforts its high-end luxury image. The brand is ranked first, its index equaling 162 (100: the average of the 15 first top brands), and capitalizes on a comfortable advance vs. Louis Vuitton (145) and Chanel (144) – those 2 brands being neck and neck (cf. graph 1).
DESIRABILITY: THE 5 MOST EXCLUSIVE BRANDS ARE ALSO THE MOST DESIRABLE ONES
[EXTRACT]- “Luxury and love, respond to the same logic. A luxury brand has to arouse the desire, which inevitably calls for a sometimes long waiting for the long desired object. If the outcome of a loving quest sometimes kills the desire, a luxury brand, by permanently reinventing itself, creates the mechanisms to preserve the desire. It seemed important to us to measure the desirability of 15 big luxury brands stemming from our Barometer, especially as our model Monitoring Brand Assets® demonstrates that the desirability, as we measure it, is the main lever for growth of high-end brands in China and in the world. We bring our customers the key to make their brands more desirable because we are convinced that desirability is the stake for tomorrow’s big luxury brands.” (Philippe Jourdan)
Desire contributes to acknowledgment towards the other. Hence, the dimensions of the desire belong to the intimacy (the relation with the other). Therefore, desirability is based on a subtle balance that the brands must feed respecting their fundamentals. « What we want to measure through desirability is a proximity, which implies the physique but also the mystic between the brand and its public, a carnal and spiritual fusion fed by the products, the services, the image, the values and the kind of relations that the brand builds with its public », says Philippe Jourdan.
Some of the analysts of the luxury sector suggested the idea that China was now orienting itself towards more accessible luxury brands that are less exclusive, and that the emergence of the upper middle class would inevitably engender the “democratization” of luxury, which would represent a development opportunity for “second-ranked” brands (Fendi, Loewe, Celine, etc.). This must be nuanced: though the luxury brands’ ostentatious role is temporarily setback, due to the fight against corruption conducted by the Chinese authorities, and though the identity function is less pronounced than before, the distinctive (i.e. rarity) and affective (i.e. sensorial and emotional needs) sides that characterize luxury brands still dominate in China: the 5 most exclusive brands are also the most desirable ones.
 The strength of the main brands precisely consists in preserving that balance between the elitist clients’ strong expectations and a willingly assumed positioning, that also aims to be visionary and therefore sometimes offbeat. Taking into account the dynamic of the strengths and tensions in the value of a brand, the Monitoring Brand Assets© approach justifies its pertinence.
EXCLUSIVITY & DESIRABILITY: HIGH LUXURY BRANDS HAVE FOUND THE PERFECT BALANCE
[EXTRACT]- Managing a luxury brand implies a subtle balance between a necessary brand’s exclusivity and a sufficient desirability threshold. Too much exclusivity penalizes desirability: in that case, the brand positions itself on a too narrow “niche”. On the opposite, by becoming too desirable, the brand penalizes itself on exclusivity: in that case, the brand is too much broadcasted, becoming too visible or too accessible. Exclusivity is the guarantee of high margins, while desirability ensures sufficient volumes.
In China, there are two distinct sets of brands:
- High-end luxury brands (Hermes, Chanel, Louis Vuitton, Prada and Dior) (…)
- The more « premium » luxury brands (Versace, Bottega Veneta, Roberto Cavalli, Burberry, Ferragamo, Ralph Lauren), surprisingly together with Lanvin and Armani (…)
The PROMISE – BNP EXANE « EXCLUSIVITY AND DESIRABILITY » Barometer has an international vocation, is renewed every year in several countries and on several categories of products. Both criteria that are measured here are precious tools to help managers and investors of the luxury sector evaluate and take decisions. These two criteria arise from the more general model of measurement of the brand’s performance and ROI, Monitoring Brand Assets®, marketed by Promise for numerous brands in the sectors of the Fashion, Beauty and Selective Distribution.
- Collection method: online Access Panel.
- Period of data collection: September 2015.
- Country: China
- Universe: luxury (ready-to-wear, handbags and shoes).
- Sample: 600 adult women (18-54 years old) who belong to the 3% wealthiest households
- Theme: barometer « Luxury and Desirability » 2015.
- List: 30 evaluated brands (available on request).
- Measured criteria: exclusivity and desirability of the luxury women fashion brands.
ABOUT PROMISE CONSULTING
Promise is a group specialized in consulting and marketing surveys. It consists in the following companies: Promise Consulting Inc., JPL Consulting and Panel On The Web. Promise’s consulting and survey services provide a strong added value. The group has created an innovative methodology to measure the performance of brands and the ROI centered on brand: Monitoring Brand Assets®. This methodology has been deployed in 50 countries for now, studying 250 brands in various sectors and collecting almost 1.000.000 questionnaires online.
Based in Paris, New York and Casablanca, the group conducts surveys and provides consulting services all over the world. Promise has successfully developed innovative methods and models that have been rewarded 7 times in 10 years by the profession, both in France and abroad. The group is consulted by the major groups in luxury, cosmetics and selective distribution to help them develop their brands on the domestic and overseas markets. Promise operates in numerous business sectors, each time the brands establish a strategy for growth to better understand their market, communicate with their consumers, seduce their customers and improve their loyalty.
Promise’s CEO, Philippe Jourdan, is the chief-editor of the Adetem’s review, the French Marketing Review (RFM) since 2011. He publishes in academic international magazines on issues related to brand equity in universes of luxury, beauty and selective retailing. He also publishes in the economic and news press (Le Monde, Les Echos, Le Figaro, l’Opinion, La Revue des Marques, etc.). Philippe is also an associate professor, researcher at the IRG (CNRS) and was awarded for the best Research Paper, AFM in 2000.
ABOUT BNP EXANE
Specializing in European equities, BNP Exane is active in three businesses:
- Cash equities: under the brand name Exane BNP Paribas, Exane provides institutional investors with a range of services, such as research sales and execution on European equities;
- Equity derivatives: Exane derivatives has built a robust structured products franchise, based on its longstanding leadership in European convertible bonds and options;
- Asset management: Exane Asset Management is one of the leaders in long/short equity fund management in Europe.
Exane works primarily with institutional clients worldwide (pension funds, fund managers for banks and insurers and hedge fund) and markets its derivative products to a broader pool of clients comprising private asset managers and investment advisors. Exane has a workforce of over 800 employees operating from offices in Paris, London, Frankfurt, Geneva, Madrid, Milan, New York, Stockholm and Singapore. Exane BNP Paribas equity research team covers c. 600 big companies. Their research receives regular acclaim in leading industry surveys. For further information: http://www.exane.com.
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