Luxury Goods In Shopping Malls Suffer From "Super National Treatment" &Nbsp; Where Is The Way Out For Local Brands?

No rent, good location, low discount.

The 180 best street location on the first floor, the first time to enter 3~5 free rent, the subsidized shop decoration fee, the first batch of goods distribution fees, and even the monthly single store sales volume.

No one will be willing to do business at a loss.

On the back of international brand high quality courtesy, some domestic brands must accept high button points, poor location and high rents.

Many local brand executives appeal that the government, shopping malls and commercial blocks have the responsibility to provide more display space for local brands and "China creation", rather than the other way to subsidize international brands with high rent and high buckle points of domestic brands.

"High-end and internationalized": twisted baton

At 10 o'clock in the evening, the department stores in Shanghai have been closed.

Shanghai's three fashionable landmarks: Lujiazui, Nanjing West Road and Huaihailu Road. Only the world's top brands GUCCI, HERMES (Hermes), and LV's neon lights are still bright.

In recent years, China's second tier cities have been competing for extremely preferential "super national treatment" when introducing international brands.

Industry observers believe that the practice of introducing low profile international brands into the Hangzhou Tower started at the Hangzhou Tower.

At the end of 2004, Hangzhou Tower was redecorated and unveiled. In order to highlight its new positioning of "quality and internationalization", the world famous brand LV bags were attracted by the favorable conditions of rent free for 3 years and the provision of decoration fees.

The sales volume of LV Hangzhou Tower was 25 million yuan on that day.

At the same time, LV has also led more than a dozen world-renowned brands such as GUCCI and PRADA to enter.

Insiders call this phenomenon "Hangzhou Tower mode".

The demonstration effect spread rapidly in the industry.

Tianjin Friendship Shopping Center, Shenyang Zhuo exhibition shopping center and Beijing, Shanghai's major business circles follow suit: rent free for 3 or even 5 years, generously subsidize tens of thousands of yuan store decoration fees, or even substitute pads.

According to industry sources, in order to attract LV to enter Tianjin, the friendship store in Tianjin has promised a single store sales volume. For this reason, merchants and employees who mobilized the shopping mall have been mobilized to buy LV bags to fulfill the promised sales volume.

The first tier cities are competing for the first tier brands.

According to insiders, excluding the shops rent free, Beijing Lotte Yintai Department subsidized the renovation and pformation of the international brand cost reached more than 200 million yuan.

From Shanghai's Huaihailu Road to Chongqing's Monument for Liberation, from Tianjin's friendship mansion to Hangzhou's lakeside Xintiandi, "high-end" and "internationalization" seem to be the only theme of location, upgrading and pformation of commercial streets and shopping malls.

And local governments directly or indirectly encourage shopping centres to "pfusions" for international brands in terms of garrison rights, taxes and subsidies.

Take Chengdu as an example, in 2010, the Chengdu Municipal Bureau of Commerce formulated the goal of "introducing 20 famous international brands and enterprises every year, and reaching 80% of the western international brands in 2015". At the same time, it issued a reward mechanism for international famous brand suppliers, operators, agents and promoters.

The enthusiasm of the Chinese market in the financial crisis raged, gave these international brands in their own countries and other parts of the world can not enjoy the honor, the result is: in just two years, LV in Taiyuan, Wenzhou and other more than 20 cities opened more than 30 stores.

GUCCI only in Beijing Wangfujing's goldfish pond alley, that is Lotte Yintai, Jin Bao Hui and The Peninsula Hotel 3 counters.

Statistics show that by the end of December 2009, about 226 retailers in 44 cities in China had given their prominent positions to fashion luxury brands.

Correspondingly, Chinese enterprises such as Shanghai Jahwa were invited out of Nanjing West Road, Shanghai and other high-end business district.

Zhang Zhifeng, the chairman of the domestic luxury brand Ne Tiger Fashion Company, strongly disagrees with the "Chongyang" phenomenon. He told the reporter: "foreign brands have been developing for 50 years, 100 years or even 200 years.

Because of this, (domestic local governments and shopping malls, business circles) should give the Chinese brand at the initial stage a supportive and fair competition environment rather than discrimination. "

Opportunities for domestic brands to pay tuition fees

The concept of brand value is deeply rooted in the hearts of the people. It has only begun in recent 30 years in China.

Domestic brands that are already deficient in their products will still suffer from unfair treatment when they compete with international brands at home. They will make the development of domestic brands, especially fashion brands worse and worse, and fall into a vicious circle.

As a market entity with almost complete autonomy, shopping malls make some choices.

Ms. Du, manager of Investment Department of Beijing Yintai Center, told reporters that when they introduced brands, they would take into account market positioning, brand appeal, brand acceptance, product line richness, operation team experience and development potential.

When a store chooses a brand, it means giving up other brands that do not match its positioning.

For example, when Hermes is stationed in shopping malls, it is necessary to choose neighbors instead of having a "relatively low" brand next to Hermes.

Some classic top brands with 100 years of operation experience will have strict and standardized requirements in the walls, lighting and even the language and appearance of the attendants in addition to their strong financial strength.

In the marketplace, these can ensure their taste and positioning.

Zhou Liang, executive director of Ying Shi asset, a professional Asset Management Co in Shanghai FM Yi, Fang Hui square, Yueda 889 square and Yucheng fashion shopping center, has successfully divided the main store and the second power store when they invest in shopping malls.

When the mall is located, it may not pay the brand of the main store. It may pay a relatively high rent. However, the "main store" and "sub store" will not be divided according to the nationality of the brand. It is not objective to enlarge the phenomenon with nationality.

So, what is the reason that makes shopping malls willing to do business that seems to be losing money? Liao Chengyi, director of marketing of Shanghai Zhuo Yue Department Store Development Co., Ltd., which is the agent of many international brand marketing businesses, told reporters that apart from the above shopping mall's image and positioning considerations, shopping mall's introduction of internationally famous brands is beyond the brand itself, because they can bring about real spillover economic benefits.

What kind of brand the mall introduces is what kind of company it will be able to attract to enter office buildings.

The development of commercial real estate is the aspiration of shopping centres to introduce brands.

On the other hand, there are big international brands on the first floor, and the two or three storefront can get higher rents.

The competitive shopping malls with the aim of maximizing comprehensive interests are "business in business". However, when this mode of thinking is in flood, the development space of domestic brands is undoubtedly squeezed.

In June 2010, at the fifth "China Luxury Summit", this phenomenon was attacked by some people in the industry.

The latter believes that the domestic business environment gives too many opportunities for international luxury goods to enter the shopping mall. In order to introduce a few large brands, the mall is willing to "bleed" and "cut meat", resulting in a few large brands entering the shopping mall at a very low cost or even without risk. Other brands are forced to pay a higher price for shopping in the mall. On the other hand, the space of other excellent domestic brands entering the shopping mall is strangled.

Shao Longtu, the designer of Haibao, World Expo mascot in Shanghai, seems to have some rationality in the choice of shopping malls, but it is undeniable that there is a tendency to get on with the trend.

He once saw in foreign counters that the BOSS suits that were priced at tens of thousands of dollars in the country only appeared in the general shopping malls in France, but the price was only about 4000 yuan.

Blindly displaying the international brand is a lack of confidence.

Such a "internationalization" taste and understanding, in fact, has been "OUT".

Han Jianhui, director of the China Commercial Street Working Committee, said it was time to reassess the definition of "internationalization".

In his view, there should be two understandings of Internationalization: one is to show the world's top brands to China, to display the world in China, and the other to show the local, Chinese and national things to attract people from all over the world and to show the world to China.

And narrow understanding of internationalization can only result in "thousands of streets, thousands of cities, thousands of stores."

So, how are Japan, South Korea and Japan leading the fashion, daily chemical and consumer electronics industries? Zhou Chengjian, chairman of Metersbonwe, told the newspaper that over 70% of the main commercial streets in Japan and Korea were independent brands.

International first-line brands have to pay very high discount points in shopping malls in Korea, Japan, Russia, Singapore and other countries.

It is reasonable to believe that the above practices in domestic shopping malls are largely due to the direct or indirect guidance and encouragement of local governments.

This reporter learned that, Shanghai Jahwa's high-end cosmetics "double sister" settled in the Bund the Peace Hotel is not smooth, had encountered resistance from the district government officials, Shanghai Jahwa chairman Ge Wenyao multilateral mediation to succeed.

Also in the Bund, YOUNGOR has a similar experience.

In June 2010, the media reported that three major business circles in Chongqing scrambled for luxury goods. Some local governments even rewarded millions, only to introduce LV, GUCCI and other international brands.

While emphasizing the pformation of the economic structure, China's subsidy and encouragement for independent innovation are very small, showing that the heavy industries such as automobiles and ships are very obvious.

However, in the daily chemical industry and the clothing industry, not only are the subsidies rare, but also four foreign acquisitions and mergers, and the competitive environment is bad.

Zhou Chengjian said that subsidies and incentives could not be extravagant, but hoped that governments at all levels could give a fair competition environment and treat each other equally, "giving domestic brands an opportunity to pay tuition fees."

The opposite: everything is time to solve.

Zhou Liang, executive director of Ying Shi asset, believes that the "Chongyang" mentality of shopping malls should be treated with a tolerant attitude.

In the past hundred years, western countries have been leading fashions and trends, and this situation can not be changed at one thirty.

The fashion industry is not the focus of the national economic strategy, and China's current fashion market is only twenty or thirty years old. It is entirely understandable to catch up with western countries in a short time.

Many national brand managers also hold such views.

Chen Zhigao, general manager of YOUNGOR East China, believes that China's pformation from an agricultural society to an industrial society and from industrial society to the information society is not long. In the clothing industry, the mentality of pragmatism has not yet been removed. Fashion has long overturned the traditional concept of durability and has been given more connotations and added value.

An obvious example is China's leap brand sneakers.

The sport shoes, which only cost 20 yuan a pair in China, have been used for decades.

And several French designers, relying on the simple fashion concept, pformed into "Chinese style" leaps, but entered the fashion store in Paris. The price changed to 50 euros.

The eye-catching performance of French designers seems to have failed to touch the producers here.

This reporter learned that the government support of the leap shoes and many of the hand painted jump shoes designed by Shanghai designer Hu Shaoming and others have won valuable exhibition opportunities in World Expo, but their mass production and sales have not been realized until now.

Shao Longtu told our reporter that the great brand came from the great designer, and the items were different, not good or bad. "Even if the leather is made of artificial leather, the LV package can also sell the sky price, which is the value of design and brand."

Chinese enterprises lack the long-term design input plan, "design around the product pfer, the program around the boss."

Hope: changes in young people's consumption concept

Shopping malls are taking their own way of luxury, and consumer changes are quietly taking place.

Liao Chengyi, who has been in the fashion industry for a long time, has found that the ZARA and H&M Street fast fashion stores are booming in China. This shows that consumers, especially the "70 after" and "post-80s" consumers, have begun to shift their attention to the first line brands, turning to styles, comfort, so-called "big brand children" and affordable prices.

Liao Chengyi believes that comfort and casual will become the consumption concept of Chinese young people.

Shao Longtu holds the same view.

He believes that after the "post-80s" in the more prosperous times, especially after the "85 after" became the main force of consumption, the Chinese local fashion industry will see hope, because these young people are more confident than their parents.

This confidence is projected in the consumption field, which will make its consumption concept more rational and pragmatic.

More and more posts such as "many domestic products are very good, but we are not rare" have been posted and reprinted in major fashion forums to remind people that the quality of many domestic fashion brands is actually not inferior to Yu Yang brand.

Zhou Liang, executive director of Ying Shi asset, who has rich experience in shopping malls, sees that many domestic fashion brands such as the seven wolves, Jin Ba, ASOBIO and Ou Shi Li are on the rise.

Liu Feiguo, vice president of e-business, a local business consulting and operation institution, is optimistic that in any case, there are "twin sisters" of Shanghai Jahwa in the Peace Hotel, while Tianjin's seagull watches have also appeared in Xintiandi. These profound local brands are changing their thinking and learning the marketing methods and operation methods of international brands.

He believes that domestic brands will be favored by more and more high-end stores.