Recently, Louis Vuitton Moët Hennessy (LVMH) announced its financial report in H1 2018. The sales in Q2 as of June 30 increased significantly by 11%, while that of LVMH in H1 raised by 10% yoy to EURO 21.75 billion. Its net profits witnessed a sharp increase by 41% to EURO 3 billion, hitting the record.

Many industries have been impacted by the increasingly fierce trade war between the United States and China, so does the RMB exchange rate. “But for now, Chinese consumers’ desire for famous-brand products seems to have withstood the impact of the trade conflict to a large extent,” according to Reuters.

However, what is the reason for the persistence of people’s desire for luxury brands?

What Makes a Luxury Brand

On August 23, 2018, emlyon business school held its Alumni Gathering themed with “What Makes a Luxury Brand” in Campanile Hotel Jing’an, Shanghai. Particularly, Ms. Ella Bee, the Founder and Chief Designer of Ella Bee Studio who has over 20 year experience in marketing and branding, and alumni Iris Zhang (MSc Luxury, 2018) from the International Product Development Department of L’Oreal Group were invited to discuss the market development opportunities and challenges of luxury brands, and share their ideas, thoughts and stories about the luxury brands.

The following are excerpts from stories shared by the speakers.

Product Development in Beauty Industry

Iris Zhang

欧莱雅集团国际产品开发部

“As a product developer, there are various identities that I have. Such as beauty junky, trend follower, fake scientist, graphic designer, story teller and dream builder.”

What it is like to build a luxury brand

Iris, who works for the International Product Development Department of L’Oreal Group, analyzed each luxury brand has an ethos and a point of view, an identity and a purpose, which define and differentiate them in the marketplace. This is what people usually call as brand equity.

Understanding what product, formula or concept will excite the discerning consumer is part art, part science and part intuition — a sensibility that we have been developing for decades.

A complete and vivid brand can only be built with fixed brand equity, which is also the core for positioning, R&I and promotion of its products. For example, famous luxury brand La Mer is inspired from the power of the sea, an element that runs through all the links from brand positioning and product design to product packaging, ads design, as well as product contents selection.

Besides brand equity, finding the touching points for consumers and telling them a dream through product are also extremely important to enhance their understanding on products and enter into their hearts, thus effectively transferring the story to the customer’s lifestyle.

Changing the Dialogue: The New Voice of Luxury

Ella Bee

Founder and Chief Disigner of Ella Bee Jewerly Studio

Columnist and Author

Former VP Global Marketing, DFS Group

In this Internet era, the way people consumes, accesses to information and thinks has been dramatically evolved, raising great challenges for the luxury industry. Chinese consumer’s digital engagement leads globally in many respects. Data shows that the percentage of revenue from Alibaba users via mobile phone during peak sales season is 90% of its turnover, far higher than the percentage of 72% of Amazon in the United States. In China, about 70% consumers use social networks as a source of shopping inspiration, nearly 20% higher than that in the United States. Moreover, Key Opinion Leaders, known as Internet celebrities, earn much more than well-known Youtube users do.

Dramatic changes in consumption mode also impose strong influence on the brand promotion mode and market positioning. The promotion mode gradually transfers from the former celebrity endorsement and promotion by leading fashion magazine to vertical segment social media. KOLs and contents creators also drive social commerce. This, in turn, raises great challenge for the luxury industry. Traditional luxury brands are generally elegant and noble, thus it is especially crucial to partner with big stars and niche influencers for image transformation and positioning. It is a great challenge to choose proper social media. As we know, social media plays a very important role in boosting consumption. However, to positively promote the brand image and strengthen the marketing, brand promotion must be perfectly combined with social media promotion.

Ella gave the guests an example of MINI’s partnering with fashion blogger, i.e. launching a limited edition new car with Becky X MINI: a Caribbean Blue edition available for 100 lucky consumers only. It only takes 5 minutes that 100 Limited Edition Minis were sold out.

In the meantime, Ella also pointed out that wonderful use storytelling and innovative expression can drive efficient communication in this era of information explosion. To catch the eyes of consumers and stand out of competitors, we must keep the principle of brand communication in mind: insightful, creative and relevant!

Monthly Gathering of Shanghai Alumni

We will organize an exquisite alumni gathering with specified theme each month to serve as a bridge for alumnus and industry experts, strengthen the ties between alumnus, as well as alumnus and their schools , share resources, and promote their businesses in Asia.

Jessica Li

Senior Manager – Marketing and Communications

Tel: +8621-62608176

Email: yli@em-lyon.com