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The rise of China's domestic goods

(People's Daily Online)    09:15, January 20, 2014
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2013: domestic goods emerge

2014: enhance domestic strength

It is an awkward fact that domestic luxury goods do not sell well in China. How many Chinese brands can seize the opportunities presented by 2014?

According to the Fortune Character List 2013, ten Chinese brands - Maotai, Tongrentang, Chunghwa Cigarette, Wuliangye, Shanghai Tang, Exception, Jicao, Seagull Watch, Shang Xia, and Zhuyeqing Tea - are most likely to become the first domestic luxury brands.

Zhou Ting, head of Fortune Character Institute, points out the three factors that hamper the development of China's domestic luxury goods in the international arena: a submissive attitude to foreign luxury brands; foreign luxury brands' occupation of the best stores and locations at low costs; limited promotion channels because foreign luxury brands monopolize the key advertising displays in various media at low prices, while Chinese brands have to pay much more if they want to have the same kind of promotion.

It is satisfying that some domestic goods have penetrated the international arena in 2013, such as Powerland and Zhuyeqing Tea.

However, many analysts hold the view that an overall rise of domestic luxury goods will come.

Michel Gutsatz, Associate Dean of Kedge Business School in Marseille, France, is an expert in luxury brand management and brand strategy. He points out that Chinese companies need to meet "6 + 1" requirements to build their own luxury brands. The first six requirements are cultural background, technology, quality, talent, creativity, and design. In China, these six requirements can be met without too much difficulty. However, the "+1" - the ability to understand and build brands - is not so straightforward.

Zhou Ting, head of Fortune Character Institute, says that Chinese brands need to enhance their domestic strength before succeeding in the luxury market. Chinese enterprises need to have professional talent in relevant fields including design, management, and marketing; at the same time they need to learn management skills from foreign luxury brands. In addition, government should provide preferential policies to push domestic brands to "go global".

Chen Rui, a partner with Adfaith Management Consulting, says that on the one hand, the formation of one or two leading culture-based luxury brands may create a good environment to promote the upgrading of China's manufacturing and enhance cultural recognition. On the other hand, "Acquisition may be a better way to achieve the goal."

(Editor:DuMingming、Yao Chun)

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