ID :
188042
Mon, 06/13/2011 - 08:05
Auther :
Shortlink :
https://oananews.org//node/188042
The shortlink copeid
MCM enters competition to lure China's new rich
(Yonhap Feature)
By Kim Young-gyo
HONG KONG, June 13 (Yonhap) -- Queen's Road Central, located at the heart of Hong Kong's Central district, is an atrium of the world's top fashion brands such as Louis Vuitton, Channel, Coach, Gucci and Hermes, to name a few.
Lately, another world-class designer brand MCM, owned by a South Korean female entrepreneur, has opened its flagship shop there, part of its move to expand its foothold in China, which is expected to become the world's biggest consumer of luxury brands in the coming decade.
"China is an emerging market, which presents enormous opportunities for luxury brands," Kim Sung-joo, chairwoman and chief executive officer of MCM Holdings AG., told a group of reporters in a recent interview.
On any day, it is not difficult to see tourists from mainland China lining up in droves to get into one of those shops on Queen's Road Central to buy luxury goods -- handbags, shoes, garment, accessories, umbrellas and luggage.
According to a recent study by consulting firm Bain & Company, more than half of all luxury-goods purchased by Chinese in 2009, or US$13 billion, were made outside of China. And half of those purchases were made in Hong Kong and Macau.
Founded in 1976 in Munich, Germany, MCM, which stands for Modern Creation Munich, established itself as a glamorous fashion line in the 1980s and 1990s with its fine craftsmanship in leather bags. However, unable to keep up with the changing economic landscape of the late 1990s, the company faltered, and the brand took a deep plunge.
Internationally known and respected for her achievements in business, Kim saw it as a golden opportunity to broaden her business worldwide and acquired MCM in 2005. She is the founder of Sungjoo Group, consisting of Sungjoo International Ltd., Sungjoo Merchandising Inc., and Sungjoo Design Tech and Distribution.
"I was determined to acquire the MCM brand, as I thought it has much potential with its combination of tradition and handmade artistry," she recalled.
Kim, who was then a South Korean licensee of the German luxury brand, bought a 100 percent-stake in it for an undisclosed amount and started a global relaunch. She has since tripled the company's annual sales and increased the number of its retail shops to 150 in more than 40 countries.
"The brand's classic design does not go out of date," the chairwoman said. "However, we realize that the luxury market is growing more and more competitive. We will continue to add new design elements, letting the MCM brand evolve through its unique creative imagination."
The Chinese version of Elle, a worldwide magazine of French origin that focuses on women's fashion, has recently run an article titled, "MCM's return to the mainstream of the leather goods."
According to the article, French actress Catherine Deneuve, late British Princess Diana and Michael Jackson were among the satisfied customers of the MCM.
"The greatest feature of MCM is that its products are purely handmade with leather, manifesting workmanship," it said.
MCM Holdings has already started to unveil its ambitious moves targeting the Chinese customers. Last year, it launched a creative collaboration with world-renowned contemporary artist Craig Redman from Australia, called "Shanghai Collection."
Inspired by the dynamics of Shanghai as a port city, Redman demonstrated vibrantly colored rope designs on the collection of 17 leather products, according to MCM officials.
In April, the company opened a new store in Shin Kong Place, an upscale department store in Beijing.
MCM Holdings plans to increase the number of its stores in China, Hong Kong and Macau, to 30 by the first half of 2011 and 100 by 2015 from the current nine with the aim of increasing its overall China sales to between 400 to 500 billion won (US$370 million). The company did not reveal its current revenue from China.
"In addition to the first-tier cities, such as Beijing and Shanghai, we have to pay attention to the rapidly growing second and third-tier cities in China," Kim said. "To win or lose in China's luxury market will be decided by whether you have won over those smaller cities."
Kim said she firmly believes that MCM has a competitive advantage against other luxury houses.
"MCM is headquartered in Seoul and has 80 to 90 stores in South Korea. We can be more flexible when it comes to delivering products to the Chinese consumers," she said. "We better understand how Asian consumers think compared to Europe-based firms."
Hong Kong-based investment bank CLSA Asia-Pacific Markets said in a February report that Chinese consumers will buy 44 percent of luxury goods sold in the world by 2020, up from 15 percent in 2010.
The report, titled Dipped in Gold, said that rising personal income, social aspirations and more stores will be the main drivers that will significantly boost luxury consumption in the country.
Shanghai-based publisher Hunan Report Inc., which tracks China's wealthy population, said in a report in April that one out of 1,400 Chinese is estimated to be a millionaire, suggesting that China's robust economic growth has boosted the number of rich people in the country.
The number of millionaires in China reached 960,000 as of the end of 2010, up 9.7 percent from a year earlier, according to Hunan's 2011 Wealth Report.
ygkim@yna.co.kr
By Kim Young-gyo
HONG KONG, June 13 (Yonhap) -- Queen's Road Central, located at the heart of Hong Kong's Central district, is an atrium of the world's top fashion brands such as Louis Vuitton, Channel, Coach, Gucci and Hermes, to name a few.
Lately, another world-class designer brand MCM, owned by a South Korean female entrepreneur, has opened its flagship shop there, part of its move to expand its foothold in China, which is expected to become the world's biggest consumer of luxury brands in the coming decade.
"China is an emerging market, which presents enormous opportunities for luxury brands," Kim Sung-joo, chairwoman and chief executive officer of MCM Holdings AG., told a group of reporters in a recent interview.
On any day, it is not difficult to see tourists from mainland China lining up in droves to get into one of those shops on Queen's Road Central to buy luxury goods -- handbags, shoes, garment, accessories, umbrellas and luggage.
According to a recent study by consulting firm Bain & Company, more than half of all luxury-goods purchased by Chinese in 2009, or US$13 billion, were made outside of China. And half of those purchases were made in Hong Kong and Macau.
Founded in 1976 in Munich, Germany, MCM, which stands for Modern Creation Munich, established itself as a glamorous fashion line in the 1980s and 1990s with its fine craftsmanship in leather bags. However, unable to keep up with the changing economic landscape of the late 1990s, the company faltered, and the brand took a deep plunge.
Internationally known and respected for her achievements in business, Kim saw it as a golden opportunity to broaden her business worldwide and acquired MCM in 2005. She is the founder of Sungjoo Group, consisting of Sungjoo International Ltd., Sungjoo Merchandising Inc., and Sungjoo Design Tech and Distribution.
"I was determined to acquire the MCM brand, as I thought it has much potential with its combination of tradition and handmade artistry," she recalled.
Kim, who was then a South Korean licensee of the German luxury brand, bought a 100 percent-stake in it for an undisclosed amount and started a global relaunch. She has since tripled the company's annual sales and increased the number of its retail shops to 150 in more than 40 countries.
"The brand's classic design does not go out of date," the chairwoman said. "However, we realize that the luxury market is growing more and more competitive. We will continue to add new design elements, letting the MCM brand evolve through its unique creative imagination."
The Chinese version of Elle, a worldwide magazine of French origin that focuses on women's fashion, has recently run an article titled, "MCM's return to the mainstream of the leather goods."
According to the article, French actress Catherine Deneuve, late British Princess Diana and Michael Jackson were among the satisfied customers of the MCM.
"The greatest feature of MCM is that its products are purely handmade with leather, manifesting workmanship," it said.
MCM Holdings has already started to unveil its ambitious moves targeting the Chinese customers. Last year, it launched a creative collaboration with world-renowned contemporary artist Craig Redman from Australia, called "Shanghai Collection."
Inspired by the dynamics of Shanghai as a port city, Redman demonstrated vibrantly colored rope designs on the collection of 17 leather products, according to MCM officials.
In April, the company opened a new store in Shin Kong Place, an upscale department store in Beijing.
MCM Holdings plans to increase the number of its stores in China, Hong Kong and Macau, to 30 by the first half of 2011 and 100 by 2015 from the current nine with the aim of increasing its overall China sales to between 400 to 500 billion won (US$370 million). The company did not reveal its current revenue from China.
"In addition to the first-tier cities, such as Beijing and Shanghai, we have to pay attention to the rapidly growing second and third-tier cities in China," Kim said. "To win or lose in China's luxury market will be decided by whether you have won over those smaller cities."
Kim said she firmly believes that MCM has a competitive advantage against other luxury houses.
"MCM is headquartered in Seoul and has 80 to 90 stores in South Korea. We can be more flexible when it comes to delivering products to the Chinese consumers," she said. "We better understand how Asian consumers think compared to Europe-based firms."
Hong Kong-based investment bank CLSA Asia-Pacific Markets said in a February report that Chinese consumers will buy 44 percent of luxury goods sold in the world by 2020, up from 15 percent in 2010.
The report, titled Dipped in Gold, said that rising personal income, social aspirations and more stores will be the main drivers that will significantly boost luxury consumption in the country.
Shanghai-based publisher Hunan Report Inc., which tracks China's wealthy population, said in a report in April that one out of 1,400 Chinese is estimated to be a millionaire, suggesting that China's robust economic growth has boosted the number of rich people in the country.
The number of millionaires in China reached 960,000 as of the end of 2010, up 9.7 percent from a year earlier, according to Hunan's 2011 Wealth Report.
ygkim@yna.co.kr
