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India, China Seen as Fertile Ground for Own Luxury Brands

Bruce Stanley / 5 November 2009

DUBAI — For generations, even centuries, luxury brands from France, Italy and Switzerland have served as a global benchmark for excellence in workmanship and design.

But Europe’s creative heartland for top-end jewellery, watches and fashion could, in as little as 20 years, face a stiff competitive challenge from India, China and other developing countries, executives in the luxury industry say.

These potential non-European rivals can draw on an abundance of skilled workers and quality materials and a vast base of domestic consumers with a growing taste for luxury goods. While the global center of gravity for luxury brands still rests firmly in Europe, many of the items themselves are already being produced in China and other far-flung corners of the globalized economy.

An eventual transition from this outsourcing of production to the emergence of indigenous Chinese and Indian luxury brands seems only a matter of time, especially as fewer Europeans want to earn a living as jewellers and artisans in other traditional trades, these executives told Khaleej Times.

“We can not believe we can sit on our reputation forever,” said Christian Blanckaert, a former executive vice president of Hermes International. “I believe these countries can come on and bite our knees. We should be scared of that.”

Blanckaert spoke on the sidelines of the Leaders in Luxury conference that ends today in Dubai. He believes that India and Taiwan will lead the charge against the established brands of Western Europe.

“India has such a culture of luxury and of textiles,” he said, describing that country as “a source of inspiration.” Taiwan, meanwhile, has highly skilled workers and experience in producing premium merchandise, said Blanckaert, who works now as a consultant in the luxury goods industry.

He estimates that both India and Taiwan will become international suppliers of luxury products within the next 20 years.

Eva Jeanbart-Lorenzotti, chief executive officer of Vivre, an online luxury goods company based in New York City, foresees that India, China and Brazil will emerge as powerhouses in the industry.

“Could these countries create luxurious product? Yes,” she said, noting that each of the three nations boasts a strong artistic and creative heritage.

“I think India, for sure. There are two things (Indians) do extremely well. One of them is jewellery, and I’ll tell you why. They’ve got a point of view, great (precious) stones and great workmanship,” Jeanbart-Lorenzotti said.

Moreover, India’s “micro” scale of artisanal production suits it well for the design and manufacture of deluxe consumer products, she said.

“China’s going to get there. I don’t know when. I don’t know how. But they will… They’re going to ‘perfectionize’ it” — and on a large scale, she said.

Another up-and-comer is polyglot Brazil, with its multitude of cultural traditions that have inspired its designers. “There are some really amazing things coming out of Brazil,” Jeanbart-Lorenzotti said. The Swiss-born executive believes that Brazil could become a major source of luxury goods even before China does.

Qeelin, a maker of China-inspired jewellery, is in a unique position to test these forecasts. Founded six years ago, the firm melds French workmanship with motifs lifted from Chinese folklore.

Qeelin makes pendants, earrings and other items using black jade that is cut in China and assembled by a French-run workshop in Hong Kong, said Guillaume Brochard, its co-founder and chief executive officer. These items, including its signature diamond-encrusted “bobo” bears, are selling well in Europe and Japan; Qeelin counts actress Kate Winslett and singer Celine Dion among its celebrity clients.  

The firm has a boutique in Beijing and plans to open another in Shanghai, and Brochard expects that China one day will comprise its biggest market. But for now, he believes that Chinese customers would be reluctant to buy from Qeelin if it actually produced its jewellery in China.

“Ten years ago, ‘Made in China’ was not very sexy,” he told Khaleej Times. “Even though our jewellery is not made in China, we had to face this challenge. Surprisingly, in the Western world, this was not an issue.”

But for most Chinese, who prize established — and therefore, Western — brands, it was a problem. “In China, whatever is local is not luxury,” Brochard said. As a result, Qeelin highlights the French aspect of its Franco-Chinese nature when marketing to Chinese.

As for China’s long-term potential as a producer of luxury goods, he’s a believer.

“The Chinese are catching up, and in some fields they are getting better than the Europeans.”

    bruce@khaleejtimes.com

 
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