Getting Down to the Business of Luxury
Monday, 4 April 2011
The expansion of the middle class in countries like China and India has allowed the luxury goods market to significantly expand. The Chinese market was heralded a saviour of premium brands while much of the world was gripped by the GFC and in January 2011, Reuters predicted that China will become the world's biggest market for luxury goods within five to seven years.
In the West, appetites for luxury goods seems to be strong with the new term "gourmet-ification" describing consumers' increasing demand, and willingness to pay, for higher quality product and exclusivity in everything from bread to liquor. However, premium brands did not escape the GFC unscathed. In November 2010,
Knowledge@ASB reported an 8% drop in the sector according to Global consultancy firm, Bain & Company. Watchmaker Rolex, along with many high-end jewellery makers, saw its overall brand fall by 14% while Parisian fashion house Chanel lost 11% in brand value.
Porsche Cars Australia is one ultra-brand that came through the crisis on top. Managing Director, Michael Winkler told Knowledge@ASB that in 2009 the company surpassed its home market sales figures by 500 to 1000 cars by selling 13,000 cars in China. "We sold less than 1000 cars in China six years ago," he says. The increase in vehicles sold in Asia offsets falling sales figures in the West where margins have been severely squeezed over the past two years.
What is the future of luxury brands in the post-GFC world?
On Wednesday May 11, Kevin Nicholls, Director of Sales and Marketing, Porsche Cars Australia will join Dr Rebecca Huntly of Ipsos Mackay Research and Melinda Stewart, Finance Director, Louis Vuitton Oceania to discuss this question and others at The Business of Luxury, an Australian School of Business alumni event. Each speaker will share their knowledge of the luxury brand market in an interactive panel facilitated by Professor of Marketing, Murali Chandrashekaran, Academic Director, AGSM MBA Programs, Australian School of Business. Alumni are encouraged to bring questions on the night and participate in the discussion on this topical issue.
The event takes place at the Porsche Showroom, Sydney South, the largest Porsche showroom in the southern hemisphere.