The Luxury China 2012 expo last month attracted 86 brands to exhibit their goods such as oil paintings. Provided to China Daily

For a chess board maker and a drycleaner, China holds shining prospects

One man was busy telling people about his gold and diamond chess sets, another posed next to two immaculately presented sports cars, and elsewhere a woman showed off her leather restoration technology.

Daniel Porchet, Jim James and Filomena Merszei were among those promoting the latest luxury products or services at the Beijing International Top Lifestyle Brand (Luxury Goods) Exposition, or Luxury China 2012, held at the World Trade Center in Beijing over three days from June 8.

But the three have something else in common. They are relative newcomers to an increasingly crowded field on which players vie to increase their business and snap up market share in China, all the while wrestling with their shaky faith in fickle European and US markets.

Among the 86 luxury brands testing the waters of the Chinese market were Jeeves of Belgravia, a drycleaner from London that proudly bears the monicker "By appointment to HRH the Prince of Wales", Gold&Play, a fledgling Swiss company that offers chess sets "made out of pure gold and set with diamonds", and Morgan Motor Co, which for more than 100 years has made fancy sports cars.

The expo was put on by the China Chamber of International Commerce, the Luxury Marketing Council Worldwide and Zhenwei Exhibition Group, and organizers said the value of sales was 52.9 million yuan ($8.3 million, 6.6 million euros), well short of the 670 million yuan that had been hoped for. However, that did not seem to dampen optimism about the luxury market.

"China is expected to top Japan as the world's biggest luxury goods consumer by 2015," says Xiong Xunlin, deputy secretary-general of the China Chamber of International Commerce. "By then the value of luxury goods bought in the country will be $27 billion (21.5 billion euros), or 20 percent of the global luxury goods market."

Nevertheless, new entrants to the luxury brands market in China, following in the steps of brands that are already well established, will have their work cut out to do likewise.

"It's the first show for us in China to introduce our brand and our first product," says Porchet, founder of Gold&Play, which started trading last year and boasts that its chess sets "combine Swiss craftsmanship and savoir-faire with 21st century innovation".

The price for the cheapest set, in which the kings, queens and all the other pieces wear exquisitely crafted rows of diamonds around their waists, costs 350,000 euros, and the most expensive, in which all pieces are decked in diamond regalia, will set you back 1.25 million euros.

"We want to see what people think of our products, what they want and also hope to have our name known here," Porchet says. "We want the game to travel the world."

Porchet says there were no plans to find an agent in China or open any stores in the country because the company's products are custom-made and it does most of its business through its website.

"We are at an upper level. We are not going to work with an agent who distributes our products in the traditional wholesale way. The partner (needs to) provide one-to-one service."

Porchet says his products are more than chess pieces, and could be regarded as jewelry for men, given the lack of diamonds made for males, apart from those in rings and watches.

"With Chinese people having more interest in European luxury products, I think our products will find buyers intending to make an investment or send gifts."

Unlike Gold&Play, Morgan Motor Co is well known to many Chinese because of its long history. It said it had signed two deals on the first day of the fair.

"This is an official launch for Morgan cars in China, and China is one part of the company's five-year expansion plan," says Jim James, managing director with Morgan Cars Ltd.

James says his aim is to sell 30 or 40 cars in China in the first year, and then build up to more than 100 over three years.

Despite the economic crisis, the company is still highly profitable, he says. It limits itself to making cars that have been ordered in advance, and it made about 950 last year, compared with 500 in 2007. It regards its entry into China as an investment in the company's long-term future.

James acknowledges that the luxury auto market in China is beginning to mature and that Morgan has appeared late on the scene, but there is still room for growth because the country's wealth and its middle class continue to grow, he says.

"Morgan has always competed with Aston Martin, Lotus, Rolls-Royce and other brands that have marched into the market but Chinese driving enthusiasts are becoming more sophisticated and we can offer them hand-made, vintage-style authentic British cars."

With the company's Aero Coupe priced at about 3.3 million yuan and the Plus 8 at 2.8 million yuan, Morgan plans to attract two different kinds of consumers in China.

"The lightweight sports touring Aero Coupe with a powerful 4.8L BMW engine is mainly for entrepreneurs, while the Plus 8, two-seater convertible, the lightest V8 passenger car in the world approved to European safety standards, will be more popular among the creative community, such as musicians, movie stars, etc," James says.

But Morgan faces challenges in the new market, among them educating people about the value of the brand.

"We have to introduce the history and culture of Morgan cars in China as we don't have a history of more than 100 years here as we do in England."

The company has translated the content of its official website into Chinese and has also registered a weibo account.

As a relatively small British company in the huge Chinese market, localization is critical, James says.

"Apart from finding consumers that appreciate the look and the feel of our cars, we have to make all the cars comply with local regulations."

Jeeves of Belgravia caters for those who care about the look and feel of their clothing. The company, founded in London in 1969, the year Charles was named Prince of Wales, aims to find a niche market, pinning its hopes on the market for luxury goods continuing to grow.

Filomena Merszei, executive director of Jeeves (HK) Ltd, says that after getting the franchise for the Chinese mainland, she wanted to use the expo as a springboard to promote the brand.

The first shop is to open in Shanghai at the end of this year, and others will soon follow in Beijing and in other cities.

"We are still looking for investors. We want partners in China because China has different rules in terms of rents, tax and other areas."

The company will charge about 250 yuan to clean a suit, five or six times the going rate, and between 1,000 yuan and 5,000 yuan to revitalize handbags and protect them from the elements, the price depending on the wear and tear they have already suffered.

Merszei says the company has no competition in offering premium laundry services, but she is cautious about the expansion.

"Whenever we start, we always start slowly. We want to test the market first, and will have one or two shops in the beginning. One or two years later we'll (open) more if the market goes well."

In Beijing and Shanghai the company will pick up clothes or bags from customers, Merszei says.

"The delivery business will be our major business here."

yaojing@chinadaily.com.cn

(China Daily 07/06/2012 page18)