May 2009 - I told you about Herborist, which I quoted as an example of a new Chinese luxury brand. Recently, two years later, I took advantage of my recent trip to China to see how this brand had developed since then: all that I predicted was confirmed, but we need to take a quick step back in time to understand what is at stake here.
In 2005, the brand was distributed mainly in corners of large department stores in China, and attained a turnover of around 100 million Euros. It then decided to expand globally. It approached Sephora in 2006 - wishing to be referenced. The answer was clear: Sephora, interested in the concept which was based on traditional Chinese pharmacopoeia, but finding the products of little interest, offered to include a hand cream and a cream for the feet in its product list. Herborist took this as a snub: it meant that the distributor considered the brand as inconsequential. But this also obliged the brand to take a hard look at its brand identity - and go back to the drawing board.
It then decided to make two major changes:
- To work with a French design & packaging agency (centdegrés) which helped them to transform the graphic identity of the brand - in order to place it on a level with the best international beauty brands.
- To develop a network of boutiques in China so as to become indispensable in its home market.
The result is phenomenal: Herborist now has 1,000 shops in China, a spa in Shanghai and a turnover of over one billion Euros.
We can draw two lessons from this example:
- Chinese brands have a strong desire to develop as global brands: This was confirmed during my recent trip. China is currently creating a large number of luxury brands that will soon, once installed in the domestic market, expand to the global market.
- This development will be even faster if they know how to surround themselves with expert European advisors, French in particular - as France is considered a point of reference where luxury business models are concerned.