How Burberry conquered China


How does it do it?

These are dark days in retail. At a time when we have become accustomed to hearing about the sad demise of many British brands, the news of Burberry’s continuing success must leave some wondering, “How the heck have they done it?”

In former years Burberry tumbled from the upper echelons of British luxury to a very British subculture, the chav badge of honour: worn head to toe on the country’s football stands and doused all over C-list celebrities like war paint (not mentioning any names – Daniela Westbrook). So how has it recovered to become one of the fastest-growing luxury brands in China?

It’s no accident, let me tell you that much.

According to the investment-research group, CLSA Asia-Pacific Markets, China will become the world’s largest market for luxury goods by 2020 if its luxury goods sales exceed $100bn, as predicted.

A very canny Burberry has made a concerned effort to imprint itself in the minds of the emerging luxury consumers.

It all began to take shape back in September 2010, when Burberry bought out its Chinese franchise partner in a £70m deal, giving it greater control over its presence in the country. Fifty stores were taken over spread across 30 cities in the mainland, including nine in Beijing and four in Shanghai.

The company now has 57 shops in China and this is expected to grow to 100 in less than five years. In addition to the 30 cities it already has a presence in, research into the Chinese spending habits suggest that there are 36 large and 140 up-and-coming cities that luxury brands should target.

Having achieved impressive reach through their retail stores, Burberry has bolstered this presence with a planned, intelligent and some would argue brave marketing campaign that delves into the culture of China’s new luxury consumers. Here’s how they’ve done it.

The flagship store

In April 2011 Burberry’s flagship store opened in Beijing. It threw the kind of launch party that would put any shindig ever seen on Bond Street to shame.

“It was the biggest PR event ever seen and brought with it a new level of technology – absolutely amazing,” Jerry Clode, associate director at brand development and marketing insight consultancy Added Value, told me.

Celebrities trotted down a red carpet, the venue played host to the first ever holographic fashion show and pop band Keane were flown over to perform their first ever Chinese gig.

Tom Chaplin, Keane’s singer, said of the event: “Christopher [Bailey, creative director of Burberry] suggested to me that we should team up to create an incredible event combining music, new technology and fashion in one of the world’s most vibrant and exciting cities, Beijing.”

Exciting indeed. Angela Ahrendts, Burberry’s chief executive, said after the launch: “Asia Pacific is growing at a faster rate [than other territories]and it will very quickly be a third of the business, and I would say in the next three to five years it will easily be half of the business.”

The Burberry flagship store is located in the Sanlitun district of Beijing, the city’s cultural hub. Once known for its street of international bars, the area was developed ahead of the Beijing Olympics and gentrified. It is now referred to as the “hip” part of town and is the city’s cosmopolitan shopping destination.

“The Burberry store is part of a huge mall there,” Clode explains to me. “The store itself is very visible as a geographical landmark. In terms of the space it occupies, Burberry has made a lot of noise.”

But there’s more to Burberry’s Chinese success than bricks and mortar.

Fashionable technology

Burberry has furnished its 57 current retail spaces in China with iPads. But it hasn’t stopped there. The stores have person-height touch screens which can display special collections, fashion shows streamed from other countries and Burberry-produced entertainment.

“The retail spaces are designed to mimic the environment of online shopping,” says Clode. “This new breed of consumer has grown up almost entirely online. Shoppers’ lives have been deeply influenced by technology in a more profound way in China.”

And its the young, tech-savvy shoppers that are driving the growth of the global luxury industry. According to McKinsey & Company, a whopping 73 per cent of China’s luxury buyers are under 45 years old, compared with only 50 per cent in the US. As many as 45 per cent of China’s luxury buyers are under 35 years old, compared with 28 per cent in Western Europe.

“China is home to the majority of the world’s most digitally powered consumers,” CEO Ahrendts has said. “We want to connect with them in stores the same way we do elsewhere, giving consumers full access to buy what they want, however they want.”

If you build it they will come, eh Angela?

Angela Ahrendts and Christopher Bailey a Burberry party

Angela Ahrendts and Christopher Bailey at a Burberry party

Socially-minded brand

Burberry’s use of technology doesn’t limit itself to bandying Apple’s latest technologies around the store. The luxury label has a grasp on social media that far surpasses most other luxury fashion houses.

Followers of the brand in this country will already know about The Art of The Trench, the company’s own social media site that allows people to post pictures of themselves in Burberry trenches and comment and like pictures of others. They will also know that during London Fashion Week last September, Burberry held the world’s first ever Twitter catwalk show.

Unlike many luxury brands, Burberry is not afraid to make itself more accessible to the masses. The same is true of China’s equivalent social media platforms.

“Burberry has gotten off its luxury high horse,” Clode explains. “They are not stuffy like other brands such as Prada. Burberry is consciously trying to capture a new generation of luxury consumer by combining PR with social media.”

Burberry has a huge following on Sina Weibo, the Chinese answer to Twitter. They are also on kaixin001, the equivalent to Facebook, and they have video channels on Chinese YouTube-alikes, Youku and Douban.

“Many of China’s shoppers rely on blogs and other forms of social media for information about brands,” Colleen Cheng, senior vice president and national business director, Ogilvy Public Relations Worldwide China, told the Wall Street Journal.

“Engaging in these channels through influencer engagement and conversation management, therefore, is critical for any brand that hopes to make an impact in this market.”

According to Clode, Burberry’s ability to interact with the new consumers sets them aside from other brands: “Luxury brands have a fear of shattering the idea of exclusivity, but I’m not sure that is the way the Chinese think about it.

“These consumers still don’t understand the language of luxury as we do in Western culture. Luxury in China is still embryonic, they don’t understand what is luxury and what isn’t. Burberry has the opportunity to create that education and benchmark.”

Emma Watson in Burberry campaign

Emma Watson in a Burberry campaign

Using brand London

Founded in 1856, Burberry sent Sir Ernest Shackleton off for his exploration of Antarctica wearing its clothes. It also coined the term “trench coat” by providing British army officers with the raincoats they wore in the trenches of Wo
rld War I.

But it is a very different Britain that Burberry presents to Chinese audiences. “Chinese consumers can’t distinguish Britain from the rest of Europe, but they do recognise London through Western popular culture, such as film stars,” says Clode.

This point can be summed up by the use of Emma Watson as a brand model. Harry Potter is huge in China. Using Watson as a model instantly resonates with Chinese consumers. But it goes further than Potter.

“Emma is quite eclectic in her personal style,” Clode continues. “She’s quite “Camden”. She gives the impression that you can wear Burberry with something that is not luxury. Fashion in China is extremely eclectic – people mix and match and so the opportunity to incorporate Burberry’s products into an experimental style is very attractive.”

China’s future is bright, but is it Burberry check?

There were reports back in October that Burberry’s growth in China was on the wane. But the latest figures paint a different story.

Clode sees no slowdown on the horizon: “Burberry has created a lot of momentum and the context for strong relationships with the brand. The key thing is it has been brave. Social media and PR have allowed Burberry to be a bit more honest with consumers and it has broken through a barrier in expressing brand personality.”

As Keane wrapped up their set during the flagship party, John Peace, Burberry chairman apparently pointed to the stage. “All around us. Made in Britain,” he said.

That certainly has a nice ring to it.