As luxury brands used to dominate in Asia, the affordable luxury brand tends to surpass the luxury in terms of the pace of the expansion recently. Referred to as “affordable”, “mass” or “accessible” luxury, these labels occupy the space between inexpensive generic brands and high-end luxury like Louis Vuitton, Chanel and Gucci. There are couple of reasons to explain this trend.

Firstly, luxury has been in Asia for a long time. There is no large market space for them to expand. In contrast, affordable luxury is a relatively new concept. It targets the expanding middle class in Asia, especially China, which is fueling the domestic growth of mid-level luxury brands, such as Folli Follie, Coach, Michael Kors, Agnes B and Marc by Marc Jacobs. They offer an attractive option to consumers climbing the economic ladder: a brand name, better product quality and better design, but one that won’t burn a hole in their pockets. This market has been developed in North America for a while and now is expanding to Asia.

Secondly, with the economic development of Asia, consumers also developed a deeper understanding of fashion and it changed their buying behavior. Besides Chanel, Dior and other famous luxury brands, there also exerts the tendency for them to buy more stylish and unique brands which might not be that expensive. This also gives a good opportunity for the affordable luxury to grasp the potential market.

Coach, an American brand best known for its handbags, is considered to be one of the bestselling affordable luxury brands on the Chinese mainland. It entered the market as early as 1988 which gives it first-mover advantage. Furthermore, it has the accurate position for itself. Coach doesn’t set up stores near LV or Chanel. The stores are always located in less upscale shopping centers but are usually the most visible spot thus captures more attention. This is a good example for other affordable luxury brands to learn.

Following is a video I would like to share with you. It talks about the rise of affordable luxury in Asia.

http://live.wsj.com/video/affordable-fashion-surpasses-luxury-in-china/029D9AED-F830-44BE-90BE-FAF50AEF6162.html#!029D9AED-F830-44BE-90BE-FAF50AEF6162

Facebook and twitter are very popular in Western and North American countries. Recently, Facebook also did well in India, Indonesia and the Phillippines. However, no company’s global strategy can be truly complete without China. There has been rumor from two years ago that Facebook was going to corporate with Baidu to enter the Chinese market. However, up till now, it did not manage to do so. How come?

Viewing Chinese social media market, several companies have already occupied it. Sina weibo and Tencent weibo function similarly to Twitter, encouraged people to send short and clever blogs while Renren and Kaixin operate like Facebook, created the platform for people to share opinions with people they know from the real life. With respect to Sina Weibo, it includes the largest amount of celebrities, which is another eye-catching point that Facebook doesn’t have.  As discussed above, the value Facebook can provide to Chinese Internet users now is fairly little in this quite mature market.

Furthermore, in the government perspective in China, myriad aspects of political and social situations are not allowed to publish. Young people in China prefer using Weibo to socialize, gossip, and discuss news as it is relatively safer to them not using the real name. In contrast, Facebook encourages people to share feelings and discuss everything with the real name. Even corporating with Baidu, who has the best relationship with the government, it is unlikely for Facebook to succeed in Chinese market if it cannot manage to explore additional value to provide to Chinese Internet users and adapt the Chinese political environment.

Here is the link of more detailed discussion of this topic

https://www.youtube.com/watch?v=pwidvfsvLTU