China is currently the world’s third largest consumer market and is predicted to overtake Japan and the US to become the largest by 2015. Foreign brands are keen to court China’s consumers, whose rising disposable incomes and increasing brand awareness makes them a market with huge potential. However, this is no easy courtship. A range of factors are eroding the market position of foreign brands, including fragmented regional distribution channels and fierce competition from domestic producers who are offering lower price with rapidly improved quality. This was the challenge facing Luminarc.
Established in 1948, Luminarc is the oldest brand sold by Arc International, a world-leading French glassware manufacturer. Arc International’s focus on quality products and technology has won over customers around the world and today products from its daughter brands are sold in more than 160 countries. Since first entering the Chinese market over a decade ago, Luminarc has upheld Arc International’s tradition of quality and built a strong customer base in China. In order to maintain its competitiveness, the best response for Luminarc was to enter the e-commerce market through a Taobao* store. The Chinese e-commerce market has huge potential for brands; current estimates suggest that by 2015 China will be the world’s largest e-commerce market with a value of US$360 billion.
However, winning new customers wasn’t easy. Bite Shanghai worked with Luminarc to really get to the bottom of what sets Luminarc apart from the crowd and find out the best way to sell this message to Chinese consumers – a real “personal touch”. Luminarc’s main customers in China are middle class, white-collar workers and housewives. For these groups, especially women, their overarching aspiration in life is to be healthy and happy.
Bite embraced this aspiration with enthusiasm, coming up with a strategy to breathe life into Luminarc’s brand. We abstracted Luminarc’s USPs – its Frenchness, its durability, its innovative design – and incorporated them into their slogan and imagery. Now when people think of Luminarc they don’t just think of plates and glasses (even if those plates and glasses are beautiful). Instead, they can really associate Luminarc with their everyday life and imagine all the experiences they would have using their products – a romantic dinner for two, a lunch with friends, or simply time with the family.
Another major challenge for Luminarc was that although their market share was over 30%, brand awareness was lagging far behind. Bite helped Luminarc to establish an official Sina Weibo channel, equivalent of Twitter, to educate consumers about the brand, hold promotions and encourage a community feeling among people who already use the brand. This community is key to attracting and retaining customers in the Chinese market, since many rely on recommendations from friends or online peers when choosing a product (according to a report from Boston Consulting Group, over 40% of Chinese shoppers had both read and posted online product reviews, twice the rate in the US). As a result, the weibo channel helps to drive traffic to Luminarc’sTaobao flagship store. Today, Luminarc’sweibo is a stylish, visual channel.
Bite helped Luminarc take the initiative and adapt their brand communication to get closer to Chinese consumers, using our expertise to give their brand the “personal touch”. This is a key lesson for foreign brands, which need to sit up and pay attention if they want to take a slice of the consumer market in China.
*Taobao is a Chinese e-commerce website similar to eBay or Amazon. It was founded by Alibaba Group in 2003.