Babin: Cultivate the Chinese market with patience

More and more international luxury brands are looking at the purchasing power of this ancient eastern country.

According to a report by Goldman Sachs, China's luxury goods market reached US$2 billion in 2003, ranking first in the world in terms of growth rate. Morgan Stanley's report shows that 10% of Chinese people have the ability to consume high-end luxury goods, and this number is still growing.

The Chinese market has become a battleground for all kinds of big brands. TAG Heuer, part of the world's largest luxury goods group LVMH, is also one of them. Since it officially announced its entry into the Chinese market in 2002, the world's leading brand of professional sports watches has placed it at the top of its global strategy. The three core series: professional sports watch series, classic watch series and women's series have been fully launched, and TAG Heuer's global president Jean-Christophe Babin has also become China's regulars.

In the past two years, TAG Heuer's brand recognition has entered the top ten luxury watches in China, and sales growth is also good. "In fact, even a growth rate of 300% or 400% is meaningless. After all, the previous base was very small. The key is that TAG Heuer is developing steadily and its popularity is gradually increasing." Babin is very satisfied with the current results.

China is still a brand new market for luxury goods. In the two years since TAG Heuer officially entered China, what do you think is the most difficult part in marketing?

I think it may not be the most difficult, but more time and patience. For this new market, TAG Heuer needs a step-by-step process.

In fact, in 1995, TAG Heuer was already on sale in China, but it was very low-key at the time. Before selling in China, we did market research, and TAG Heuer's brand awareness was still very low at that time, so we decided to try to enter some watch shops first, without investing a lot in the market. In 2002, with a certain channel foundation, TAG Heuer decided to officially enter China and began to invest in large-scale marketing.

Now from the data point of view, the progress is very fast. In 2003, TAG Heuer's media volume ranked third in the luxury table; in the 2004 brand awareness survey, we have entered the top ten brands. Because TAG Heuer is ranked fourth globally, our goal in China is to be at least in the top five. In the next few years, we will have good patience to persevere, and will still increase investment in the Chinese market.

Before TAG Heuer, some well-known luxury watch brands have entered China one after another, not only with high brand awareness, but also achieved good sales results. How will you deal with competitors in these markets?

In fact, China's luxury market is just beginning, and the consumption potential of luxury watches is very large and has not yet been tapped. There are many Swiss watch brands entering China, all of them are interested in the development potential here, and everyone will work together to make this market better. So, I'm not particularly pressured to compete, I'm not in a hurry, I'm looking to grow steadily. Now in some watch shops in Beijing and Shanghai, our monthly sales have reached the first place, even compared with the competitors with the highest brand recognition, which has strengthened our confidence.

We are looking for some brand ambassadors in China to bring TAG Heuer closer to local consumers. On the other hand, product development will also launch some new products according to the aesthetic preferences of Chinese consumers, or make some modifications and adjustments to better suit their tastes. For example, the size will also be adjusted according to the physical characteristics of the Chinese people and so on.

Compared with the huge investment in marketing and advertising in the past two years, TAG Heuer's sales in China are still relatively small. Are you worried about this?

At present, the sales in the Chinese market do account for a very small share of TAG Heuer's global market, only a few percentage points, and have not entered our top ten global markets. But a brand, especially for luxury goods, must decide to build the brand seriously when it first enters a market. The initial investment must be more than the sales, and it is much more. There is no doubt about this. It is unrealistic to say that he made money as soon as he came to China.

But that's no problem for TAG Heuer. In many countries, we have been in for a long time, and in many countries in Western Europe, North America, and Southeast Asia, the market share is the first. Profits in these markets are enough to cover our expenses here. I am confident that in five years, China will become one of our top five target markets in the world.

TAG Heuer is considered to be a luxury watch with "sports DNA", and traditional Chinese people think that a sports watch is just a timer, not suitable for formal occasions. So, how did TAG Heuer market the concept of "sports luxury watch"? Who are the target consumers in China?

First of all, we are not a sports brand, but get a lot of inspiration from sports, such as precision, reliability and so on. Our marketing plan in China is to shape the concept of "Sports watches are no longer just sports watches, but also a symbol of success, fashion and taste".

In terms of design, TAG Heuer is indeed different from traditional luxury watches, it is more dynamic and innovative. We have noticed that the interests and lifestyles of the younger generation in China are quite different from those of the traditional generation, such as they are more focused on health, leisure and entertainment. Therefore, this generation will prefer TAG Heuer's design more.

In our experience, although TAG Heuer ranks fourth in the global luxury table, we are ranked first or second in many countries for the twenty to forty year olds. For example, in Western Europe, since the 1990s, TAG Heuer's sales have quickly risen from more than 40 to the top few. This shows that it is in line with the different aesthetics of the new generation and the previous generation. The target population in China is roughly the same.

In addition, TAG Heuer has different product lines to cover different age groups, different experience and different genders. For example, the LINK series, in terms of function, it is waterproof and anti-wear suitable for sports, but it is also very elegant in design, which is more suitable for the lifestyle of business people.

What channels do you think are the most effective ways to reach these target consumers?

Although TAG Heuer also has a women's watch series, it is still a relatively masculine brand. TAG Heuer's consumers are usually well-educated elites who have good jobs or are very successful. So in terms of advertising, our traditional channels are some business magazines, which are the most effective. For myself, an ad in a monthly or weekly magazine would get my attention, but I rarely read the daily because it's trivial. In addition, we will also choose the channel of the network. TAG Heuer is one of the few luxury watch brands that has launched a Chinese website.

Also, we sponsor some sporting events, such as Formula 1, golf tournaments, and more. The product series sponsoring these two competitions are also targeted: Formula 1 is the FORMULA 1 series, because F1 fans are mostly 20 to 40 years old; and golf is the LINK series, because the age of golf enthusiasts Usually larger. This is consistent with the consumption positioning of different products, forming a good complementarity.

TAG Heuer has achieved good results in different markets in Europe, America and Asia. How to make the brand recognized in different cultures?

What we need to see is that although the culture varies greatly in many countries, the values behind the culture are similar regardless of the ethnic group. For example, when it comes to sports, Chinese people may think of Tai Chi, while British people think of football, but they love a healthy life, and this value is almost unified everywhere. For luxury goods, the preferences of consumers around the world are not much different, because these brands break through the superficial cultural expression and convey the common values behind the culture.

Luxury, elegant and sport-inspired, the brand image is attractive in every country. TAG Heuer's global development is relatively uniform, with one-third of sales in the United States, one-third in Europe and the Middle East, and one-third in Asia. In the United States, Japan, South Africa, these countries with very different cultures, TAG Heuer is very strong. So I have reason to feel very confident about the Chinese market.

-Celine Wei