American Brand Expanding Rapidly In Second- And Third-Tier Chinese Cities, Trying Harder To Compete In Top-Tier Cities
Coach China Region President Andre Cohen (Image: Butterboom)
Virtually every major global luxury brand is expanding into smaller second- and third-tier Chinese cities, opening new flagships in Beijing or Shanghai, kicking up their digital outreach and generally trying to convince mainland Chinese to buy locally rather than abroad or online. However, we find the China strategy currently being deployed by Coach — the American luxury house that specializes in what can best be described as “middle-class luxury” — of particular interest.
As Jing Daily noted earlier this year, although Coach executives certainly aren’t putting all of their energy into China expansion, also drafting plans to increase the company’s footprint in Europe as well as the U.S., CEO Lew Frankfort and China Region President Andre Cohen (who joined the company in 2008) have big plans for the Middle Kingdom:
Though the fundamentals look good for Coach’s China ambitions, many companies engaged in rapid expansion efforts are finding out that growth in China’s potentially lucrative second- and third-tier cities can alienate wealthier (and more fickle) shoppers in top-tier cities like Beijing and Shanghai. As a Hexun article (original / JD translation) on Western brands considered mediocre at home yet upmarket in China recently indicated, Coach must fight the perception among some Chinese “luxury gourmands” (as defined by Chadha and Husband) that the company isn’t a true luxury brand on par with its European rivals.
This month, China Region President Andre Cohen spoke to Phoenix Online about his company’s plan to succeed in the vast and multifarious Chinese luxury market (translation by Jing Daily team):