Macau’s weak service standards threaten premium sales
James Law
Macau needs to improve its service standards when it comes to the sustainability of premium sales, a marketing professional told a business audience yesterday.
The France Macau Chamber of Commerce hosted the vice president of the Macau Marketing Institute, James Law, yesterday at its breakfast briefing, where the remark was made.
Founded in 2018, the marketing organization aims to enhance collaboration within Macau’s marketing industry and among Macau’s marketing professionals, while promoting the development of marketing in response to the economic development policies of the Chinese and the Macau SAR governments, thereby contributing to society.
With premium brands opening more stores across mainland China, the marketing professional said service is the critical area in which Macau should improve. Working with a retail chain, Law said mainland China has more and larger renowned fashion brand stores than Macau. For example, he said, there is a three-story Christian Dior mansion in Shanghai, hinting that Macau cannot compete with the mainland in terms of size.
As such, the key area for competition is service standards. Law said that in the past, service only became an issue when a customer was in the boutique. Now it starts before the customer sets off for a return visit. A customer’s awareness of a brand is maintained by social media channels sending regular greetings and new product information.
It is equally important that sales associates refrain from complimenting a customer’s beauty or body build directly. Instead, it is recommended they “guess” the customer’s routine, such as how frequently the customer visits the gym or the beauty parlor, to build human interest and connection.
Price competition is unlikely in the premium jewelry, watches, leather goods or fashion sectors since they have a tax-free status “of around 10-20%,” the marketing professional said. However, it is possible in the beauty, cosmetic, skincare and fragrance sectors.
Even so, Law believes stores will be able to overcome challenges with better service standards for they are well-established in Macau.
A key area in which stores can improve to maintain their impact is client segmentation. In addition, larger chains will have more flexibility in operations and pricing, for they can cover losses in certain locations or sectors with profits from others.
Law reminded the audience about the shift in customer tastes. Before 2020, he said, it was common to see Chinese people wearing clothing with obvious logos. But now, they have become more subtle, restraining their expression.
On whether China’s expected economic downturn would impact the sustainability of these global brands, Law thinks that with a large millennial middle class, consumption will still remain stable because these people have disposable savings or investment returns. Generation Z, on the other hand, raised under China’s single-child policy, is understood to be wealthier and have more disposable income to spend. He said it was expected, in 2025, 40% of worldwide premium goods sales will come from Chinese nationals.
