Retail | Analysis: Macau needs to infuse its culture into the luxury market

Andy Hou

It has become a recent trend for affluent Chinese to travel overseas more often and now the luxury goods market has to keep its fashion offerings up to date, according to Andy Hou, general manager of Chanel Limited Hong Kong and Macau.
Hou conducted a seminar titled “Will the luxury goods industry thrive again?” as part of the third France Macau Business Association’s (FMBA) monthly meeting, which was held at the Sofitel Hotel this week.
“What we can do as a brand is to equip our staff and have the best of services, and personalization will be the key,” commented Hou on the sidelines of the seminar.
The speaker emphasized that Macau is a remarkable cultural destination, however, the city still has to learn how to “infuse this culture” into the luxury brand offerings
“The risk is not to be connected in the industry and to be left out. Fashion goes so fast and we have to always […] be on the ball,” he cautioned.
Meanwhile, Hou admitted that Hong Kong and Macau retail trends are likely to continue to deteriorate due to weak visitor arrivals.
He mentioned that depreciating currencies in different countries have enticed affluent Chinese customers to travel to other destinations, adding that the changes in China’s consumption taxes could further decrease Hong Kong’s pricing advantage over China.
Raising the brand Chanel as an example, the expert said that the Chinese are its main consumers worldwide, accounting for 35 percent of sales. However, only 8 percent of such clients purchase the products in China due to the country’s price discrepancy.
Increased online competition has also weakened luxury sales in the two SARs, however Hou said the market is striving to improve its product quality and customer service.
“Of course, there’s a downturn but it will come back. I would say people will spend money on brands they think are valuable, so each brand has to work harder; which is good for the industry,” the speaker explained.
Hou admitted that the industry should also aim to equip local employees in retail industry in Macau with “communication and empowerment.”.
Moreover, there is no difference in terms of spending between Hong Kong and Macau consumers of luxury goods, claimed the expert, emphasizing that residents have enormous spending power.
Despite the recent recession in Macau, Hou revealed Chanel is expecting more retail outlets to come with the introduction of the new hotels and casinos opening in 2017.
“It’s a transition period for all [industries]. There’s a very good opportunity for an industry like us to retain, to develop, and to go further to prepare for the next openings in 2017,” he said. “So we have to equip ourselves first before we go to the next level.” Staff reporter