Exclusive | Ralph Lauren’s ‘cluster approach’ to grow business in China, the world’s largest luxury goods market, by 2030

Global fashion retailer Ralph Lauren continues to build its brick-and-mortar presence in China, capitalizing on its growing brand value in the country, which is predicted to become the world’s largest luxury goods market by the end of the 2010s. To go.

The company plans to open around 20 to 30 new stores a year in China, where it already has an extensive digital marketing strategy in the world’s largest e-commerce market, and a similar number across the region. It’s scheduled to open.

“We continue to see brand awareness strengthen, and we think we have a strategy that works in markets like China,” CEO Patrice Loubet said in an interview with the Post, adding: listed three strategies. We are increasing our presence in major cities, promoting our core products, and strengthening our brand through marketing and partnerships.

“China is the most advanced market when it comes to digital activation, not only for JDTmall, but also for all social media platforms, the latest one being Douyin, we are experimenting there and we are seeing initial results. “I’m very encouraged,” he said.

China is an important market for the New York-based company, and its signature products, such as polo shirts, cable-knit sweaters and blazers emblazoned with the company’s iconic logo, are driven by changes in consumer tastes and Amid the turmoil in China, it is currently popular among Chinese customers. Luxury department. Ralph now operates multiple brands under his Lauren umbrella, and in addition to apparel and lifestyle products, he has expanded into the hospitality sector with his eponymous line of coffee and bars.

Last year, the limited-edition collection developed with Baggs, an influencer with millions of followers on Chinese social media, sold out in less than a minute on WeChat, with Singles’ Day sales also contributing to the price. The company’s latest earnings report, which grew 25% year-over-year, said markups increased and discounts decreased.

The company announced strong financial results for the third quarter of fiscal 2024, exceeding analysts’ expectations. Sales increased by 6% on an annualized basis to US$ 1.9 billion. This was mainly due to the Asian influence, with sales increasing by his 16%, outpacing sales in Europe and North America.

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Across Asia, physical stores grew by 13% and digital commerce by 25%, but sales in China in particular increased by more than 30%. The company attributes this to overall growth from the holiday season and singles. ‘A successful day.

But Roubaix said the company will continue to operate in a “very volatile environment” and will be “disciplined and orderly” in its expansion, with “remaining significant” growth in major Chinese cities. He said he will continue to explore opportunities.

“We are not going to build China for the next few years. We are going to build China for the next 20 years. It may sound a little grandiose, but we are going to grow at all costs. I don’t want it,” he said.

The company adopted a cluster approach to its expansion in China, concentrating its stores mainly in tier-1 and tier-2 cities. Chua Hsing Wee, the company’s chief executive for China and Southeast Asia, said the company’s strategy had been deemed “very successful” and said that before expanding, the company has expanded its operations to include cities in Shanghai, Beijing, Chengdu, Shenzhen and Taipei. , which focused on six major cities in Hong Kong. He said the company would apply the same approach to its plans for Southeast Asia, its fastest growing region.

Ralph Lauren currently operates approximately 160 stores in mainland China., Many are customized for specific locations.

Chua said the company was initially established as a men’s clothing line, but will now focus on growing its women’s business in mainland China.

“Over 60, 65 percent of our consumers… [in China] In fact, we have a large number of women, and our share in the women’s business sector is high, about twice as much as the global total,” Chua said.

“We have maintained growth momentum in the mainland and the region over the years, much of which is due to our customer focus on women,” she added.

Consulting firm Bain & Co is bullish on China over the medium term, predicting that the mainland will overtake the Americas and Europe to become the world’s largest luxury goods market by 2030.

Last year, Ralph Lauren also opened new stores in major malls in Southeast Asia, including the Suria KLCC complex in Kuala Lumpur, Malaysia, and its third store at Marina Bay Sands in Singapore.

A recent report from professional services firm PwC named Southeast Asia as “the next likely destination for the luxury goods market,” citing Singapore, Vietnam, Malaysia and Thailand as key locations for the growing high-income segment. There is.