MARKET REPORT, ASIA


Now who’s wearing the trousers? ASIA SIN 60


Jeans brand Levi’s is preparing to launch its first global brand outside the US, making China its home, but what does this tell us about marketers’ attitudes in China? Jessica Lo helps us find out


Come the autumn, Levi’s will have a new brand in its portfolio, that retails for slightly less than its others but that will still be guided by global ambitions. The big difference for the jeans brand is that this launch will be focused on China, and see its initial store base there rise from 20 this year to 1,000 by 2o15. Tod Gimbel, Levi’s senior director,


corporate affairs in Asia Pacific, said: “The brand is designed to appeal to the rapidly growing market of upwardly mobile, youthful consumers. We’ll be targeting educated 18-28 year-olds who covet fashionable jeans, but may not be able to afford them.” Although the news has been met with mixed reactions, the launch makes sense for Levi’s. Brands need to invest money where consumers are still spending. In China, retail sales are estimated to grow 16-18% in 2010, driven by women under the age of 35 and those in second- and third-tier cities. Although many analysts think the Chinese are price-sensitive and only buy cheap products, this is no longer true. They spend $7.5bn a year on luxury products, the second largest in the world. Moreover, last year a McKinsey report found that wealthy consumers in China are 20 years younger than their peers in the US and Japan. But not all foreign brands make it big in China. There will be many failures, as Marks & Spencer has found. Those that do well understand younger Chinese consumers. Importantly, brands have to bring in the newest products from the current season. If not, the Chinese


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youth don’t feel the brand is committed to them or that it fits their way of life. Levi’s has already had success in China – it opened its 501st store towards the end of 2009. This new launch shows the Chinese that they are valued.


What are the chances of success? Car companies have been pursuing this strategy too with Porsche launching its Panamera sedan and GM both designing and launching its newest Buicks in China. Importantly, younger consumers are driving sales, and Levi’s needs to understand this to do well. M&S has never grasped that – it is


trying to sell to an age segment that, because of historical reasons, just does not have much disposable income. Levi’s has also just launched its


‘Change Your World’ campaign in India, making the brand’s global ambitions clear. After years of its fortunes being on the wane in Europe, Asia offers it a chance to reconnect and revitalise the brand. ○


Jessica Lo is managing director of China Market Research Group


Key Statistics 630m


Number of Chinese people under the age of 24


Source: The Nielsen Company


For more in-depth comment go to mandmglobal.com


ECONDS


Newsweek launches in Pakistan u Euronews launches Malaysian


feed u Cosmopolitan hits the shelves in Vietnam u Iris looks to Asia for growth Lonely Planet Magazine rolls out in India and Singapore u Yahoo! portal targets Asian mothers u Adtech to launch in Singapore u Indonesia gets Elle Decoration, and Meredith’s More and Forbes to come.


Asia leads adspend recovery, according to ZenithOptimedia,


Nielsen u Baidu reaps from Google’s woes u Chinese marketers are biggest spenders u Publicis buys back part of Dentsu stake u Comscore strengthens Asian presence u India’s infrastructure to get funding boost


Australia takes on branding on cigarette packets u New


government regulations puts Singapore pay-TV at risk


UM ends partnership with McCann Erickson Guangming


320m


Number of mobile owners under the age of 30, by 2012


86.4m


Number of users on popular Chinese social networking site QQ


Levi’s set to roll out new launch in China SYDNEYwith Jay Stevens Vice-president and general manager international, Rubicon Project


MOST CONVENIENT HOTEL Either the Diamant or the Blue BEST RESTAURANT FOR A BUSINESS LUNCH Flying Fish is great, as are Jimmy Liks and Spice I Am in Kings Cross. Bambini Trust is equally good BEST REASON TO GET UP EARLY A lingering coffee at the Circular


54 M&M Q2 2010


Quay, sitting in the shadow of the Sydney Opera House BEST MEDIA HANG OUT Bambini Trust – all the media companies are minutes away ETIQUETTE TO BE AWARE OF The best part of doing business in Sydney is that there’s no etiquette to be aware of!


WHAT TOURISTY THING SHOULD YOU DO Jump on a ferry to Manly Beach, do a Harbour Bridge climb and, for the well-heeled, take in the opera at Sydney Opera House DON’T… Try to out-drink the locals, for you will be embarrassed. ○


www.mandmglobal.com


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