As his employer plans to roll out 15 stores in China,
George Hrdina, president of Ralph Lauren’s Asian business, said in an interview in Hong Kong. “We do more Ralph Lauren business on the island of Manhattan, New York than we do in Hong Kong and China.”
What an extraordinary public statement! Generally, execs are loathe to give any indication of sales volume in specific locations. One wonders if the company breaks out numbers by geography in its financial statements? As luxury sales slow in the West, the paradise of China passes through the minds of sales execs who must raise their numbers or, at least, stanch the bleeding.
Luxury brand Gucci plans to open two to four more stores this year in China, after opening its 28th outlet yesterday. Gucci chief executive Patrizio Di Marco is undeterred by uncertainty in the global economy as China is set to lead future luxury consumption.
Counterfeit Lauren has been a favorite of consumers (both Chinese and foreign) in Greater China for 25 years. How, other than by purchase in a Lauren store, can a luxury buyer ensure that what he's purchased is the real thing? And what, frankly, is the difference between what passes, often, as superb fake and the genuine?
In 1988, a garment maker in Taiwan showed me both and I could not tell the difference. Granted, I was not in the business and did not have the eye or the touch that experience brings. The maker told me that the genuine shirt was priced at $14 ex factory; the fake at $7. Some of the counterfeits brought into the U.S. today are of high quality and priced to sell fast. The problem is bigger than ever before. The potential counterfeit market is now China, not merely Taiwan, Hong Kong, Korea and the foreign tourists who visited those tiny states.
Perhaps there is, other than price, little difference in the well-made counterfeit product. Some name brand contract factories in China -- I will not specify what brand or product -- produce extra for their own account for sale to the domestic market, even in the department stores. China does not present, if I may suggest, a marketing challenge for Lauren -- everyone knows Polo by now -- but a management challenge, specifically of its intellectual property. Daunting, in the face of weak IP enforcement and the ubiquity of excellent forgeries. The company must be well aware of this. Their strategy is worth watching as it plays out over the next few years.
