Lap of luxury

Pablo Mauron's career revolves around observing and reacting to the tastes of China's wealthy, a market he sees both expanding and becoming more sophisticated

For Pablo Mauron, China is a land full of opportunities.

As the general manager of Digital Luxury Group's China office, the 33-year-old has witnessed a rapid rise in the consumption of luxury goods and has in-depth knowledge of the market.

In his opinion, China's luxury market has just started to take off, but is already seen as an indispensable part of business strategy by most international luxury brands. And Mauron, from Switzerland, hopes to ride this wave of expansion to develop DLG's business in China.

"China is a key part of our company strategy," he says. "I believe that in 10 years China will become not only the biggest luxury and fashion market worldwide, but also a key driver for the overall luxury industry globally."

DLG was one of the first European companies to specialize in digital marketing. It is a research and marketing firm that focuses on luxury brands and digital marketing services.

The company is headquartered in Geneva, Switzerland and has offices in New York, Shanghai and Dubai. Its clients include TAG Heuer, Piaget, Marc Jacobs Fragrances, Vacheron Constantin and Sotheby's.

Mauron says that in working with international brands and their local Chinese teams, one of DLG's main objectives is to localize marketing campaigns.

"How can luxury brands combine their long time heritage with the required innovation to succeed in the competitive Chinese market is the issue DLG deals with," he says.

A number of global brands, including Longines, Four Seasons, Fendi, and Baume & Mercier, have already used DLG to localize their marketing, he adds.

Prior to relocating to China Mauron worked for DLG in Geneva, where he was responsible for branding for some of the company's main clients, using Internet search engines and online media campaigns. Before joining the company in 2008 he worked for a start-up company in online advertising.

"I personally come from a technical background, having studied computer engineering in Switzerland," he says.

"I had the opportunity to work with a few different highly innovative companies in the fast growing online advertising market and started to work with luxury brands on the technical side at Digital Luxury Group."

The first major luxury brand he handled at DLG was TAG Heuer, part of LVMH, the world's largest multinational luxury goods conglomerate.

As he learnt more about the luxury goods market he realized there were parallels with engineering, including the need for companies to constantly reinvent themselves to stay ahead of the competition.

Mauron was surprised at the enthusiasm for luxury goods among the Chinese when he first arrived in Shanghai.

"I grew up in Geneva, the city where watches are part of the city life, and it was mesmerizing. When I arrived in Shanghai, I was impressed to see how Chinese consumers are curious to hear about the stories of these watches and their desire to buy those expensive timepieces," he says.

He says China's luxury market is rapidly growing, with many luxury brands now well established, especially within first tier cities. But times are becoming more challenging and exciting, he adds, with growing competition and increasingly sophisticated consumers.

"The market is getting more fragmented, especially in some segments like the fashion industry, and consumers are willing to distinguish themselves, which makes the market much more challenging than it was in the past," he says.

"However, a lot of opportunities can also emerge from this context where no positions can be taken for granted. The willingness to buy nice things for a more refined life and the consequent purchasing power that is going to be unleashed is not going to change."

Changing tastes means a greater demand for luxury goods that are individual, he believes.

"China is probably the market where the mix and match trend is the most developed and you can really observe that a unique taste for luxury and fashion is growing here. Thus it's not only about ultra high-end from a pricing standpoint, but also about exclusivity and credibility," he says.

"It creates a unique playground for brands that have to care more than ever about their positioning and reputation since people don't aspire any more to simply own a logo but really to develop their own style and to stand out from the crowd."

Mauron believes the Chinese mainland is a crucial market for DLG's development as most luxury brands are shifting resources there. This was a motivation for the company in setting up its only Asia office in Shanghai, he says.

As more wealth is created in China an increasing number of smaller Western brands are selling well in the country, according to Mauron, but luxury services or experiences, offering travel, entertainment and health, may find it harder to enter the market.

"A handbag or watch are typically the kinds of luxury goods that are consumed on public occasions, while a luxury lingerie brand or luxury kitchenware may find it much more difficult to break into the market. The service sector follows the same logic," he says.

But according to Mauron some luxury service providers have adjusted their business strategies to adapt to China.

"More luxury Brands are turning to our company to assist them in defining or optimizing their digital marketing programs in China, but also to create and implement highly distinctive social media strategies or search engine optimization services," he says.

Mauron also hopes China will begin to develop homegrown international luxury brands.

"Chinese people are proud of their culture, their craftsmanship and their heritage and this is more than justified," he says. "In the meantime, the whole world is starting to look at China and knows that the country will continue to grow and learn rapidly.

"I am really excited to think that one day, a brand will successfully mix luxury core values such as know-how, tradition and excellence, with real local heritage and strong branding."

Some Chinese brands - such as Exception, the favorite of China's first lady Peng Liyuan- have already begun to make a mark internationally.

"Some of China's domestic brands are on their way to doing so. The question is how much time will it take," says Mauron.

liulu@chinadaily.com.cn

( China Daily Africa Weekly 09/13/2013 page29)