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Friday, May 24, 2019

Prestige Brands Forum 2019 Hosted at CEIBS Shanghai Campus

May 24, 2019. Shanghai – Co-organised by CEIBS and Shanghai Jing’an District Government, the 11th Prestige Brands Forum 2019 was hosted today at CEIBS Shanghai Campus. On the theme of The Chinese Market and Companies in Transformation: Building Brands by Embracing the Trends. CEIBS professors, representatives of fashion brands, and scholars engaged in discussions on new trends in consumer behaviour, the new era of brick-and-mortar business, and new marketing models in the digital age. The forum was moderated by Jane Wang, Associate Professor of Marketing, CEIBS and Director, CEIBS-Jing’an International Fashion Industry Research Center.

Presently, Chinese companies are facing intense pressure to transform and upgrade in order to make a stronger impression in the global arena. To do so, they need to shift their focus to innovation and entrepreneurship, instead of being merely low-value-added and efficiency-driven. As the rules of the game keep changing and the brand market is reconstructed, an array of intelligent technologies will play an increasingly instrumental role in brand marketing. Therefore, the timing cannot be better for this forum.

Dr. Snow Zhou, CEIBS Assistant President, and Zhou Haiying, Member of the Standing Committee of CPC Shanghai Jing’an District Committee and Deputy Mayor of Jing’an District, delivered welcome addresses. Dr. Zhou noted that in the context of new consumption and retail, the balance of power in China’s consumer market is tipping in favour of emerging brands that embrace digital technologies, including the internet, artificial intelligence, and blockchain. To ride the new wave of consumption, he said, both Chinese and overseas brands need to figure out how to capture consumer trends in the era of disruption.

Deputy Mayor Zhou also pointed out that the complicated and changing international political and economic landscape has added uncertainty to global economic development. He further emphasised that this forum is particularly significant in focusing on new trends for Chinese brands and the paths to corporate change and innovation.

Megatrends for the Chinese Market and the Paths to Corporate Change and Innovation

In his keynote speech, Dominique de Villepin, Distinguished Professor of CEIBS, Chairman of CEIBS International Advisory Board (IAB) and former Prime Minister of France, shared his insights on the megatrends and driving forces in the Chinese market and Chinese companies’ new paths to change and innovation.

In his speech, Prof. de Villepin argued that China’s economy has shifted from a low value-added, export-oriented model to a more dynamic one driven by innovation and domestic demand. Moreover, he said, this transformation is making China’s economy more stable and sustainable for the long run. At the same time, he noted, during this transformation, enterprises will face many opportunities and challenges.

He further noted that reform and opening-up, and globalisation are transforming corporate structure and decision-making. As such, Chinese enterprises not only need to lay out a new vision and new structures to effectively manage their subsidiaries abroad, but also need to develop in-house capacities to keep up with international trends. At the same time, China’s technological and cultural transition has opened up new territory for economic growth. For example, he said, some prominent high-tech companies have stood out, bringing people more convenience in terms of mobility, communication, and knowledge acquisition. Technological innovation is now driving social progress and improving people’s quality of life. In this context, he pointed out, Chinese consumers represent rising demands and expectations for companies.

Prof. de Villepin also said he believes it is time to build a new economy focused on high quality and mutual benefit, which, in turn, means supporting prestige brands and high-quality products. “As consumers used to take price as the major decision variable, companies could compete on low prices,” he said. “Nowadays, quality and service are crucial to building consumer trust.” He also recommended that Chinese companies continuously strengthen customer loyalty by forging long-term ties with customers so as to build enduring brands.

Market Restructuring and Value Connection

In his talk, Bruno Lannes, Partner of Bain & Company (Greater China), stated he believes that China’s consumer market is experiencing changes in four areas. First, a growing number of consumers choose to spend time at home rather than abroad; second, growth in the consumer market is driven by an expanding middle class with strong spending power; third, as one of the major customer groups, millennials have unique consumer behaviours and an inclination toward instant consumption, valuing product quality over price; and fourth, interactions between consumers and brands are no longer fulfilled through traditional channels, but through digital platforms. He pointed out that as consumers now place a premium on personalisation and customisation, companies should actively respond to their increasingly fragmented needs through consumer-centric models and provide them with better experiences and services.

Ms. Cai Hua (CEIBS EMBA2016), Co-Founder and CMO of Ymatou.com, said that millennials (born between 1984 and 2000), who have long been exposed to the internet, are more inclined to obtain information about luxury goods online and pay a premium for personalised products and services. In the era of consumption upgrade, enterprises are seeing plenty of business opportunities. Live-streaming e-commerce has redefined the relationship among consumers, commodities and scenarios, and strengthened consumers’ trust in products and brands, upending the traditional e-commerce experience. In this sense, the live-streaming e-commerce market holds a $100 billion USD worth of potential.

Clemens Pflanz, Founder and Chairman of MEISTERKREIS, a German luxury goods association, put forward three suggestions about Chinese companies’ brand transformation. First, that quality lays at the heart of a product. During the brand transformation, high-quality products not only ensure the stability of a brand, but also its sustainable development after the transformation. Second, in the digital age, brands need new partnerships that will give an impetus to innovation and transformation. Third, sustainable development should be given top priority in brand transformation and building. Chinese companies would need to gear product and technological innovation toward ever-changing consumer attitudes and behaviours so that their brands could withstand the test of the time and maintain their lustre.

Following the talks, Mr. Lannes, Ms. Cai Hua and Mr. Pflanz participated in a roundtable discussion moderated by Prof. Wang.

Corporate Transformation: Paths and Strategies

What opportunities will digital technology open up to companies? In his talk, Dr. Liu Yuliang (CEIBS EMBA1999), Chairman, China Association of Fragrance Flavour and Society of Cosmetic Science and Technology, cited the digital landscape of Chinese cosmetics companies as an example of how digital upgrading could deliver a boost to brand development. He noted that at the corporate level, the level of digitalisation is highly correlated with revenue growth and profitability. In addition, the impact of information technology on traditional companies is gradually going beyond communication channels to penetrate the supply chain and even the entire value chain. Companies should provide precise services for consumers through digitisation of supply chain based on the big data platform, he said, and boost brand development through digital integration of internal and external data for more efficient operations in terms of consumers, commodities and scenarios.

In her talk, Ms. Jessie Yang, Senior Vice President, InMobi Global and General Manager, InMobi Greater China, also cited the application of AI as an example of how technology can help companies with mobile marketing. She also explained how AI video advertising based on big data could cover all scenarios, including fragmented time. It could promptly capture changes in user scenarios to “find the right person” and “reach the right person” so as to ensure targeted advertising. Ms. Yang further emphasised that, in the era of mobile internet, companies must make good use of digital and algorithm technology to provide efficient solutions to brand marketing.

Cai Chongda, CEO of MAGMODE, shared his views about changes in brick-and-mortar businesses. He said he believes what has changed is all on the surface, while what has stayed unchanged is at the core. Brick-and-mortar businesses screen commodities by product attribute, frequency of product update, and suitability, with the advantage of trading physical space for customer experience. For example, shopping centres attract consumers with exquisite windows. The low frequency of product update, however, is an unavoidable soft spot for brick-and-mortar businesses. Nevertheless, Mr. Cai emphasised that brick-and-mortar businesses would probably see a new sales boom as long as they could provide commodities that catered to consumers’ demand for personalisation and diversification.

Finally, Liu Yuliang, Jessie Yang, Cai Chongda and Wang Xiaoyi, Director of Tmall Luxury Marketing Center, held a roundtable discussion moderated by Ms. Irene Tang (CEIBS EMBA2011), Founder & CEO, Fulishe and Secretary-General, CEIBS Fashion & Creativity Alumni Association.

Darren Yue
Leina Hsu and Michael Thede