Conjuring up luxury takes magic and time

To Shanghai for the third Annual Prestige Brands Conference where your humble columnist was one of the keynote speakers. The event was hosted by CEIBS, the region’s biggest and most renowned business school, and the guest list featured senior speakers from some of Europe’s more prestigious luxury brands. From Hermès to Hublot - the guest list was stellar.

But after each and every presentation the almost exclusively Chinese audience asked the same question. As polite as they were repetitive, they all wanted to know when China would launch its first successful luxury brand.

Despite a scale and speed of growth that most British marketers literally would not be able to comprehend - China’s ambition and enthusiasm still outstrips its economic performance. The Chinese don’t just want to be the biggest market for luxury brands, they want to dominate the sector with their own products too. Hence the recurring question and the anticipation of the room as they waited to find out the answer. When would China dominate fashion and leather goods, watches and jewellery, perfume and cosmetics?

And unfortunately the answer was not the one they wanted to hear. I would have loved to have told the audience that China was five or 10 or even 15 years away from success. But if you understand luxury brands - the actual answer is more complex and, ultimately, disappointing.

To work on luxury brand strategy is to become a historian. You have to understand a founder and their origins to understand a luxury brand’s DNA. And when you do that research you invariably uncover a pattern that seems to repeat almost perfectly each time. Luxury brands don’t start with prestige and premium - they begin with a founder who inevitably comes from the middle of society rather than the top. Madam Chanel was an orphan, Guccio Gucci a merchant’s son from Florence - founders are artisans not aristocrats.

Next you have to examine the categories where they launched their businesses. To our eyes today, a category like champagne or watches is an ancient and established one. But back when a young monk called Pierre Perignon was experimenting with the fermentation of the grapes from around his monastery, the name Champagne simply meant a region. Similarly, wristwatches are now deemed an essential possession but less than 150 years ago the skill shown by first Patek Phillipe and later Louis Cartier to transfer big, bulky clocks and chronographs onto the wrist was seen as incredibly ’hi-tech’.

To a visionary founder working in a new category we must next add a moment of creativity or sublime innovation. Luxury brands might now market themselves on heritage and image but back in their formative years most were propelled into existence by a single act of brilliant product innovation. For a young draper from Basingstoke called Thomas Burberry is was the creation of a new fabric called gabardine - a water-resistant yet breathable fabric. For a middle-aged entrepreneur called Louis Vuitton it was the addition of canvas to his trunks as a means to ensure they were totally waterproof and could be produced in flat, stackable units - as apposed to having rounded peaks to ward off the rain.

And then add the final magic ingredient: time. Decades must pass. The founder must die. The clients must die. And time must move on until after a requisite period - sometimes half a century, often longer - the brand eventually acquires a lustre of exclusivity and heritage. Despite being born in the crucible of innovation and modernity, time renders these brands established and precious. Where once they were radical, now they becomes classic.

And there you have it - the magic ingredients for a luxury brand. Take a brilliant mind, get them to launch an innovative new brand in a relatively new category and then simmer on a medium heat for a century or more. Given those ingredients you should instantly be able to work out what the world’s next luxury brand will be.

The next great luxury brand will not come in watches or wine or leather goods. These categories are too old and too established now to spawn any new truly magical luxury brands. The next luxury brand is likely to be Apple. It has the right founder, the right innovation and the right category. It just needs another 40 or 50 years to transform from a tech brand to a luxury brand.

And the ingredients also spell out the answer that I gave to my eager Chinese audience last week in Shanghai. China will only develop a true luxury brand when they stop focusing on the traditional categories of luxury - now closed to entrants - and look to new and unimagined categories. They must ignore the Old World approach of France and Italy who made luxury brands when Paris was the centre of the world and focus on China and Chinese approaches. And they must look out for an individual with an artisan flair and genius for creativity.

And then - and this is the hardest part if you are Chinese - you just have to wait about a century.

Mark Ritson is an associate professor of marketing, an award winning columnist, and a consultant to some of the world’s biggest brands