What is the first thing that you would do if you see a piece of clothing or accessory while shopping at a high-end branded store? My first reaction is always to marvel at it for 10 sec and then immediately pick it up, not to try it on though, but to see if I could afford it and also where it is made from.
A few years ago, I would be surprised to see high-end luxury goods being made in Asia. But now, it's a completely different story. For most of the things that I can afford as a student in those stores, majority of them are 'Made in China' or 'Made in Vietnam.' Even those slightly more expensive items are made in Asia.
It's not difficult to understand this phenomenon of companies moving their manufacturing plants to Asian countries, especially China. Companies in almost every industry have moved over to China because of the potential large market and also it's low cost advantage over other countries. The luxury brands currently operating in China are largely of European origin and span across various retail sectors such as fashion apparel and accessories, footwear, perfume and cosmetics, jewellery, automotive, and liquor. Louis Vuitton, Bally,Gucci and Ferragamo were among the first wave of high-end retailers to open outlets in China more than 10 years ago. And now, LV, Prada, Coach, Kenneth Cole, Armani Exchange and many more has manufacturing plants set up in China. Burberry is planning to do so too, albeit many opposing voices (I'm sure some of you might have heard about this, even Prince Charles had something to say - Read).
Being someone who is conscious about where those high-end goods are produced, I have some general concerns:
By using low-cost Chinese labor, luxury goods companies could lose the whiff of glamour that surrounds their brands and justifies their relatively high prices.
What sets luxury brands apart is that they command a premium over their counterparts because they have a unique set of characteristics including premium quality, craftsmanship, recognisability, exclusivity and reputation. Luxury brands not only convey a standard of excellence, but act as social signals to indicate access to the rare, exclusive and desirable.
In the past, Europe's luxury brands have all created the image that their products are superior because of their European craftsmanship and materials. Relocation to low cost manufacturing countries such as China could be risky since these luxury brands will be losing some of their allure, which contributes to their high prices and desirability.
Quoted from chief executive of Brioni Roman Style Italian fashion house, Umberto Angelonithe: " When you start changing the ‘made in’ label, you create an expectation among consumers of lower prices, because everybody perceives costs in such countries to be 90 per cent lower."
A few years ago, I would be surprised to see high-end luxury goods being made in Asia. But now, it's a completely different story. For most of the things that I can afford as a student in those stores, majority of them are 'Made in China' or 'Made in Vietnam.' Even those slightly more expensive items are made in Asia.
It's not difficult to understand this phenomenon of companies moving their manufacturing plants to Asian countries, especially China. Companies in almost every industry have moved over to China because of the potential large market and also it's low cost advantage over other countries. The luxury brands currently operating in China are largely of European origin and span across various retail sectors such as fashion apparel and accessories, footwear, perfume and cosmetics, jewellery, automotive, and liquor. Louis Vuitton, Bally,Gucci and Ferragamo were among the first wave of high-end retailers to open outlets in China more than 10 years ago. And now, LV, Prada, Coach, Kenneth Cole, Armani Exchange and many more has manufacturing plants set up in China. Burberry is planning to do so too, albeit many opposing voices (I'm sure some of you might have heard about this, even Prince Charles had something to say - Read).
Being someone who is conscious about where those high-end goods are produced, I have some general concerns:
By using low-cost Chinese labor, luxury goods companies could lose the whiff of glamour that surrounds their brands and justifies their relatively high prices.
What sets luxury brands apart is that they command a premium over their counterparts because they have a unique set of characteristics including premium quality, craftsmanship, recognisability, exclusivity and reputation. Luxury brands not only convey a standard of excellence, but act as social signals to indicate access to the rare, exclusive and desirable.
In the past, Europe's luxury brands have all created the image that their products are superior because of their European craftsmanship and materials. Relocation to low cost manufacturing countries such as China could be risky since these luxury brands will be losing some of their allure, which contributes to their high prices and desirability.
Quoted from chief executive of Brioni Roman Style Italian fashion house, Umberto Angelonithe: " When you start changing the ‘made in’ label, you create an expectation among consumers of lower prices, because everybody perceives costs in such countries to be 90 per cent lower."
Moreover, some retailers believe that Chinese factories lack the craftsmanship and experience to make luxury goods. Chinese labor would have to learn skills that were passed down from generations to generations in order to produce the same level of quality European products.
Many of these high-end luxury brands used to source for quality craftsmanship, emphasizing the importance to their brand. By moving manufacturing to a low cost country, it contradicts with their original company objectives and missions.
