Swarovski’s Strategy in China Tests the Luxury Market – by 2023, the crystal brand has achieved double-digit turnover growth in China and growth worldwide. How is Swarovski faring in the current luxury situation?
Swarovski’s Strategy in China Tests the Luxury Market
swarovskijewelry – On the morning of the Vienna Opera Festival, Swarovski CEO Alexis Nasard held court at the Hotel Sacher Suite. As a sponsor of an important event in the Austrian social calendar, where debutantes traditionally introduce themselves to high society, Swarovski has been designing tiaras for debutantes for almost 70 years.
The partnership is based on “classic luxury, namely history, origin, omairfare, craftsmanship, creativity, impeccable quality; giving credibility to the brand,” Nasard said. “Then this must be balanced with a plain modernity, always on the edge of time, which is a current and important part of the cultural landscape. The structure of these two components makes the Swarovski brand strong.
Both are key to the strategy of the LuxIgnite brand, which Nasard founded when he joined the Austrian crystal brand in mid-2022 as its first non-family CEO. The company has been a family business since 1895, founded by Daniel Swarvoski. What would this two-pronged approach look like in the new luxury arena?
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New atmosphere from Swavosk
If the Vienna Opera Ball was all about roots and tradition, Swarovski’s latest look (under LuxIgnite) was really about having a good time. This included an unexpected collaboration with Kim Kardashian’s Skims label. It’s a far cry from the duty-free finds, teen jewelery and last-minute crystal figurine collections of the past, while these parts of the business are still important, the brand’s various lines have been “surgically segmented”.
But more importantly, major stores around the world have been redesigned in sweet candy colors of pink, blue, green and yellow – based on the WonderLux and WonderColor retail concepts.
It’s perfect for the playful, sometimes edgy and often oversized fashion that is key to Swarovski creative director Giovanna Engelbert’s new vision following her appointment in 2020. A high-end fashion insider who worked as an editor for Vogue Magazine. and W Italia, presenting a new approach to what Nasard calls Swarovski’s new, contemporary “playful luxury.”
“We are very proud of him. Giovanna and I agreed on what kind of brand we wanted to be, Nasard said. “What artistic concept do we want to follow and how do we want to be different. How bold do we want to be? How bold do we want to be?”
Brand warmth, performance and consumer response
How do consumers react? In 2022, the brand’s revenue grew 10% annually to 1.83 billion euros ($1.97 billion). While we’ll have to wait until mid-March for the brand to release its full 2023 earnings, Nasard provided some hints.
The brand’s sales will grow significantly in 2023, it said: “Comparable sales increased by 10%, the largest figure in the luxury industry. The importance of our brand is growing in key markets. The desirability of our brand is growing in all markets.”
Nasard reports that his profits have grown rapidly
And the other good news is that this brand continues to get younger and attract younger customers, that the younger generation loves this brand,” Nasard said.
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The Story of China
As an early entrant, China is still Swarovski’s largest market, but its growth is not the fastest. But China shows steady growth in key parameters and especially in brand equity.
“We ended the year with double-digit growth in China,” Nasard told Jing Daily. “Traffic in stores is growing double digits, which means interest in the brand has revived. We have now increased 70% of our store network and the upgraded stores have also increased productivity by double digits…but we don’t expect explosive growth in China. We are looking for continued growth.”
Swarovski’s fastest growing market in 2023 will be East Central Europe, and the Middle East is also doing well. And perhaps because of Engelbert’s (née Battaglia) influence in her native Italy, “this market will grow the fastest in terms of comparable sales,” Nasard said.
Last September, the highly successful “Masters of Light: From Vienna to Shanghai” exhibition introduced the craftsmanship, history, Swarovski archives and collaborations to Chinese audiences. , as well as highlights from the exhibition and the new collection. The brand received social media attention during the week due to the event, which reignited public interest.
But concerns about China’s economic background remain. Consumer confidence is weakening and macroeconomic developments such as the collapse of Evergrande are not helping matters. The fashion, beauty and luxury goods industries are in limbo. Given the many challenges it faces, how will Swarovski, the affordable luxury brand, or pop luxury as Nasard prefers to call it, perform in China?