Coach Proves Its Strength in China by Sales Figure
Coach is a luxury American leather goods company that got its start manufacturing small leather goods. These days Coach is best known for its ladies handbags as well as items such as luggage, briefcase, wallets and other novelty accessories. This brand positions itself as the ‘luxury at people’s fingertips’. Its price is half of LV and Gucci, and in China Coach is proving its strength by its sales figures. After getting back the dealership in mainland China in 2009, its sales in China has continually increased, with 108 million USD in 2010, 185 million USD in 2011 and a prospective of 300 million USD in 2012 fiscal year. By October 2011, Coach has 57 stores in mainland China. After its Hong Kong listing, Coach announced it will continue to expand by 30 stores per year. China will become its third largest market after US and Japan by 2013.
The CEO of Coach China Jonathan Seliger logs on the famous ‘Chinese micro-blog’ weibo.com once in a while to see the news of Coach’s account although he does not understand Chinese. The four people team managing the weibo of Coach is put together by him. The account was created last September and now it has 250 thousand fans, which shows the attention Coach is getting now in China. The brand awareness of Coach in China is 16 percent, while it is 79 percent in US and 64 percent in Japan. This means there is big room for more market penetration in China.
Consumer Needs Lead to Change in Design
Coach pays a lot of attention to product localization and this is probably one of the reasons it is continuing its success in China market. The consumer-oriented designing idea is very different from many European luxury brands. Instead of quarterly launch, Coach launches its new designs by month. It also invests 5 million USD a year on consumer research in order to better capture consumers’ needs and preference. Take the women’s handbag as an example. In China, occupational women account for 90 percent of the female population. Thus, most of the handbag owners hope that beside the fashionable look, their handbags can have enough space to satisfy their work-related needs. Therefore, handbags big enough for an A4 sized magazine are very popular among Chinese female consumers. Wallets sold in China have fewer card pockets and more space for cash because Chinese people use less credit cards and prefer more pay by cash.